Updated August 12, 2022 at 5:42 PM ET
The House gave final congressional approval on Friday to a spending bill which would attempt to tackle climate change, the high cost of prescription drugs and lower the deficit by roughly $300 billion. It was passed without any Republican support and now goes to President Biden for his signature.
House Speaker Nancy Pelosi, D-Calif., called it a "glorious day," adding, "We sent to the president's desk a monumental bill that will be truly for the people."
Senate Democrats revived the bill, a year in the making, with a furious few final weeks of negotiations mainly between Sen. Majority Leader Chuck Schumer, D-N.Y., and Sen. Joe Manchin of West Virginia. Its final major hurdle was a marathon voting session last weekend in the Senate.
The legislation was passed through the budget reconciliation process, which meant that all 50 Democrats in the Senate and one tie-breaker vote from Vice President Harris were needed, since none of the 50 Republican senators voted for the bill. It also restricted the measures in the bill to those that directly change federal spending and revenue.
Democrats have argued the measure will tackle voters' main economic concern, naming it the Inflation Reduction Act. Republicans argue the new spending will aggravate inflation. The nonpartisan Congressional Budget Office says, though, the bill has a "negligible" effect on inflation in 2022 and into 2023.
House Minority Leader Kevin McCarthy, R-Calif., called the bill "tone deaf" ahead of Friday's floor vote. "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," McCarthy added.
Overall, the bill is a very scaled-down solution to what many Democrats, including President Biden, had asked for originally.
"This bill is far from perfect. It's a compromise. But it's often how progress is made," Biden said at the White House last month. "My message to Congress is this: This is the strongest bill you can pass."
After the House passed it on Friday, Biden said he will sign the "historic legislation" next week.
Here's a look at some of what did get included in the Democrats' bill, and what didn't.
You can see the entire 730-page bill here.
Tackling climate change
More than $300 billion will be invested in energy and climate reform, the largest federal clean energy investment in U.S. history.
The bill has support from many environmental and climate activists but is short of the $555 billion that Democrats had originally called for.
This portion of the bill takes on transportation and electricity generation, and it includes $60 billion for growing renewable energy infrastructure in manufacturing like solar panels and wind turbines.
It also includes several tax credits for individuals on things like electric vehicles and making homes more energy efficient.
The bill will, according to Democrats, lower greenhouse gas emissions by 40%, based on 2005 levels, by the end of the decade, which is short of the 50% Biden had originally aimed for.
"It puts us within a close enough distance that further executive action, state and local government efforts and private sector leadership could plausibly get us across the finish line by 2030," said Jesse Jenkins from Princeton University, who leads the REPEAT Project analyzing the impact of government climate actions.
Lowering the cost of prescription drugs
On health reforms, the bill takes on making prescription drugs more affordable — but there are some limits.
The bill includes a historic measure that allows the federal health secretary to negotiate the prices of certain expensive drugs each year for Medicare.
But this won't impact every prescription drug or every patient, and it won't take effect quickly. The negotiations will take effect for 10 drugs covered by Medicare in 2026, increasing to 20 drugs in 2029.
The portion of the bill that tried to cap at $35 per month the price of insulin — a drug that is incredibly expensive in the U.S. compared to other countries — was ruled out of order by the Senate parliamentarian, who ruled the cap could apply on Medicare, a government program, but not on private insurance. So, Democrats split the measure between Medicare and private insurance — but Republicans ultimately blocked the measure for private insurance.
The parliamentarian also ruled that a measure that was in the bill to force drug companies to offer rebates if prescription prices outpaced inflation was not totally in line with the rules for budget reconciliation; she said that it could apply to Medicare patients but not those with private insurers.
The bill puts a cap of $2,000 on out-of-pocket prescription drug costs for people on Medicare, effective in 2025.
There's also a three-year extension on healthcare subsidies in the Affordable Care Act originally passed in a pandemic relief bill last year, estimated by the government to have kept premiums at $10 per month or lower for the vast majority of people covered through the federal health insurance exchange.
That helps millions of Americans avoid spikes in their health care costs.
Tax reform
The legislation creates a 15% minimum tax for corporations making $1 billion or more in income, bringing in more than $300 billion in revenue.
A portion that got cut, though, is one that narrowed the carried interest tax loophole. Arizona Kyrsten Sinema agreed to sign onto the bill if this measure, which would have changed the way private equity income is taxed, was cut. Democrats said it would have brought in $14 billion in revenue.
Instead, a 1% excise tax on stock buybacks was introduced, and it could bring in roughly five times as much revenue as the carried interest measure. However, it wouldn't take effect until next year, raising predictions of a rush of buybacks by some companies before 2023 rolls around.
A major portion of the bill that isn't included, due to opposition from West Virginia Sen. Joe Manchin, is extending the Child Tax Credit. Manchin expressed last year that the cost to extend the credit was too high, but progressives, including Vermont Sen. Bernie Sanders, continued to push for its inclusion in the bill.
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