[Congressional Record Volume 168, Number 133 (Saturday, August 6, 2022)]
[Senate]
[Pages S4210-S4212]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                    INFLATION REDUCTION ACT OF 2022

  Mr. CARDIN. Madam President, Senate Democrats have stepped up and 
passed legislation that will make it easier for American families to 
afford health insurance coverage and prescription drugs and lower 
energy costs and boost domestic job creation in the growing clean 
energy sector. We have done so while reducing the deficit and without 
raising taxes on families and small businesses. The Inflation Reduction 
Act--IRA--tackles climate change, makes the Tax Code fairer, and 
invests in long-overdue environmental justice programs. This is an 
historic bill, and polling indicates that large majorities of Americans 
support its major provisions.
  While a simple majority of Senators can pass a budget reconciliation 
bill, there was nothing to prevent our Republican colleagues from 
joining us in supporting this measure to lower essential costs for 
American families and enhance our economic and national security. These 
are policies that all Senators and all Members of Congress should 
embrace, and this legislation contains many bipartisan policies. 
Reconciliation does not have to be a partisan process. Just in the past 
year, the Senate passed the Infrastructure Investment and Jobs Act--
IIJA--the CHIPS + Science semiconductor manufacturing bill, the 
Honoring Our PACT Act, and Treaty Document No. 117-3, which contains 
Protocols to the North Atlantic Treaty of 1949 on the Accession of the 
Republic of Finland and the Kingdom of Sweden, with strong bipartisan 
majorities. I regret that our Republican colleagues did not join us 
today in passing the IRA.
  As for me, if asked to choose between the status quo or lowering 
health coverage costs for Maryland families and having large companies 
pay a minimum, fair share of taxes, there is no contest. I will choose 
Maryland families every day. I find it incomprehensible that anyone--
other than perhaps some billionaires--thinks it is acceptable that 
teachers, nurses, and mechanics and most small businesses often pay a 
greater percentage of their income in Federal taxes than the 
ultrawealthy or a company that makes billions of dollars in profits. 
The bill we passed today changes that calculation and holds the richest 
Americans and companies that make over a billion dollars accountable 
for paying their fair share of taxes, like everyone else in this 
country.
  This past Wednesday, Timothy F. Geithner, Jacob J. Lew, Henry M. 
Paulson Jr., Robert E. Rubin and Lawrence H. Summers issued the 
following statement:

       As former Treasury Secretaries of both Democratic and 
     Republican Administrations, we support the Inflation 
     Reduction Act, which is financed by prudent tax policy that 
     will collect more from top-earners and large corporations. 
     Taxes due or paid will not increase for any family making 
     less than $400,000/year. And the extra taxes levied on 
     corporations do not reflect increases in the corporate tax 
     rate, but rather the reclaiming of revenue lost to tax 
     avoidance and provisions benefitting the most affluent. The 
     selective presentation by some of the distributional effects 
     of this bill neglects benefits to middle-class families from 
     reducing deficits, from bringing down prescription drug 
     prices, and from more affordable energy. This legislation 
     will help increase American competitiveness, address our 
     climate crisis, lower costs for families, and fight 
     inflation--and should be passed immediately by Congress.

  The original top-line estimates from the Congressional Budget 
Office--CBO--and the Joint Committee on Taxation--JCT--were that the 
bill would raise $725 billion in revenue, invest $433 billion, and 
apply the balance--nearly $300 billion--to deficit reduction. These 
numbers will change some with the final score, but they illustrate the 
magnitude of what this bill will accomplish. The IRA will help to build 
a better America for all Americans.
  Let's start with health care. The bill we passed today will lower 
prescription drug prices and make healthcare more affordable for 
millions of Americans. Finally, the Secretary of Health and Human 
Services will have the authority to negotiate lower drug prices for the 
Medicare Program, benefitting both millions of seniors on fixed incomes 
and taxpayers. In the private sector, no plan sponsor or manager would 
ever accept responsibility without the ability to decide how to 
negotiate. Medicare negotiation will ensure that patients with Medicare 
get the best deal possible on high-priced drugs, saving Medicare 
approximately $100 billion.
  The IRA will further lower drug costs for seniors by capping out-of-
pocket costs for part D prescriptions at $2,000 each year, requiring 
drug manufacturers to pay penalties if they raise their prices faster 
than inflation, and delaying of the Trump administration's drug rebate 
rule. Although these provisions alone will lower beneficiary costs, the 
IRA also lowers costs through a redesign of the Medicare Part D 
formula, expansion of the low-income subsidy--LIS--in part D, and 
Federal coverage for vaccines.
  The IRA also invests $64 billion to extend ACA healthcare premium 
subsidies through 2025. These subsidies, first provided through the 
American Rescue Plan, have guaranteed millions of Americans access to 
affordable health insurance. Access to affordable health insurance 
saves lives and reduces costs because people get the care they need and 
they get it sooner. As Benjamin Franklin said, ``An ounce of prevention 
is worth a pound of cure.'' The IRA will save Maryland families with 
median income about $2,200 annually.
  The IRA raises several hundred billion dollars by making the Tax Code 
fairer through three major provisions. The first provides up to $80 
billion to the Internal Revenue Service--IRS--to modernize its computer 
systems, some of which are 60 years old, and rebuild its workforce to 
ensure greater tax compliance. CBO estimates that investing $80 billion 
in tax enforcement and compliance will generate $203 billion in 
additional revenue over the next 10 years.
  Since 2010, the IRS budget has been cut by roughly 20 percent, and 
the budget earmarked for enforcement has dropped by 24 percent. Audit 
rates for the largest corporations and the ultrawealthy have fallen 
dramatically, by 54 and 71 percent, respectively. We now have the 
perverse situation where the poorest American families are audited at 
about the same rate as the top 1 percent richest taxpayers, even though 
that 1 percent is responsible for 28 percent the ``tax gap,'' the 
difference between taxes owed and collected. According to recent 
polling, nearly three-quarters of Americans believe the IRS should 
conduct more tax audits of large corporations and millionaires.
  The IRA provides 10-year funding for the IRS as follows: $3.2 billion 
for taxpayer services; $45.6 billion for enforcement; $25.3 billion for 
operations support; and $4.8 billion for business systems 
modernization.
  These appropriated funds are to remain available until September 30, 
2031, and no use of the funds is intended to increase taxes on any 
taxpayer with taxable income below $400,000.
  The bill also makes it easier for the IRS to establish a free, direct 
e-file tax return system. The IRS currently outsources its free e-file 
program to private, for-profit tax preparers. Not surprisingly, only 3 
percent of taxpayers--of 70 percent eligible--use the existing free e-
file option.
  The second major provision establishes a minimum corporate income tax 
of 15 percent of book income on fewer than 200 of the Nation's largest 
corporations that currently pay less than the statutory corporate tax 
rate, which is 21 percent. The corporate alternative minimum tax--
CAMT--proposal would impose the 15 percent minimum tax on adjusted 
financial statement--``book''--income for corporations with profits in 
excess of $1 billion. Corporations would generally be eligible to claim 
net operating losses and tax credits against the AMT and would be 
eligible to claim a tax credit against the regular corporate tax for 
AMT paid in prior years, to the extent

[[Page S4211]]

the regular tax liability in any year exceeds 15 percent of the 
corporation's adjusted financial statement income.
  In 2020, 50 of the biggest corporations paid $0 in Federal corporate 
income tax, despite recording substantial profits. Some of these 
companies effectively had a negative Federal income tax because they 
received more in credits and rebates than they paid in taxes. The AMT 
makes the existing corporate tax structure fairer, especially for 
smaller businesses that often pay their taxes at higher rates than the 
largest corporations. Consider that many small businesses pay taxes 
through the individual tax code, where the highest tax rate is as much 
as 37 percent. Setting a baseline of taxes to be paid by the largest 
corporations gives small businesses a better chance to compete and 
succeed.
  The third provision is a 1 percent excise tax on stock buybacks. 
Corporations can choose to distribute profits either by issuing 
dividends or buying back shares of stock, which inflates stock prices. 
Stock buybacks are taxed at a lower rate than dividends and create 
profit gaming opportunities for companies, which have been abused over 
time. By levying a small 1 percent tax on these buyback transactions, 
it improves tax efficiency and raises revenue that will significantly 
contribute to deficit reduction.
  The IRA's tax provisions will increase compliance and close the tax 
gap, which costs the U.S. $1 trillion per year in unpaid taxes, 
according to the IRS. That is important for the revenue they raise. It 
is also important that millions of hard-working Americans who play by 
the rules and pay their taxes believe that the system is fair and that 
the ultrawealthy and large corporations aren't dodging their financial 
responsibilities.
  We need to address climate change by rapidly reducing our dependence 
on fossil fuels and cutting our greenhouse gas emissions. The IRA does 
that. It will cut our emissions by 40 percent or more by 2030 and put 
us on track to meet 70 percent of our Paris agreement obligations. It 
contains a Methane Emissions Reduction Program to reduce leaks from the 
production and distribution of oil and natural gas.
  The IRA contains roughly $370 billion in clean energy, energy 
security, and climate change investments that will lower Americans' 
electricity bills and prices at the pump and create as many as 9 
million good-paying jobs here in America in the clean energy sector 
over the next decade.
  I am pleased the IRA includes a provision I have championed, a 
production tax credit for our existing fleet of nuclear reactors. They 
are an essential source of baseload power and provide 20 percent of the 
Nation's electricity and over 50 percent of our carbon-free 
electricity.
  According to the non-partisan Resources for the Future, all told, the 
IRA will drive down retail costs of electricity by 5.2-6.7 percent over 
the next decade, saving electricity consumers $209-$278 billion. The 
average household will experience approximately $170-$220 in annual 
savings from smaller electricity bills and reductions in the costs of 
goods and services over the next decade. The clean energy investments 
will help to insulate ratepayers from volatility in natural gas prices, 
with electricity rates projected to decrease even under a high natural 
gas price scenario. More importantly, the IRA will bolster our economic 
and national security by strengthening our grid and reducing reliance 
on foreign energy supplies.
  The legislation also includes a historic expansion of a tax program I 
have led, the section 179D energy efficient commercial buildings 
deduction, which provides a tax deduction for energy efficient building 
investments. Energy efficiency is good business and good policy. This 
legislation will expand section 179D, which was made permanent in 2020 
under my leadership, to increase the deduction amount, improve its 
administration, allow more nonprofits to use the deduction, and expand 
its use to building retrofits.
  In addition to the important steps the IRA takes to advance clean 
energy and reduce greenhouse gas emissions, the bill delivers major 
Federal investments to make our communities healthier, safer, and more 
resilient in the face of increasing impacts of climate change. It 
provides Federal assistance for monitoring environmental quality, 
mitigating the harmful impacts of air pollution and excessive heat, and 
enhancing walkability in our neighborhoods. It does this through $3 
billion for Neighborhood Access and Equity Grants and $3 billion for 
Environmental and Climate Justice Block Grants. By targeting resources 
to disadvantaged or underserved communities, the bill advances equity 
in our infrastructure planning and investments.
  Climate change is happening now. We need to address its impacts on 
the ground. The IRA invests $2.6 billion for the conservation, 
restoration, and protection of coastal and marine habitats and 
resources, including fisheries, to enable coastal communities to 
prepare for extreme storms and other changing climate conditions, as 
well as $250 million to rebuild and restore units of the National 
Wildlife Refuge System and State wildlife management areas.
  The bill supports America's farmers and rural communities, with 
around $20 billion in funds for climate-smart agricultural practices 
through existing farm bill conservation programs, including the 
regional conservation partnership program--RCPP--and $1 billion for the 
Natural Resources Conservation Service, to provide technical assistance 
on conservation to producers. Many sustainable practices such as 
expanding cover crops and riparian buffers that mitigate greenhouse gas 
emissions and help farmers adapt to climate change also cost-
effectively reduce pollution to the Chesapeake Bay.
  The IRA makes investments to accelerate clean energy deployment, help 
achieve our climate goals, and create millions of jobs over the next 
decade. These investments include an expanded tax credit to support 
domestic manufacturing of clean energy technologies, including solar 
panels, wind turbines, and batteries; and tax credits that will make 
battery and fuel cell electric vehicles--EVs--more affordable for 
millions of families. The bill provides over $9 billion for Federal 
procurement of American-made clean technologies, including $3 billion 
for the U.S. Postal Service to purchase zero-emission vehicles, helping 
to create a stable market for clean, Made in America products.
  Researchers Robert Pollin, Chirag Lala, and Shouvik Chakraborty at 
the University of Massachusetts-Amherst's Political Economy Research 
Institute estimate that the IRA's more than 100 climate, environmental, 
and energy provisions will generate an average of about 912,000 jobs 
each year over the next decade through combined annual public and 
private investments of $98 billion.
  The IRA tax credits and other provisions won't just help create jobs; 
they will help create jobs that pay prevailing wages. The middle class 
has experienced wage stagnation for half a century. Income inequality 
has grown. The IRA will help to rebuild the middle class. Unions from 
the Communication Workers of America and the United Auto Workers to the 
National Treasury Employees Union and the International Federation of 
Professional and Technical Engineers all support the IRA because it 
promotes union jobs and apprenticeships and because it will lower 
healthcare costs.
  In May, the Treasury Department estimated that the budget deficit 
this year will decline by $1.5 trillion. As President Biden noted at 
the time, ``The bottom line is that the deficit went up every year 
under my predecessor before the pandemic and during the pandemic. And 
it's gone down both years since I've been here. Period.'' The IRA is 
fiscally responsible and will help reduce our budget deficits.
  Deficits remain too high, of course, but one of the best ways to 
address them is by getting unemployed Americans back to work. The July 
jobs report released on Friday put the unemployment rate at 3.5 
percent, matching the lowest it has been in 50 years. The U.S. economy 
added 528,000 jobs in July, more than twice the number economists 
anticipated. As Myles Udland, Senior Markets Editor of Yahoo! Finance, 
stated,

       This staggering increase in employment completes a 
     milestone for the U.S. economy: Pre-pandemic employment is 
     now fully restored.
       In February 2020, the last month before the COVID-19 
     pandemic tipped the U.S. economy into recession, there were 
     152.504 million people employed in the U.S.
       As of July 2022, 152.536 million people in the U.S. were 
     working.

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       And despite the labor market contraction during the 
     pandemic being the sharpest in modern history, the bounce 
     back marks the second-fastest job market recovery since 1981.
       In a little over two years, we've seen job losses that 
     topped 20 million at one point be fully erased.
       This recovery stands in stark contrast to the malaise we 
     saw in the labor market following the financial crisis, when 
     it took the better part of a decade for pre-crisis employment 
     levels to be restored.

  Inflation is also too high, but its root causes are COVID-19 
pandemic-related supply chain disruptions and Vladimir Putin's war on 
Ukraine. The IRA tackles these disruptions by promoting domestic 
manufacturing and supply chains and reducing our reliance on foreign 
energy. On August 2, 2022, over 120 prominent economists wrote a letter 
to Senate and House leadership stating that the IRA ``addresses some of 
the country's biggest challenges at a significant scale. And because it 
is deficit-reducing, it does so while putting downward pressure on 
inflation.''
  There is much to celebrate in this bill, but there are many 
priorities that we were not able to add. This ``to do'' list includes 
reinstating the expanded child tax credit and making child care 
accessible and affordable. My priority list includes legislation I have 
long championed to expand dental coverage to Medicare beneficiaries, as 
well as to Medicaid beneficiaries, along with expansions to home and 
community-based and maternal health services. Congress also needs to 
address housing supply and economic development priorities, including 
the Neighborhood Homes Investment Act, the Low-Income Housing Tax 
Credit, the New Markets Tax Credit, and the Historic Tax Credit. While 
the IRA will help create good-paying union jobs, we need to do more to 
protect and enhance workers' rights to form and join unions and engage 
in collective bargaining. And I will continue working to fund water 
infrastructure programs the IIJA created to address urgent 
affordability and resilience issues.
  While that seems like a long list, we must not let the perfect be the 
enemy of the good, and the IRA is so much better than good. It is 
transformational legislation, and I am proud to support it. I want to 
commend Majority Leader Schumer and so many of my colleagues who have 
worked diligently both in the spotlight and behind the scenes to bring 
us to this point. I also want to acknowledge committee and personal 
staff; CBO and JCT staff; Senate Parliamentarian Elizabeth MacDonough 
and her crew; leadership, floor, and cloakroom staff; the Senate 
legislative counsels; and others. You toil anonymously, but I hope you 
know how important you are. The Senate could not function without you. 
You are among our Nation's finest public servants, and you are making a 
critical difference in the lives of all Americans.
  The American essayist Charles Dudley Warner famously said, 
``Everybody complains about the weather, but nobody does anything about 
it''--a quote commonly misattributed to his friend Mark Twain. Passing 
a reconciliation bill is like that. We all complain about the process, 
especially the so-called vote-a-rama, which is grueling and grinding 
and befuddling to just about everyone, but we don't fix it. In fact, it 
seems to get worse each time, not better. I know I would prefer not to 
go through the process again, but the Inflation Reduction Act and the 
American Rescue Plan before it have been worth it.
  Dahlia Rockowitz, Washington director of Dayenu: A Jewish Call to 
Climate Action, noted that the Senate consideration of the Inflation 
Reduction Act began on the Shabbat and Tisha B'Av, a Jewish day of 
collective mourning for historic destructions. But as she pointed out, 
`` . . . according to Jewish tradition, this day of despair is also the 
day that new hope and the potential of a rebuilt, reimagined, redeemed 
world is born. These investments in clean energy and transportation can 
help us emerge from climate-fueled disasters to a more hopeful, clean 
energy future for generations to come.''

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