Inflation Reduction Act

The Inflation Reduction Act (IRA) was a signature piece of legislation promoted by the Biden administration and passed by the Democratic majority in Congress in August 2022.  The legislation included three major components: $369 billion in investments aimed at reducing greenhouse gas emissions and fighting climate change; $64 billion to extend expanded health care subsidies under the Affordable Care Act; and $739 billion in various deficit-reduction measures, which primarily included lowering prescription drug costs for the Medicare program, establishing a 15 percent corporate minimum tax, and increasing IRS tax enforcement. The agreement that led to passage of the IRA also included a commitment to permitting reform aimed at increasing domestic energy and transmission projects.

The final version of the Inflation Revenue Act followed over a year of failed negotiations over the Biden administration’s efforts to pass a multi-trillion dollar spending packages known as the Build Back Better plan. The IRA passed the Senate 51-50 under budget reconciliation provisions, which meant that it was exempt from the normal 60-vote requirement needed to avoid a filibuster, and passed the House of Representatives 220-207, in both cases on straight party-line votes.