5 Things The Cut Inflation Act Will Do For Rhode Island Residents
RHODE ISLAND — The Democratic spending bill that would provide tax credits for clean-energy household products and electric vehicles, savings on prescription drugs and health insurance, and other benefits for consumers to residents of Rhode Island, has been embraced by both chambers and is now heading to the office of President Joe Biden.
The 755-page Inflation Reduction Act, as the spending bill is called, passed the Senate in a party vote last week. Both ways. Sheldon Whitehouse and Jack Reed voted in favor of the bill.
The House also passed the bill in a vote of 220 to 207, which was strictly along the partial lines. Both members of Congress from Rhode Island voted in favor of the bill.
“Although we have the lowest unemployment rate in 50 years, too many Americans and Rhode Islanders are struggling to get by because of the rising cost of goods,” the rep said. David Cicilline in a press release. “The Cut Inflation Act will help us reduce costs for American workers while tackling the climate crisis head-on. Importantly, this legislation will also reduce prescription drug costs, a expense that has plagued families for far too long.”
The climate, tax and health care bill provides $433 billion in new spending that Democrats say is more than offset by $739 billion in revenue, specifically:
- $313 billion from a 15% minimum corporate tax
- $288 billion from prescription drug pricing reform
- $124 billion from IRS tax enforcement reform
- $14 billion from closing the carried interest loophole
House Speaker Nancy Pelosi praised the “landmark legislation” for “lowering the cost of the kitchen table, lowering the cost of health care for Americans, creating millions of well-paying jobs and tackling the climate crisis”.
Republicans called the measure “reckless spending” that adds “fuel to the fire of inflation that is burning in Americans’ paychecks.”
Inflation cooled in July as gasoline prices fell, but Americans continued to pay more for groceries, rent and other items, according to the government’s index report. consumer prices released on Wednesday.
Here are five things Rhode Island residents should know about the bill:
Time to hook up?
Middle and working class consumers – those earning $150,000 or less per year (or $300,000 for co-filers) will be eligible for tax credits of up to $7,500 for new vehicles “clean” qualified made in North America. Consumers earning $75,000 or $150,000 for joint filers can also qualify for a tax credit of up to $4,000 for the purchase of clean used vehicles.
Among those eligible for the maximum credit are vehicles manufactured by General Motors and Tesla; the less efficient the vehicle, the lower the tax credit, NBC reported.
Tax credits for a “clean” life
The legislation increases credits from 10% to 30% for installing Energy Star products in homes and non-commercial properties. According to the Senate Finance Committee, these products include “solar electricity, solar water heating, fuel cells, small wind power and geothermal heat pumps.”
The amount of savings Americans would see depends on their investments in improving the energy efficiency of their homes. According to a summary by the Bipartisan Policy Center, they could claim $1,200 in tax credits per year, including $600 for energy-efficient windows and $500 for energy-efficient doors, but could claim up to $2,000 if their upgrades level included biomass stoves and heat pumps.
Reduced drug costs for older Americans
Starting in 2025, drug spending for Medicare beneficiaries would be capped at $2,000. There’s no cap now, and the average Medicare beneficiary spent $5,460 on out-of-pocket expenses in 2016, according to research by the nonpartisan Kaiser Family Foundation.
Older Americans would also receive recommended vaccines free of charge, including those for COVID-19 and shingles.
The legislation also caps monthly insulin outlays at $35 per month for Medicare beneficiaries. Senate Democrats tried to extend the cap to all Americans, but Republicans argued that the Senate’s strict budget rules prohibit that, NBC News reported.
No shock Affordable Care Act sticker
The measure extends funding for the American Rescue Act until the end of 2025. Without it, the 13 million Americans who receive their health insurance through the Affordable Care Act market would have faced a steep hike bonuses this fall.
Additional financial assistance is available for people who are already eligible for subsidized health plans in the ACA Marketplace. The legislation also extends ACA grants to middle-class earners who previously could not afford health insurance, according to the Kaiser Family Foundation.
More neighborhood investments
The legislation would channel $60 billion in grants and tax credits to improve air quality monitoring, improve transportation and invest in clean energy in poor and vulnerable communities.
It also specifically targets neighborhoods close to industrial sites. For example, it provides $1 billion in grants to improve the energy efficiency of affordable housing.
Environmental justice advocates say the measure falls short of addressing needs, but addressing some of the most pressing issues.
