President Joe Biden signed into law the Inflation Reduction Act last week amid a 40 year high of raising prices across the country. The law, estimated at $750 billion, lowers prescription drug costs, taxes, health care costs, and energy costs as well as takes action towards fending off the climate crisis.
“We are in a season of substance. This administration began amid a dark time in America,” said Biden at the signing of the bill, “A once-in-a-century pandemic, devastating joblessness, clear and present threats to democracy and the rule of law, doubts about America’s future itself. And yet we did not waver, we did not flinch, and we have not given in. Instead we’ve delivered results for the American people.”
National polling from NPR and the Robert Wood Johnson Foundation and the Harvard T.H. Chan School of Public Health indicates that Black, Latino and Native American adults are the hardest hit by the latest balloon in prices for things like groceries, education, healthcare, gas, and rent, compared to white counterparts.
Jared Bernstein, with the White House Council of Economic Advisers, said that the impact of the COVID-19 pandemic, “the collision of strong demand and strained supply,” and the impact of the Russian war on Ukraine have all contributed to elevated inflation. He described a domino effect of inflation pressures that only recently let up this June. Bernstein said he’s in favor of raising the federal minimum wage so that workers can “maintain their buying power.”
“I don’t think it’s rocket science to conclude that people who have lower incomes or less savings are more exposed to high inflation and that’s one reason price pressures are President Biden’s absolute top domestic priority,” said Bernstein.
Senate Majority Leader Chuck Schumer, at the signing of the bill, said getting the reduction law passed was nothing short of historic. “We persisted and persisted and persisted and never gave up,” said Schumer.
“The Inflation Reduction Act will lower the skyrocketing price of life-saving prescription drugs, cut energy costs and make healthcare more affordable and accessible. This legislation represents a bold step toward tackling climate change and saving our planet, consistent with Democrats’ promise to address the climate crisis with the fierce urgency of now,” said U.S. Rep Hakeem Jeffries in a statement.
Jeffries criticized House Republicans for not voting for the bill.
Here’s what’s in the law and how it will benefit Black and brown Americans.
High priced prescription drugs in the U.S. contribute to racial and ethnic health inequities, said the White House. Among adults 65 and older, Black Medicare beneficiaries were roughly 1.5 times as likely as White beneficiaries to have trouble affording medications, and about 2 times as likely to not fill needed prescriptions due to cost, said the White House.
The law works to put caps on out-of-pocket costs in Medicare for seniors and allows Medicare to negotiate the price of high-cost drugs to negate the effects of inflation. It also continues the Affordable Care Act premium tax credits, which should give uninsured Black Americans access to free or low-cost health insurance.
Next, the law takes on climate change and clean energy. It strives to make more affordable energy efficient electric appliances, creates tax incentives for efficient heating and cooling, and provides more clean energy jobs in solar. The law has a Protect Public Health clause, which recognizes that climate change disproportionately impacts low-income communities and communities of color. Because of that it funds programs to reduce air pollution among other things in disadvantaged communities.
The American Sustainable Business Network (ASBN), an organization committed to a sustainable economy, applauded the Biden administration for the law because of its climate provisions.
“This is a historic moment for our nation and a bold leap forward for business and the economy,” said David Levine, president and co-founder of ASBN in a statement. “The ASBN thanks President Biden and the U.S. Congress for addressing climate with the urgency it deserves. As we prioritize public-private partnerships, ASBN looks forward to working with leaders at all levels of government to bring the promise of the Inflation Reduction Act to fruition.”
Bernstein added that clean energy is pivotal to addressing climate costs within Black communities because many can’t afford to insulate themselves from discrimination and pollution.
Lastly, the reduction law has a 15% minimum tax on large corporations and a 1% tax on stock buybacks, and it reserves about $200 $to %300 billion towards paying down the U.S.’ budget deficit.
Ariama C. Long is a Report for America corps member and writes about culture and politics in New York City for The Amsterdam News. Your donation to match our RFA grant helps keep her writing stories like this one; please consider making a tax-deductible gift of any amount today by clicking here: bit.ly/amnews1