NewsPolitics

Actions

Democrats laud coming impact Inflation Reduction Act will have on Colorado

Bill contains large investments in drought, climate resiliency, health care
U.S. Capitol
Posted at 6:10 PM, Aug 09, 2022
and last updated 2022-08-10 08:57:55-04

DENVER — President Joe Biden and Democrats, including Colorado Sens. Michael Bennet and John Hickenlooper, are touting a string of wins in Congress that they are hoping will offer a boost in the midterm election.

Along with passing a gun reform law, another to increase American semiconductor chip manufacturing, one to support the NATO membership of Finland and Sweden, a bill to offer more help to veterans who were exposed to toxins like Agent Orange or burn pits, on Sunday the U.S. Senate also passed the Inflation Reduction Act on a party-line vote. No Republicans voted in the measure's favor and Vice President Kamala Harris broke the 50-50 tie to move the bill forward to the House.

The bill contains $430 billion in investments and addresses everything from prescription medications to climate change to taxes.

On the health care side of things, the biggest change the bill provides is allowing Medicare to negotiate the prices of 10 high-cost drugs starting in 2026. It would then gradually increase to allow Medicare to negotiate on 20 high-cost drugs by 2029.

The bill also calls for a cap on insulin of $35 for Medicare recipients and for a cap on out-of -pocket prescription drug expenses at $2,000 for those same recipients starting in 2025.

Colorado already has a $100 a month cap for insulin that applies to all residents starting this year.

For those using the Affordable Care Act for insurance, premium assistance will also be extended for three years.

On the climate side of things, the bill calls for a tax credit of up to $7,500 for moderate income families who purchase a new electric vehicle and a $4,000 tax credit for those who buy a used electric vehicle.

However, one stipulation for the tax credits is that part of the vehicle’s batteries must be manufactured in the U.S. and some of the battery’s minerals must be mined in the U.S. as well.

“I think it's really important to understand that this is going to be a phasing. It's not all going to happen at once but it's going to be really good for our manufacturing sector,” Sen. Bennet said.

Sen. Hickenlooper, meanwhile, said he believes the made-and-mined-in-America stipulations will help incentivize companies to invest in U.S. companies instead of outsourcing the manufacturing.

Tax credits are also being extended for rooftop solar and low energy heat pumps on homes.

For businesses, the tax credits would help with energy efficiency in commercial buildings, clean energy production and development, manufacturing of metals in the U.S. and more.

It also helps put the U.S. on a path to reduce greenhouse gas emissions by 2030.

“We will get 80% of the way towards President Biden's commitment of reducing climate emissions by 50% by 2030, and that is something people didn't think we could possibly get to,” said U.S. Sen. John Hickenlooper.

Another portion of the bill calls for $4 billion to be spent on drought resiliency in the west and along the Colorado River Basin.

To pay for these programs, the bill calls for a minimum of a 15% tax on corporations making $1 billion or more. Bennet pointed out during a Tuesday press conference that school teachers pay more than a 15% tax.

“Frankly, there's more I wish we would have done I wish that we had reversed the Trump tax giveaways for the richest people. I wish that we had extended my tax cuts,” he said.

Bennet and two other Western Democratic senators – Catherine Cortez Masto of Nevada and Mark Kelly of Arizona – announced last week they had negotiated including $4 billion in Bureau of Reclamation funding to help fight the Western megadrought in the bill.

The Bureau of Reclamation said earlier this summer that the seven states in the Colorado River Basin must cut back on the use of 2 million to 4 million acre-feet of water next year so Lake Powell and Lake Mead can continue producing electricity and the Lower Basin States can have water, and the funding aims to help aid those cuts and the decisions governments and landowners will have to make to make the cuts.

The Lower Basin States are expected to carry the largest burden in cutting water use, but the Upper Basin States including Colorado.

“The Western United States is experiencing an unprecedented drought, and it is essential that we have the resources we need to support our states’ efforts to combat climate change, conserve water resources, and protect the Colorado River Basin,” the three said in a joint statement last Friday ahead of the Senate vote. “This funding in the Inflation Reduction Act will serve as an important resources for Nevada, Arizona, and Colorado, and the work we’ve done to include it will help secure the West’s water future.”

The bill’s drought response section includes the following:

  • $4 billion through September 2026 for grants, contracts, or financial assistance for drought mitigation – with priority given to the Colorado River Basin – for reductions in water diversion or use; conservation projects that reduce the use or demand for water supplies in the Colorado’s river’s Lower and Upper basins; ecosystem restoration projects in areas affected by drought.
  • $550 million through September 2031 for grants, contracts, or financial assistance agreements for disadvantaged communities to plan, design, or construct water projects for households in areas that do not have reliable access to domestic water supplies.
  • $25 million through September 2031 for the design, study, and implementation of projects to cover water conveyance facilities with solar panels or other solar projects that increase water efficiency.

The bill also includes $5 billion that would go toward protecting communities from wildfire through forest conservation and funding for firefighters, another $2 billion for National Labs to speed up climate and energy research, and $250 million for wildlife recovery and habitat restoration affected by climate change.

The measure is expected to reduce the deficit by at least $300 billion because it is expected to raise nearly $740 billion in revenue, according to Democratic sponsors.

The measure also calls for around $80 million to be dedicated to the IRS to hire 87,000 more agents to conduct more audits on high-income Americans.

“The vast majority of that money is going to come from people that make well over $400,000 a year, and they don't pay taxes. They're finding every little loophole, everything they could even pretend as a legitimate loophole,” Hickenlooper said.

Colorado Republicans and Bennet's November opponent, however, are lambasting the bill as more government spending during a time when the country is facing high inflation.

“We don't need to be spending more money and then collecting it from working Americans here in Colorado. So it's a tax,” said Joe O’Dea, the Republican candidate challenging Bennet for his seat in November.

O’Dea says the bill will equate to a tax on gas and manufacturing that will only hurt working class families in the end. He also questioned whether the funding for the IRS would actually hurt middle-income residents, saying he believes the majority of the money will come from people earning less than $100,000 a year.

“I don't know why they're calling it an inflation Reduction Act. Bernie Sanders has already come out and said it doesn't affect inflation at all. It's a tax,” O’Dea said.

Bennet, however, rejected the claims that this is a tax, saying it’s an abject lie from the Republicans.

For now, Democrats are touting the massive bill as a success, admitting there’s more work to be done but hoping it will help them in the November election.

The House of Representatives is expected to vote on the measure on Friday.

Denver7's Blair Miller contributed to this report.