President Biden signed the Inflation Reduction Act into law in August 2022. It represents the United States’ largest-ever investment in clean energy and climate measures. The new law aims to lower costs for Americans while also addressing the climate crisis through a variety of tax incentives and subsidies. It provides $370 billion to boost clean energy technologies like solar, wind, and battery power with the goal of making the United States the global leader in manufacturing these products. The Act offers targeted tax credits to drive investment in renewable energy projects located in low-income and disadvantaged communities disproportionately impacted by pollution.

Also, in order for the policy to ensure a just transition of fairness and equity, the law requires clean energy developers to meet strong labor standards by paying prevailing wages and utilizing registered apprenticeship programs. This is estimated to support over 1 million well-paying union jobs in the energy sector over the next decade. The Act also extends and expands tax credits for consumers to make home energy upgrades like insulation, efficient appliances, and rooftop solar more affordable. It continues the tax credit that has helped grow the electric vehicle (EV) market and is expected to increase EV adoption.

On the healthcare front, the Inflation Reduction Act authorizes Medicare to negotiate prescription medication prices for the first time, which the Congressional Budget Office projects would save the federal government $288 billion over the next 10 years. The law also extends enhanced Affordable Care Act subsidies through 2025. It proposes to lower the government budget by levying a 15 percent minimum tax on major firms and a 1 percent tax on stock buybacks.