President Joe Biden’s $5 trillion Build Back Better plan has been dead for some time. However, significant pieces of the bill could now be saved after U.S. Sen. Joe Manchin, a conservative Democrat from West Virginia who has been a source of difficulty for the White House, made a stunning u-turn.He has put his full support behind a massively slimmed-down version of the Build Back Better plan that will address inflation, tax, healthcare, and climate change.
He had previously said he would not support any spending on climate change.
“For too long, the reconciliation debate in Washington has been defined by how it can help advance Democrats’ political agenda called Build Back Better,” said the West Virginia Democrat in a statement. “Build Back Better is dead; instead, we have the opportunity to make our country stronger by bringing Americans together.”
Most of the money will come through a 15% corporate tax, closing IRS loopholes that benefit wealthy investors, IRS enforcement, and prescription drug reform.
While Sen. Manchin has put his full support behind the bill and hopes to push for a Senate vote this week before an August recess, there are serious questions about whether fellow U.S. Sen. Kyrsten Sinema from Arizona will also support the bill. Even though she helped craft some of the healthcare provisions in the bill, it’s believed she opposes closing an investment loophole that allows private equity, real estate, and hedge fund managers to pay far less tax. The Inflation Reduction Act would close that loophole and raise $14 billion over 10 years.
The Senate is split 50-50, with Democrat Vice-President Kamala Harris holding the tie-break vote. However, Senate Democrats have been not been at full strength in about a month after an uptick in Covid cases this summer,
But what’s in the climate change part of the bill?
The bill aims to reduce carbon emissions by 40% by 2030. How? The act will offer new tax credits for Americans buying electric vehicles. The tax credit is $4,500 for used electric cars and $7,500 for a new vehicle.
Depending on the state, most electric vehicles will charge using energy from coal and gas plants. But do not worry.
The plan also sets aside $60 billion to help manufacture clean energy and provides tax credits to cut the cost of heat pumps, water heaters, and rooftop solar power.
What does it mean for power bills?
The bill will also help people save money on energy bills by offering $9 billion in rebates and tax credits for people who make their homes more energy efficient. Low-income consumers will be prioritized in the bill. A further $1 billion will make affordable housing more energy efficient.
Billions will also help incentivize states and utilities to transition quickly to clean energy.
Does the bill address climate justice?
A crucial part of the bill will be its focus on environmental justice. Around $60 billion will create clean investment in disadvantaged communities nationwide. That will include $3 billion in block grants to tackle the disproportionate environmental and public health harms related to pollution and climate change.
Another $3 billion will go to neighborhood access, providing affordable and clean transportation while reuniting communities separated by current infrastructures like highways and other projects. And billions will also be used to reduce air pollution at ports and buy clean heavy-duty municipal vehicles, like school and transit buses and garbage trucks.
And lastly, nearly $30 billion will make agriculture cleaner and more equitable.
But there’s more good news. The $300 billion leftover will help reduce the nation’s deficit, currently at $30 trillion.