Month: August 2022

The Senate’s approval of the Inflation Reduction Act (IRA) on Sunday marks the first time the body has ever passed any significant measures to address climate change.

The IRA contains $369 billion in spending over 10 years to subsidize the deployment of clean energy and electric vehicles, and it includes other measures to combat climate change, such as a fee on methane leaked in oil and gas drilling. Overall, it is expected to help the US reach a 40% reduction in the greenhouse gas emissions that cause global warming from 2005 levels by 2030.

Although that falls short of President Biden’s goal of cutting those emissions by 50%, it nonetheless thrilled longtime leaders on climate change, who just 10 days earlier were apoplectic when it appeared the Senate would pass no climate change legislation at all.

“It’s been a long time coming, but the Senate has finally advanced transformative climate legislation,” former Vice President Al Gore, who kick-started the climate movement with his 2006 documentary “An Inconvenient Truth,” tweeted.

While many climate activists have harshly criticized Sen. Joe Manchin, DW.Va., for successfully demanding concessions to fossil fuel producers—such as increased oil and gas drilling on federal land—Gore praised him. “Thank you to Senators [Chuck] Schumer and Manchin and to every Senator who fought to ensure that climate action was a priority in this bill,” he tweeted.

While pleading to keep pushing for more action in the future, the Senate’s leading climate hawks rejoiced.

“We did it,” Tweeted Sen. Brian Shatz, D-Hawaii. “We passed the biggest climate bill that any country has ever passed. It is the reason I came to the Senate.”

I have also told the New York Times’ Lisa Friedman“Now I can look my kids in the eye and say we’re really doing something about climate.”

For the last 12 years, Sen. Sheldon Whitehouse, DR.I., has given a weekly address on climate change when the Senate is in session. He recently gave his 285th speech on the subject.

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“We’ve packed a lot into this historic legislation, and I look forward to spending the coming weeks and months talking with Rhode Islanders about how the bill will lower their energy and health care bills and create millions of jobs,” Whitehouse said in a statement. “I’m also very proud to have shaped the best climate components of the bill, which is expected to double to triple the rate of historical emissions reductions. While there’s still much more to do to lead the planet to safety in the race against climate change, this is by far the biggest step the United States has ever taken to lower emissions. It is good reason for hope.”

In 2009, when he was in the House of Representatives, now-Sen. Ed Markey, D-Mass., co-authored a bill that would have capped and gradually reduced the carbon emissions that are the leading cause of climate change. The bill, known as Waxman-Markey, passed the House but died in the Senate. Markey has remained a leading legislator on climate change since he moved into the upper chamber.

“Twelve years ago, I watched my landmark climate legislation pass in the House and die in the Senate,” Markey said in a statement on Sunday. “Today, powered by a movement that never once wavered in the struggle for a livable future, I joined my Democratic colleagues in passing a bill that makes historic investments in climate justice and delivers the resources we need to have a fighting chance at a livable planet .

“As I know all too well — doing nothing is a political option, but it’s not a planetary option. The Inflation Reduction Act is far from everything we wanted to achieve, but it’s the start of what we need.”

Before Waxman-Markey failed, then-President Barack Obama had tried unsuccessfully to help shepherd it through the Senate. On Sunday, Obama celebrated in a pair of tweets that his former vice president accomplished what he couldn’t.

“Thanks to President Biden and Democrats in Congress, people’s bills will get smaller, their lives will get longer, and we’ll have a real shot at avoiding the worst impacts of climate change,” Obama wrote.

Veteran environmental activist Bill McKibben did temper his elation with acknowledgment of the concessions to Manchin. McKibben wrote “The End of Nature,” one of the first popular books about climate change, published in 1989, and he co-founded the climate change advocacy group 350.org in 2007.

“34 years and 40 days ago, Jim Hansen broke the news of global warming to the US Senate,” wrote McKibben in a tweet, referring to the legendary 1988 congressional testimony in which Hansen, then director of NASA’s Institute for Space Studies, stated that the Earth had clearly warmed and that with “99 percent confidence” it was caused by the buildup of greenhouse gases in the atmosphere. “Finally, today, they act[.] It’s late, it’s deeply compromised, and it’s also a great victory for all who have fought so long and hard.”

Celebrities who have been outspoken activists on climate change also chimed in. Mark Ruffalo may be best known for playing the Hulk in Marvel movies, but he is also a leading activist opposing extracting natural gas and oil through fracking.

“As we are living through record heat, fires, floods, droughts, & climate anxiety, we can take a breath. A solid beginning. It will create meaningful jobs, bring manufacturing back to the USA, & begin to address climate change significantly,” I have tweeted.

Former New York City Mayor Michael Bloomberg, a multibillionaire, made climate change one of his signature issues as mayor and in his private philanthropy. On Monday he praised the bill and noted it would be a boon to local governments attempting to deal with climate change.

Leading climate scientists also cheered the news while already looking ahead to the possibility of further action in the future. Michael Mann, the director of the Earth System Science Center at Pennsylvania State University, tweeted that the IRA “Puts us on the path to meeting our obligation to cut carbon emissions in half by 2030, re-establishing American leadership on climate & paving the way to global climate action.” He followed up in response to critics who fretted that scientists were too celebratory of a bill that won’t, in and of itself, avert catastrophic climate change, to argue that it is a first step.

Katharine Hayhoe, who serves as chief scientist of the Nature Conservancy and a professor at Texas Tech, told Yahoo News that the bill’s passage would have global reverberations.

“This is huge,” Hayhoe said on Monday. “The United States is historically responsible for 25% of global carbon emissions and its influence outside its borders on technology, on policy, is enormous.”

Hayhoe acknowledged that the emission reductions would fall short of the US’s pledges in previous global climate agreements, but said “it’s a step in the right direction.”

“I particularly applaud the inclusive nature of the solutions,” she added. “Of course, there’s clean energy and there’s solar and wind and battery manufacturing, and tax credits, but there’s also funds to support climate-smart regenerative agriculture, to support restoring and conserving forest ecosystems and coastal habitats — and to support low-income communities who bear a disproportionate impact from climate change.”

There were, however, some detractors. Adam McKay, the director of the blockbuster film “Don’t Look Up,” a thinly veiled climate change parable, criticized the bill as “a greatest hits of everything wrong with USA.”

Peter Kalmus, a climate scientist at NASA’s Jet Propulsion Lab, gave the bill a mixed review in to Twitter thread running down its pros and cons.

The same dichotomy could be seen between mainstream environmental advocacy groups, which exulted in the bill’s passage, and some farther-left organizations that are particularly focused on opposing fossil fuel development.

“This is a historic moment for climate action, and a turning point in American climate policy,” said Evergreen Action executive director Jamal Raad. “Today, the Senate passed the largest climate investment in history — by far. This is the end of a decades-long road to pass a climate bill, but it’s only the beginning of the road towards achieving the greenhouse gas pollution reductions that science demands and building a better future for us all.”

Raad went on to acknowledge that painful compromises were made. Greenpeace USA, on the other hand, focused mainly on those concessions.

“The Inflation Reduction Act includes much needed investment in renewable energy, and a down payment on the union jobs we need to propel a green economy,” Greenpeace USA co-executive director Ebony Twilley Martin said. “But it is also a slap in the face to the frontline communities, grassroots groups, and activists that made this legislation possible. The IRA is packed with giveaways to the fossil fuel executives who are destroying our planet.”

While Greenpeace did not join its major counterparts such as the Sierra Club in urging swift passage of the IRA, it did not call for rejecting it either, instead asking Senate Majority Leader Chuck Schumer “to do everything in his power to kill” a side deal he made to secure Manchin’s support, in which the Senate will later take up separate legislation to streamline the process for obtaining permits for energy development projects.

Still, those views represented a minority opinion. Most people who have been working on climate change for decades seemed to agree with Hayhoe, who said they “should not let the perfect be the enemy of the good,” and Whitehouse, who told the Times’ Friedman: “It’s a bit of a dream come true.” But, he hastened to add, “Of course, it’s only the first chapter of the dream.”

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Global temperatures are on the rise and have been for decades. Step inside the data and see the magnitude of climate change.

After months of painstaking negotiations, Senate Democrats on Sunday approved a sweeping health care and climate change spending package that amounts to one of the largest tax hikes in decades.

The Inflation Reduction Act of 2022 – which passed along party lines with Democrats employing the budget reconciliation process – would raise an estimated $739 billion over the next decade, with the revenues going toward initiatives designed to combat climate change and curb pharmaceutical prices, as well as efforts to reduce the nation’s $30 trillion debt.

It includes about $433 billion in new spending, while roughly $300 billion of the new revenue raised would go toward paying down the nation’s deficit. Democrats say the legislation will help to reduce inflation and provide relief to Americans in the form of lower health care costs, while Republicans argue the measure does little to tackle higher prices – and could actually exacerbate the crisis.

The nonpartisan Congressional Budget Office said in an analysis last week that the spending bill will have a negligible impact on inflation.

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Senate Majority Leader Chuck Schumer gives two thumbs up after passage of the Inflation Reduction Act on Capitol Hill, Aug. 7, 2022. (Shuran Huang for The Washington Post via Getty Images/Getty Images)

The bill, which now heads to the House for a vote that could happen as soon as Friday, is a far cry from the ambitious $2 trillion agenda that President Biden rolled out last year that relied on major tax increases on wealthy Americans and corporations.

“This bill is far from perfect. It’s a compromise. But it’s often how progress is made,” Biden said at the White House last week. “My message to Congress is this: This is the strongest bill you can pass.”

Here is a closer look at the tax increases and other items included in the latest legislation:

Corporate minimum tax: $313 billion

The legislation would impose a 15% minimum tax on corporations based on profits they publicly report on their financial statements to shareholders.

The levy would only apply to companies that reported more than $1 billion in income. Democrats said the levy would affect around 200 of the country’s largest corporations – with profits exceeding $1 billion – that pay less than the current 21% rate for businesses.

Night falls at the Capitol in Washington, Dec. 2, 2021. (AP Photo/J. Scott Applewhite/AP Newsroom)

The private equity industry secured a last-minute victory when several Democrats voted with Republicans to exempt private equity companies and businesses they own from the new corporate minimum tax.

Prescription drug pricing reforms: $288 billion

Under the bill, the Medicare program would have the power to negotiate with pharmaceutical companies in order to lower prices for certain prescription drugs. The proposal would cap what seniors on Medicare pay out of pocket for drugs each year at $2,000. Seniors would also be eligible for free vaccinations if the bill passes, according to a copy of the legislation.

Democrats projected this will save the government roughly $288 billion over the next 10 years.

If pharmaceutical companies raise the prices of their drugs more than the rate of inflation, pharmaceutical companies would be required to rebate Medicare.

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A provision to cap insulin prices at $35 a dose was thrown out by the Senate parliamentarian, a nonpartisan referee, who ruled the limit could be applied to Medicare but not private insurance.

IRS enforcement: $124 billion

the Internal Revenue Service would receive $80 billion in order to enhance tax enforcement by hiring more agents and introducing new technology to pursue tax dodgers.

Democrats expect a beefed-up IRS to add an extra $124 billion in revenue by cracking down on tax evasion by wealthy individuals and corporations.

IRS headquarters in Washington, Feb. 25, 2022. (Al Drago/Bloomberg via Getty Images/Getty Images)

About $1 trillion in federal taxes may be going unpaid each year because of errors, fraud and a lack of resources to adequately enforce collections, IRS Commissioner Chuck Rettig said last year.

Audit rates have declined steadily over the last year, falling to the lowest level in at least four decades amid dwindling funding and enforcement staff (the IRS has 20,000 fewer staff than it did in 2010). The agency audited just 0.45% of personal income tax returns in 2019, down from 1.1% in 2010, Rettig said in January.

Stock buyback tax: $74 billion

The measure includes a 1% excise tax on corporate stock repurchase that is poised to take effect in 2023. Democrats – who estimated this new levy will raise about $74 billion over the next decade – are hoping to slow companies’ tendency to buy back their own stock from investors.

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“I hate stock buybacks,” Senate Majority Leader Chuck Schumer, DN.Y., said. “I think they are one of the most self-serving things that corporate America does.”

President Biden arrives at the Congressional Picnic on the South Lawn of the White House on July 12, 2022. (Chip Somodevilla/Getty Images/Getty Images)

Democrats included the stock buyback tax to fill the revenue gap after Sen. Kyrsten Sinema, D-Ariz., rejected a repeal of the break for carried interest. That loophole allows private equity fund managers to pay lower taxes on their earnings than they would for regular income, with part of an investment manager’s income taxed as a capital gain – a 23.8% levy – rather than regular income.