Inflation Reduction Act Becomes Law

Key Takeaways:

• The Senate voted 51-50 on Aug. 7 to pass the Inflation Reduction Act.
• The legislation passed the House without changes and was signed by President Biden on Aug. 16.
• The legislation raises more than $700 billion from numerous sources, including from novel corporate taxes on adjusted book income and on stock repurchases, through Medicare prescription drug pricing reforms, and by strengthening the IRS with $80 billion in new funding.
• The legislation spends more than $400 billion on climate initiatives and healthcare.

The Senate passed tax, climate and healthcare legislation called the Inflation Reduction Act (IRA2022) along party lines, with Vice President Kamala Harris casting the tie-breaking vote. The House, which allows proxy voting, voted to approve IRA2022 along party lines on Aug. 12 without making any changes. President Joe Biden signed the bill on Aug. 16.