Biden Pushes For Passage Of Inflation Bill: What You Need To Know

President Joe Biden addressed the nation on Thursday, calling for support from the Senate to pass the Inflation Reduction Act of 2022, which Biden calls the most important investment to be made in the United States' energy security, and said it will reduce inflationary pressures on the economy. Here are the details.

Medicare And Health Care Changes: “First,” Biden said, “the bill finally on a promise that Washington has made for decades — we’re giving Medicare the power to negotiate for lower prescription drug prices.”

Starting in 2026, Medicare would be able to negotiate the cost of10 prescription pharmaceuticals, a number that would rise over time.

Additionally, it sets a $2,000 annual cap on out-of-pocket expenses for seniors who rely on Medicare Part D.

The legislation also imposes penalties on drug manufacturers that raise prices more quickly than inflation.

“Second, the bill locks in place lower healthcare premiums for the next three years for families that get coverage under the Affordable Care Act,” Biden said.

The expected budget for extending the Affordable Care Act (Obama Care) through 2025 is $64 billion. Americans who purchase insurance via the program would pay no more for coverage than 8.5% of their income.

The eligibility requirements for the extension remain the same.

Energy Security And Climate Change: “Third, it will invest $369 billion to secure energy future — bringing down families’ energy bills by hundreds of dollars,” he said.

The goal of the $369 billion budgeted for energy security and combating climate change is to cut carbon emissions by 40% by 2030.

Part of that is achieved with new tax credits and rebates for electric vehicles, efficient appliances, heat pumps and rooftop panels for homes that are solar-powered.

Depending on their annual income, Americans would be eligible for a $4,500 tax credit to purchase secondhand electric vehicles if the bill is signed into law. If it's an entirely new EV, the credit rises to $7,500.

Biden also mentioned the bill will give tax credits to American companies that focus on manufacturing, clean energy construction projects, solar projects, wind projects, clean hydrogen projects and carbon capture projects.

“Let me be clear,” the president said, “this bill will be the most important legislation in history to tackle the climate crisis.”

The Market Reaction: Stocks reacted positively to Biden’s remarks, as the S&P 500 climbed 0.47% after Biden's speech began. 

Photo via Shutterstock.