Senate passes Inflation Reduction Act with largest ever investment in climate rescue infrastructure

Colorado’s two Democratic senators, conservation groups and other lawmakers on Sunday celebrated U.S. Senate passage of the Inflation Reduction Act with the largest investment ever in renewable energy technology, $300 billion in deficit reduction and a slew of health care reforms.

The Democrat-controlled House returns from recess on Friday to pass the bill — likely on pure party lines — and send it to President Joe Biden for his signature. Here’s a press release from Colorado U.S. Sen. Michael Bennet:

“The Inflation Reduction Act is a victory for the American people over special interests and the status quo. It will lower costs for hardworking Colorado families at the pharmacy, at the gas pump, and on their monthly energy bills and insurance premiums. On top of that, it will start to build a fairer tax code, put us on the path to energy independence, and help us lead the fight against climate change. 

“While Senate Republicans tried to sink this bill with cynical amendments, we overcame their obstruction to pass this landmark legislation to lower costs. 

“Today, I’m more hopeful than ever that we can leave Colorado and our country better for the next generation and begin to build an economy that grows for everyone.”

BACKGROUND:

The Inflation Reduction Act (IRA) will make the largest investment to confront climate change in history, reduce our deficit, lower costs and help fight inflation for hard-working Coloradans. The IRA will help lower health care and prescription drug costs for Coloradans by allowing Medicare to negotiate drug prices and extending the American Rescue Plan health insurance premium support for three years for over 100,000 Coloradans. Bennet proposed these reforms in his Medicare-X public option bill. The bill will also cap prescription drug costs for seniors at $2,000 per year and prevent pharmaceutical companies from egregiously hiking drug prices for seniors. 

As a member of the Senate Finance Committee, Bennet has championed the long-term extension and expansion of the clean energy tax credits in the IRA, including ensuring that entities like rural electric cooperatives, public power, and Tribes have full access to those credits.  The IRA also includes incentives for domestic clean energy manufacturing for wind, solar, and batteries for electric vehicles and stationary energy storage, based on Bennet’s proposals, as well as an array of his priorities to support rural communities in the transition to clean energy, cut methane emissions, and invest in innovative technologies like carbon capture. Bennet also helped write the IRA’s 15% Corporate Minimum Tax on the country’s 200 richest corporations, which will raise nearly half of the revenue to pay for the bill. 

As the Chair of the Senate Agriculture Committee’s Subcommittee on Conservation, Climate, Forestry and Natural Resources and Chair of the Finance Committee’s Subcommittee on Energy, Natural Resources, and Infrastructure, Bennet has pushed to make major investments in our forests and agricultural economy to help confront climate change. On Friday, Bennet secured $4 billion to address drought in the West and in the Colorado River Basin. The IRA will invest more than $20 billion in working lands conservation measures and $5 billion to restore the health of our forests to prevent wildfires, modeled after his Outdoor Restoration Partnership Act. At Bennet’s urging, the bipartisan infrastructure law also made a major investment in our forests – for a combined historic $10 billion investment in our forests.

Earlier this week, Bennet spoke on the Senate floor in support of the Inflation Reduction Act.

Here’s a press release from Colorado U.S. Sen. John Hickenlooper:

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.

Here’s a press release from the Center for Western Priorities:

DENVER—The Senate today passed the Inflation Reduction Act, a landmark bill that will do more to address the climate crisis than any previous bill in American history. The bill also contains a top-to-bottom overhaul of the century-old oil and gas leasing system on America’s public lands. Unfortunately, the Senate parliamentarian ruled that one portion of those reforms, which would have increased the minimum bonds that drillers must post before drilling on public lands, did not meet the requirements for passage under the Senate’s reconciliation rules, and was removed from the final bill.

The Center for Western Priorities released the following statement from Executive Director Jennifer Rokala:

“This bill is a tremendous downpayment on America’s renewable energy future. Our thanks go out to all of the senators who worked tirelessly to keep it on track and defeat amendments that would have weakened the much-needed reforms to America’s oil and gas leasing system, including Senators Bennet, Hickenlooper, Heinrich, and Rosen.

“This final bill is not perfect. It is troubling that it locks in another decade of onshore and offshore oil leases. When it becomes law, the Interior Department will need to move quickly to implement the law in a way that provides maximum protection to threatened landscapes and species across the West. The upcoming companion bill to reform energy permitting represents both an opportunity and a risk, and we’re hopeful the Senate can craft a law that speeds renewable energy development while ensuring our natural resources are preserved for future generations.

“In all, we cannot let the bad outweigh the good that this bill represents. We look forward to quick passage in the House and President Biden’s signature.”

Here’s a press release from the Southwest Energy Efficiency Project:

[DENVER, CO] – Elise Jones, Executive Director of the Southwest Energy Efficiency Project, issued the following statement celebrating the United States Senate’s passage of the Inflation Reduction Act: 

“On behalf of the people of Colorado, New Mexico, Arizona, Nevada, Utah and Wyoming, I sincerely thank the U.S. Senate for voting to advance the Inflation Reduction Act today.  

This bill contains the largest investments in energy efficiency in American history. Adopting it will deliver meaningful benefits to all of us, including:  

• Making our homes and workplaces more comfortable and efficient;  
• Cutting energy and transportation costs;  
• Reducing our dependence on foreign oil and increasing energy security;  

• Creating good-paying jobs; 
• Advancing equity, including in both rural and urban communities; and 
• Cutting pollution, protecting both our health and our climate. 

This bill can and will unlock substantial energy bill savings. For example, think-tank Rewiring America estimates that a household could save $1,800 per year on energy through programs in this bill that will help families:  

• Switch to an electric vehicle;  

• Install a modern electric heat pump to heat and cool their homes and provide hot water; and  
• Put solar panels on their roof.  

We urge the House to quickly move to final passage, and hope that President Biden will immediately sign the bill. We look forward to working with state and local leaders across our region to implement the bill and maximize its benefits.”

Here’s a press release from U.S. Rep. Joe Neguse, who represents Vail and the majority of Eagle County, as well as Boulder and Fort Collins:

Today, Congressman Joe Neguse applauded the Senate’s passage of the new Fiscal Year 2022 Budget Reconciliation package, the Inflation Reduction Act of 2022. The bill makes historic investments in American clean energy production and manufacturing and will advance several key provisions for Colorado that Rep. Neguse has championed over the past year, including incentivizing research, expanding access to healthcare, bolstering wildfire response, improving wildlife recovery, and combatting the climate crisis. 

“The Senate’s passage of the Inflation Reduction Act is truly historic. The bill will help address rising health care costs, boost American manufacturing, and would be the most significant climate legislation enacted in our country‘s history. I’m proud the legislation includes a significant $5 billion investment in our forests and wildfire mitigation and a $2 billion investment in our nation’s scientific labs, both of which I’ve fought to secure. I look forward to supporting this bill in the House of Representatives, and continue to be hopeful for its swift enactment.” said Congressman Neguse. 

More specifically, the bill invests approximately $300 billion in Deficit Reduction and $369 billion in Energy Security and Climate Change programs over the next ten years, lowers prescription drug costs by allowing Medicare to negotiate prescription drug prices, lowers health care premiums for millions of Americans, and makes a historic investment in domestic energy production and manufacturing with the goal of reducing emissions by roughly 40 percent by 2030. 

The Inflation Reduction Act of 2022 makes significant investments in Neguse-Led Programs, specifically those of importance to the people of Colorado, including: 

• $5 Billion to protect communities from wildfires while combating the climate crisis and supporting the workforce through climate-smart forestry.
  • Investing in forest health projects on both public and private lands and equipping firefighters and rural communities to be more resilient to wildfire.
  • Investing in climate-smart forestry to boost carbon sequestration. 
  • Supporting healthy, fire-resilient forests, forest conservation, and urban tree planting.
    
• $2 Billion for National Labs to accelerate breakthrough energy and climate research.
  
• $250 Million for wildlife recovery and to restore units of the National Wildlife Refuge System and state wildlife management areas. 
  • Restoring habitats to mitigate the impacts of climate-induced weather events and increasing resiliency to benefit wildlife and surrounding communities.

The bill lowers health care costs by:

• Caping Medicare patients’ out-of-pocket costs at $2,000 per year, with the option to break that amount into affordable monthly payments. 
  
• Stabilizing Part D premiums for seniors in Medicare –so insurers and manufacturers can’t pass their new financial burdens on to seniors. 
  
• Providing free vaccines for seniors. Finally making all vaccines free in Medicare for seniors – the only population for which vaccines were not already free.

• Extending provisions from the American Rescue Plan to keep health coverage accessible and affordable for three additional years – protecting affordable insurance for approximately 13 million Americans.