The Inflation Reduction Act was signed into law on 16 August 2022 after Senator Joe Manchin and Majority Leader Chuck Schumer struck a deal in late July. The reconciliation law pairs roughly $370 billion in clean-energy investment with deficit-reduction measures, a 15% corporate minimum tax, a $2,000 annual out-of-pocket cap for Medicare drug costs, and authority for Medicare to negotiate certain drug prices. Economists debated how much it would actually lower near-term inflation, but it reshaped US energy, tax and drug-pricing policy.
The Inflation Reduction Act was signed into law on 16 August 2022 after Senator Joe Manchin and Majority Leader Chuck Schumer struck a deal in late July. The reconciliation law pairs roughly $370 billion in clean-energy investment with deficit-reduction measures, a 15% corporate minimum tax, a $2,000 annual out-of-pocket cap for Medicare drug costs, and authority for Medicare to negotiate certain drug prices. Economists debated how much it would actually lower near-term inflation, but it reshaped US energy, tax and drug-pricing policy.
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Provisions like the Medicare drug cap and energy incentives were intended to lower specific household costs; the law's overall effect on broad cost-of-living pressure is debated, hence a moderate, hedged weight.
