How Congress is addressing inflation, climate change and the deficit

By U.S. Sen. Angus King, I-Maine

From electric bills to groceries, people across Maine are struggling with rising prices. While there are dozens of causes of inflation, they boil down to one result: your money isn’t going as far as it used to. Congress had to think big to address this challenge — and with the just-passed Inflation Reduction Act, we’ve taken a major step to bring both immediate and long-term relief to Maine people.

This historic legislation will cut costs, create jobs, curb climate change and reduce the federal deficit.

It starts with health care — one of the areas where prices are rising the most. Maine people – especially seniors — are spending too much on the medications and care they need to live healthy, productive lives. Many have had to make impossible choices between paying for medicine or putting food on their table.

The Inflation Reduction Act rights that wrong by finally allowing Medicare to negotiate the price that it pays for prescription drugs and capping beneficiaries’ out-of-pocket medication costs at $2,000 per year. In addition, the legislation extends critical subsidies to keep premiums low for those receiving coverage through the Affordable Care Act (ACA).

The result? Lower costs and less financial stress for the nearly 30 percent of our state enrolled in Medicare and the more than 100,000 Maine people who receive health care through the ACA. It’s not just good for consumers but also for the federal government, as drug negotiation will reduce the deficit by hundreds of billion of dollars over the next 10 years.

Health care clearly isn’t the only place where costs are up. Everyone is feeling prices at the pump, and while they’ve dropped 95 cents per gallon since June 14, gas prices are still a real burden on all of us. The Inflation Reduction Act includes both rapid relief and long-term solutions to lower energy costs.

To tackle these current price hikes, the Inflation Reduction Act works to drive down oil and gas costs by investing in new and better American fuel infrastructure. With more capacity for production we can put more gas on the market and lower prices. Combined with support for household energy savers like heat pumps and insulation, the bill could cut energy expenses for the average Maine family by almost $2,000 a year — and that’s just the short-term benefits.

Looking to the future, the smartest way to lower energy costs is to incentivize clean, affordable, American-produced energy. That’s why the bill provides much-needed funds to boost domestic manufacturing of wind, solar, hydropower, battery storage, and other key technologies. This will be the largest investment in renewable energy ever, cut carbon emissions by nearly 40 percent by 2030, and create thousands of good-paying jobs nationwide

Here’s the part where you may say “yes, but show me the price tag.” The answer will surprise you: This legislation will actually reduce the deficit by $1.9 trillion over the next two decades. Beyond the savings we’ll see from Medicare drug negotiations, the bill takes two simple, commonsense steps to ensure that mega corporations and the wealthiest among us pay their fair share of taxes.

First, the legislation will make it much more difficult for massive corporations earning more than $1 billion in profits to exploit loopholes and pay less than 15 percent in taxes. Let me emphasize again: This only applies to companies that earn a profit of more than $1 billion, so they clearly can afford to pay their fair share. This provision will have no impact on Maine’s small businesses (or even our medium or large businesses). It just makes sure that a welder at BIW isn’t paying more in income taxes than Nike does.

Second, the bill goes after wealthy tax cheats who are taking advantage of an underfunded Internal Revenue Service (IRS) to get out of paying what they owe. By simply giving the IRS the resources it needs to enforce the tax laws on the books, we can return as much as $7 in uncollected taxes for every dollar we invest; talk about bang for your buck.

At the end of the day, I believe the Inflation Reduction Act is a huge step to address the most pressing issues facing our country. It will dramatically lower health care and energy costs, cut carbon emissions, and reduce the deficit for decades. Any of these provisions on their own would be incredibly impactful; combined, they are a historic piece of legislation that addresses today’s challenges and sets Americans up for stable, sustained success in the decades ahead.