Long title | To provide for reconciliation pursuant to title II of S. Con. Res. 14. |
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Acronyms (colloquial) | IRA |
Enacted by | the 117th United States Congress |
Effective | August 16, 2022 |
Citations | |
Public law | Pub. L. 117–169 (text) (PDF) |
Statutes at Large | 136 Stat. 1818 |
Legislative history | |
| |
Major amendments | |
Fiscal Responsibility Act of 2023 |
The Inflation Reduction Act of 2022 (IRA) is a landmark[1][2] United States federal law which aims to possibly reduce the federal government budget deficit, lowering prescription drug prices, and investing into domestic energy production while promoting clean energy. It was passed by the 117th United States Congress and signed into law by President Joe Biden on August 16, 2022.
It is a budget reconciliation bill sponsored by Senators Chuck Schumer (D-NY) and Joe Manchin (D-WV).[3] The bill was the result of negotiations on the proposed Build Back Better Act, which was reduced and comprehensively reworked from its initial proposal after being opposed by Manchin.[4] It was introduced as an amendment to the Build Back Better Act and the legislative text was substituted. All Democrats in the Senate and House voted for the bill while all Republicans voted against it.[5][6]
According to the nonpartisan Congressional Budget Office (CBO) and Joint Committee on Taxation (JCT), the law will raise $738 billion from tax reform and prescription drug reform to lower prices, and authorize $891 billion in total spending – including $783 billion on energy and climate change, and three years of Affordable Care Act subsidies.[3][7][8] The law represents the largest investment into addressing climate change in United States history.[9] It also includes a large expansion of the Internal Revenue Service (IRS) headcount, including the hiring of up to 87,000 new IRS employees which amounts to a doubling of the size of the IRS. These funds are intended to increase the number of audits performed on many businesses but has been criticized for what many perceive to likely be a disproportionate targeting of small business owners.[10][11][12][a] According to several independent analyses, the law is projected to reduce 2030 U.S. greenhouse gas emissions to 40% below 2005 levels.[13][14]
U.S. President Joe Biden said in August 2023 that the Inflation Reduction Act was inaptly named because it had "less to do with reducing inflation than it has to do with providing alternatives that generate economic growth". The CBO had projected the law would have a negligible effect on inflation, and it did not appear to reduce inflation at all, though it also did not appear to have increased inflation.[15]
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