Biden Signs Inflation Reduction Act Authorizing Billions in Funds for US Economic Change

WASHINGTON (Sputnik) - US President Joe Biden on Tuesday signed the Inflation Reduction Act of 2022 into law, authorizing hundreds of billions of dollars in spending on areas that include tax enforcement and health care in an effort to address the federal budget deficit over time.

"The Inflation Reduction Act does so many things that for so many years so many of us have fought to make happen," Biden said during remarks at the White House prior to signing the bill. The legislation was passed by both, the US House and Senate along partisan lines.

The measure provides approximately $369 billion in funding for green technology and energy security, as well as tens of billion for health care. The bill also enables the US government to negotiate certain prescription drug prices in Medicare and Medicaid and commits $80 billion toward Internal Revenue Service (IRS) tax enforcement.

Estimates by the Congressional Budget Office predict that the bill will reduce the deficit by approximately $300 billion over the next decade, with the United States increasing savings and revenue by about $790 billion while spending roughly $485 billion. The $80 billion IRS expenditure is expected to net $124 billion of that revenue over 10 years.

Republican lawmakers opposed the bill, citing concerns about strengthening the IRS and the bill’s potential economic impacts. The IRS’s increased enforcement and operations budget, including hiring new agents, could be used to increase audits of ordinary American families and small businesses, the lawmakers contended.

The bill also adds a 15% corporate minimum tax and closes the carried interest loophole. The Biden administration has vowed that the legislation will not violate the president’s campaign promise not to raise federal taxes on any person making less than $400,000 a year.

However, the Joint Committee on Taxation found that the bill would slightly raise overall tax rates for some people making under $400,000, although the White House has dismissed the panel’s assessment as incomplete.

The bill could also potentially lead to higher energy prices amid already historic inflation, according to the American Exploration and Production Council. The legislation’s energy security efforts include provisions to incentivize a transition towards green energy, as well as to impose a 16.4% Superfund tax on crude oil received at US facilities.

Senate Majority Leader Chuck Schumer during remarks prior to the bill’s signing praised Biden’s leadership as essential in getting the legislation through Congress.