President Joe Biden on Tuesday signed Democrats’ sweeping climate, health care and tax reform bill into law, the culmination of months of negotiations over which parts of the president’s domestic agenda would make it into a final package.
"Now I'm going to take an action that I've been looking forward to doing for 18 months," the president said just before he signed the bill.
The Inflation Reduction Act — which received its final Congressional stamp of approval in the House on Friday — includes a historic near $375 billion for climate change, would lower prescription drug costs, extend pandemic health care subsidies and impose a new minimum corporate tax. The $740 billion package also includes $300 billion to pay down the federal deficit.
"The American people won, and the special interests lost," Biden said. "It's about showing the American people that democracy still works in America, notwithstanding all the talk of its demise. Not just for the privileged few, but for all of us."
The IRA is an evolved and scaled-down version of Biden’s former $3.5 trillion vision for his agenda, known as the Build Back Better framework, which also included programs such as universal pre-school and free community college.
But the bill that made it to the finish line still includes the biggest investment in fighting climate change in history, a landmark effort to lower drug prices that Democrats long fought for, and taxes on the wealthiest businesses, all of which Biden has pushed for since the campaign trail.
"This bill is the biggest step forward on climate ever -- ever," Biden said. "It's going to allow us to boldly take additional steps toward meeting all of my climate goals, the ones we set out when we ran."
The IRA’s passage was the culmination of a month of wins for the president that also included a drop in gas prices and the passage of bipartisan bills to boost the domestic chip industry and expand veterans’ health care.
The package came together after West Virginia Sen. Joe Manchin quietly returned to the negotiating table with Majority Leader Chuck Schumer. Manchin insisted on a deal that would focus on bringing costs down instead of adding to the country’s record inflation.
Manchin attended the bill signing ceremony on Tuesday and entered the room to a small round of applause. On stage, Schumer and Biden thanked Manchin personally, and the president gave him the pen he used to sign the IRA.
The West Virginia senator said outside the White House on Tuesday that he and Biden have always had a "personal relationship" and that they worked closely together on Build Back Better negotiations last year.
Manchin ultimately gave Biden credit for giving senators space work out the final details of the IRA. The moderate lawmaker said he wanted to keep the final talks quiet because he didn't think they could ultimately reach an agreement.
"I wasn't sure," Manchin said.
The packaged passed in the Senate with all 50 Democrats — and no Republican — supporting it.
Biden had traveled back to Washington from a family vacation in South Carolina to sign the bill before he was scheduled to leave once again for the Delaware leg of his time away.
Analysis finds the bill could do little to really impact inflation in the short term, even if it lowers some Americans’ costs in the coming years, such as for prescriptions or energy prices.
Republicans have said the multibillion-dollar package would instead contribute to higher prices.
“Democrats, more than any other majority in history, are addicted to spending other people’s money, regardless of what we as a country can afford,” Minority Leader Kevin McCarthy, R-Calif., said on the House floor last week.
One of the biggest revenue-raisers in the bill is a new 15% minimum tax on corporations that earn more than $1 billion in annual profits.
It's a way to clamp down on some 200 U.S. companies that avoid paying the standard 21% corporate tax rate, including some that end up paying no taxes at all.
The new corporate minimum tax would kick in after the 2022 tax year and raise more than $258 billion over the decade.
There will also be a new 1% excise tax imposed on stock buybacks, raising some $74 billion over the decade.