Late on July 27, Sen. Joe Manchin and Senate Majority Leader Charles Schumer announced an agreement on the Inflation Reduction Act (IRA): a reconciliation package that implements prescription drug pricing reform, invests in Affordable Care Act health care subsidies, imposes a corporate minimum tax and improves tax enforcement, and—most relevant for this post—provides $369 billion to support energy production and reduce greenhouse gas emissions.
This package presents the opportunity for Congress to finish legislating President Biden’s Build Back Better agenda, completing the story detailed in our series The ABCs of the AJP. As we left the saga last summer, we noted that the effort to enact that agenda was Not Broken, Simply Unfinished. Today we are updating that series to detail the following energy related elements of the IRA:
- Ten year stability for expanded clean energy tax credits
- New funding for a National Green Bank through a Greenhouse Gas Reduction Fund
- The Creation of a Methane Emissions Reduction Program
- Empowerment of environmental justice
As President Biden noted yesterday, “Sometimes seem like nothing gets done in Washington . . . But the work of the government can be slow and frustrating and sometimes even infuriating. Then the hard work of hours and days and months from people who refuse to give up pays off. History is made. Lives are changed.” As of this writing, these sentiments may still be premature; one key Democrat—Senator Krysten Sinema from Arizona—has yet to signal her support for the IRA. Her endorsement will be necessary in an evenly divided Congress on what is expected to be a highly partisan vote.
Regardless, the coming days will prove decisive for the future of U.S. energy and climate policy and we will continue to update and supplement our coverage as the bill moves through the final stages of the legislative process.