By signing the Inflation Reduction Act, President Biden is delivering on his promise to build an economy that works for working families, including rural families. The Inflation Reduction Act makes historic investments in America’s future while lowering health care and energy costs. It’s the most aggressive action we have taken to confront the climate crisis. It’ll lower the deficit and ask the super wealthy and corporations to pay their fair share. And no one making under $400,000 per year will pay a penny more in taxes.
President Biden and Congressional Democrats beat back the special interests to pass this historic legislation that will build a brighter future for rural Americans by lowering costs, invests in rural communities to expand access to affordable clean energy and energy efficient upgrades, and grows the economy from the bottom up and the middle out.
LOWER HEALTH CARE COSTS
The Inflation Reduction Act (IRA) will build on the success of the Affordable Care Act (ACA) and the American Rescue Plan (ARP) by helping to lower health care costs, including prescription drug costs, and expanding coverage for millions of Americans.
Lower Prescription Drug Costs for Seniors: Because seniors disproportionately choose to live in rural America, rural Americans stand to disproportionately benefit from the Inflation Reduction Act as it lowers prescription drug costs for seniors on Medicare. Today, Americans pay 2-3 times more for their prescription drugs than people in other wealthy countries. The Inflation Reduction Act increases access to medication in rural areas by improving prescription drug coverage and lowering drug prices in Medicare. The law:
- Caps the amount that seniors will have to pay for prescription drugs they buy at the pharmacy at $2,000 a year, giving peace of mind to seniors who no longer have to worry about spending thousands and thousands more on prescription drugs.
- Caps the amount that seniors will have to pay for insulin at $35 for a month’s supply.
- Means that seniors on Medicare will now have access to a number of additional free vaccines, including the shingles vaccine.
- Will further lower prescription drug costs for seniors by allowing Medicare to negotiate the price of high-cost drugs and requiring drug manufacturers to pay Medicare a rebate when they raise prices faster than inflation.
Lower Health Insurance Premiums and Expand Coverage: Since the implementation of the ACA’s coverage expansions, the uninsured rate among rural Americans decreased by 8%, from about 24 percent in 2010 to 16 percent in 2019. The Inflation Reduction Act continues the American Rescue Plan’s more generous Affordable Care Act premium tax credits
- Thanks to the American Rescue Plan, 65 percent (1.3 million) of the 1.9 million rural uninsured Americans in states using the HealthCare.gov had access to a $0-premium health insurance plan for 2021. The Inflation Reduction Act will help keep free or low-cost health insurance available to rural Americans, with average savings of about $800 per person per year. As a result, about 3 million more Americans will have health insurance coverage next year, compared to without the IRA.
COMBAT CLIMATE CHANGE AND LOWER ENERGY COSTS
This Inflation Reduction Act represents the single largest investment in climate and clean energy solutions in American history. The law invests in rural communities to expand access to affordable clean energy and energy efficiency upgrades, create good-paying jobs through climate-smart agriculture and conservation, and protect communities from intensifying climate impacts like wildfires and extreme heat. Because of this legislation, farmers, ranchers, and foresters will have the tools they need to adopt practices that recognize the valuable role our lands provide in tackling the climate crisis.
Clean Energy and Energy Efficiency: The Inflation Reduction Act boosts the long-term resiliency, reliability, and affordability of rural electric systems, helps families save money on utility bills, and expands rural opportunities in the clean energy economy. It provides:
- Rural electric cooperatives, which serve 42 million customers, resources to advance clean energy projects, energy efficiency improvements, zero-emission systems, and more. And for the first time, these co-ops will now be eligible for direct-pay clean energy tax credits.
- An expansion of USDA’s Rural Energy for America Program to support clean energy and energy efficiency projects for more than 41,500 farms and small businesses.
- Investments to advance biofuel infrastructure to help 4,600 retailers boost domestic supplies of clean fuels.
Support for Farmers, Ranchers, and Forest Landowners: The Inflation Reduction Act recognizes the critical role that America’s farmers, ranchers, and forest landowners play in addressing the climate crisis. The law will:
- Invest in helping farmers, ranchers, and forest landowners deploy climate-smart practices that will reduce greenhouse gas emissions, increase storage of carbon in soils and trees, and make their operations more productive.
- Support innovative, cost-effective ways to measure and verify climate benefits, including through USDA’s Environmental Quality Incentives Program, Conservation Stewardship Program, Agricultural Conservation Easement Program, Regional Conservation Partnership Program, and Conservation Technical Assistance.
- Help up to 280,000 farmers and ranchers apply conservation to approximately 125 million acres of land.
Strengthening the Resilience of Rural Lands to Climate Impacts: The Inflation Reduction Act protects communities from the risks of wildfires and make public and private lands more resilient in the face of climate change. These investments will help:
- Protect 1.8 million acres of National Forest System Lands from wildfire and restore an additional 550,000 acres of federal lands.
- Increase climate resilience of forests on 280,000 acres of non-federal land, support conservation easements on 475,000 private acres, and prepare management plans for an additional 1,500,000 private acres.
- Strengthen habitats and infrastructure to withstand climate-induced extreme weather events in our National Parks, National Wildlife Refuges and across our public lands.
- Address the long-term drought conditions that are afflicting large swaths of rural America.
Supporting Energy Producing Communities: The Inflation Reduction Act invests in revitalizing economies of energy communities across the country, by create good-paying, union jobs, and supporting workers in coal, oil and gas, and power plant industries by:
- Reinstating funding for the Black Lung Disability Trust Fund, which provides payments and medical treatment to coal miners suffering from breathing and respiratory challenges.
- Authorizes $250 billion in loans through the Department of Energy’s Loan Programs Office to retool legacy energy infrastructure like transmission lines, refineries and power plants for the net-zero economy.
- Provides a 10% bonus tax credit for wind and solar projects that are developed in places that have seen a coal mine or power plant close or have seen employment losses as a result of contractions in the fossil fuel economy.
- Delivers tax credits for clean energy manufacturing projects that are developed in energy communities where coal mines and power plants have closed with bonus credit for projects creating good-paying union jobs.
SUPPORT FARMERS AND RANCHERS
We need every farmer to contribute to reducing food inflation and feeding the nation and the world. The Inflation Reduction Act will help keep distressed farmers farming and provide assistance to farmers who have experienced discrimination in USDA’s leading programs. The law includes:
- Relief for distressed USDA borrowers whose agricultural operations are at risk through loan modifications or payments.
- Financial assistance to farmers who have experienced past discrimination in USDA lending programs.
MAKE THE TAX CODE FAIRER
President Trump and Congressional Republicans’ 2017 tax law only made an unfair tax system worse. The Inflation Reduction Act of 2022 is a critical step forward in making our tax code fairer. It will raise revenue by:
- Ensuring that high-income people and large corporations pay the taxes they already owe.
- Cracking down on large, profitable corporations that currently get away with paying no federal income tax.
- Imposing a 1% surcharge on corporate stock buybacks that will encourage businesses to invest.
The legislation’s tax reforms won’t just raise revenue to finance critically needed investments to lower costs and combat climate change, they are also an important component of building an economy that rewards work rather than wealth and doesn’t let the rich and powerful get away with playing by a separate set of rules.
Millions of working families will have better access to the benefits they are entitled to under the tax code and be able to get their questions answered quickly and efficiently, thanks to the Act’s transformational investments in the Internal Revenue Service. And, no family making less than $400,000 per year will see their taxes go up by a single cent.