Inflation Reduction Act invests $373 billion in climate & clean energy transition
Bill also lowers prescription drug costs, ACA premiums for millions
Washington, D.C. – U.S. Senator John Hickenlooper today voted to pass the Inflation Reduction Act, Senate Democrats’ bill to address climate change, lower health care costs, and pay down the deficit by making wealthy corporations pay their fair share and taxing stock buybacks.
“The Great Transition is here! This bill is the most comprehensive clean energy initiative we’ve ever seen,” said Hickenlooper. “We’ll reduce carbon emissions 40 percent by the end of the decade. We’ll save Colorado families hundreds of dollars on their energy bills and health care costs. All while reducing the deficit. America will help lead the planet into a clean energy economy.”
The New York Times heralded the Inflation Reduction Act as the “most ambitious climate action undertaken by U.S.” The New York Times, Axios, POLITICO, and others reported Democrats and climate advocates credited Hickenlooper with helping the deal coalesce by encouraging Senators Joe Manchin and Chuck Schumer to keep trying despite many giving up on any prospect of an ambitious climate bill this year. CNN also reported on Hickenlooper’s efforts to break the logjam and win Senator Kyrsten Sinema’s support for the bill.
The Inflation Reduction Act is estimated to save families hundreds on their electricity bills while capping prescription drug costs for seniors, extending a 52 percent reduction in health insurance premiums for many Coloradans, and reducing the deficit to fight inflation.
Highlights of the bill include:
CLEAN ENERGY & CLIMATE
- $373 billion in climate change investments, including more than $100 billion in tax credits for clean energy generation and storage, and $10 billion to support rural electric co-ops purchasing renewables. The generation credits do not expire until the U.S. reduces emissions 75 percent below 2022 levels.
- Over $10 billion for home efficiency and electrification upgrades including heat pumps and electric HVAC, rooftop solar, electric stoves, insulating homes for efficiency, and more. This includes 50 percent consumer rebates based on a bill Hickenlooper co-sponsors.
- Electric vehicle tax credits to help make purchasing new and used EVs more affordable. The credit provides $7,500 for new cars and $4,000 for used.
- Up to $20 billion in loans to build new clean vehicle manufacturing facilities across the country and $2 billion in grants to retool existing facilities to build zero-emissions vehicles. Hickenlooper also supported $3 billion to electrify USPS delivery vehicles.
- Billions for manufacturing solar panels, wind turbines, batteries, and electric vehicles right here in the United States. The solar manufacturing PTC is based on a bill Hickenlooper co-sponsors.
- $2 billion for Department of Energy laboratory infrastructure, including for the National Renewable Energy Laboratory (NREL) in Golden.
- The first-ever methane fee which will charge emitters $1,500 per ton of leaked methane from oil and gas operations. Methane is significantly more harmful than CO2 to our climate and local air quality. Hickenlooper led Colorado in developing the strongest methane regulations in the country when he was Governor.
- Almost $20 billion for climate-smart agricultural tools and practices such as conservation easements, emissions reduction programs, soil improvement, supply chain sustainability efforts, and a range of carbon sequestration strategies.
- $4 billion for the Bureau of Reclamation to address Western drought in the Colorado River Basin and other comparably drought-afflicted basins, plus $12.5 million to mitigate drought impacts on Tribes.
- Broad reforms to the federal oil and gas leasing system, including increased rental and royalty rates and Hickenlooper’s COMPETES Act, which ends the speculative practice of non-competitive leasing on public lands.
- Billions for environmental justice, including $20 billion for zero-emissions technologies and technical assistance in disadvantaged communities and $3 billion in grants to address pollution and other environmental harms.
- Investments in burgeoning clean technologies like direct air capture, clean hydrogen, and efforts to lower emissions from construction, manufacturing, and other sectors.
- $500 million for public lands conservation, resiliency, and ecosystem restoration projects by the National Park Service (NPS) and Bureau of Land Management, $500 million for hiring NPS employees, $575 million for Bureau of Reclamation water projects, and $246 million for the Fish and Wildlife Service for recovery plans and climate resilience.
LOWERING HEALTH CARE COSTS
- Allows Medicare to negotiate the most expensive prescription drugs directly with pharmaceutical companies and helps keep Medicare drug prices from rising faster than inflation. Because the federal government is the largest purchaser of drugs, this has the potential to impact drug prices for those on private insurance plans as well.
- Caps out-of-pocket costs for seniors with Medicare at $2,000 a year. Caps out-of-pocket costs for insulin via Medicare at $35 per month.
- Extends Affordable Care Act saving for 13 million Americans who purchase insurance plans on the exchange. This helps three out of four Coloradans with plans through Connect for Health Colorado save an average of 52 percent on their monthly premiums.
MAKING BIG CORPORATIONS PAY THEIR FAIR SHARE
- The bill includes a 15 percent minimum tax for approximately 200 of the largest corporations with more than $1 billion in profits. In 2020, 55 of the largest corporations paid $0 in federal tax, receiving over $3 billion back from the government in refunds. If teachers and firefighters pay taxes, so should multi-billion dollar corporations.
- A 1 percent excise tax on stock buybacks, which corporations use to inflate their stock price and pay CEOs. Hickenlooper proposed this idea.
- Funding for the Internal Revenue Service to go after millionaires and billionaires who are illegally evading taxes.
- $300 billion to pay down the federal deficit and fight inflation.