THE INFLATION REDUCTION ACT OF 2022: A SUMMARY OF THE SCHUMER-MANCHIN AGREEMENT
A package reflecting ongoing negotiations by Senate Majority Leader Charles Schumer and Senator Joe Manchin was announced last Wednesday, July 27th, that would be the single largest investment in climate action in U.S. history.
The agreement would provide $369 billion for climate and energy programs while offsetting the cost (and reducing the deficit) by raising taxes on corporations and high earners and through IRS enforcement. If passed by the Senate, the Act would still require a vote by the House before it could be signed by President Biden. Senate Democrats are reviewing the bill. If 50 votes are assured, the Inflation Reduction Act of 2022 would be considered in a budget reconciliation process and require a simple majority for passage.
Climate provisions in the proposed Act include:
Tax credits for zero carbon power that extend for 10 years to companies that build new sources of emission free electricity and for the manufacture of those technologies
Tax credits and grants to states and utilities for reducing carbon dioxide emissions
Tax incentives for individual purchase of new and used for electric vehicles
$1B for electric school buses and public buses.
$9B to help lower energy costs for individuals with rebates for buying/retrofitting homes with energy efficient and electric appliances
Tax credits for purchase of heat pumps, rooftop solar, HVAC/water heating systems
$60B for communities with disproportionate burden of pollution, for no emission technologies, and to mitigate effects of highway placement, bus depots, and construction project
Some climate justice advocates have raised concerns about the proposed Act, including:
Expansion of tax credits for carbon capture and sequestration—a questionable technology that is often used to increase oil extraction
A commitment to expand fossil fuel infrastructure by resuming leasing for fossil fuel drilling in the Gulf of Mexico and in Alaska
A pledge to resolve permitting obstacles currently blocking natural gas pipelines
Other provisions of note include a fee of $900 per metric ton on leaking methane starting in 2024, increasing to $1500 per metric ton in 2026. Agriculture is also addressed with a $20B to support programs to cut emissions from cows, other livestock, and agricultural crops. The proposed Act also includes measures to lower prescription drug costs, extend health insurance subsidies, and address several longstanding tax loopholes.
Save the Date: Inflation Reduction Act Night of Action
Climate Reality’s Our Climate Moment National Campaign will be hosting a Night of Action around the Inflation Reduction Act on Tuesday August 8th at 4pm PST. As registration details become available, they will be shared on the Bay Area Chapter Reality Hub group. Stay tuned, and please tune in!