Inflation Reduction Act

The Inflation Reduction Act of 2022 (IRA), Pub. L. 117–169 (text) (PDF), is a United States federal law which aimed to reduce the federal government budget deficit, lower prescription drug prices, and invest in domestic energy production while promoting renewable 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). 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. 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 voting Republicans voted against it. It was described as a landmark piece of legislation. 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, as well as authorize $891 billion in total spending – including $391 billion on energy and climate change, and $64 billion on three years of Affordable Care Act subsidies. It represents the largest investment towards addressing greenhouse gas emissions in United States history. It also includes a large expansion of the Internal Revenue Service (IRS), including the hiring of up to 87,000 new employees to replace tens of thousands of recent departures, which led to over $1 billion being collected in past-due taxes from millionaires and other high-wealth individuals by July 2024. The act is generally not believed to have reduced inflation in 2022 and 2023, although some economists predict the renewable energy investments will bring down inflation...