Key Takeaways of Inflation Reduction Act from Congressman Jake Auchincloss

On Friday, August 12, 2022, Westwood Minute spoke with Congressman Jake Auchincloss (D-MA District 4) just before he headed to the House Floor for casting his “Yea” vote in joining his Democratic colleagues to pass the Inflation Reduction Act along party lines. The Congressman highlighted what he views as key takeaways for his constituents in this massive piece of legislation. 

The Inflation Reduction Act does three key things. It lowers health care costs, makes historic investment to promote clean energy independence, and does so while reducing the budget deficit, Congressman Auchincloss says.

Lower Health Care Costs

More than 10 million working families and those who rely on Medicare for prescription drugs will experience benefits of lower health care costs, notes the Congressman, who describes himself as an early advocate for capping prescription drug costs.

“The deal should be you pay a premium and when you get sick, insurance should be there to pay the cost.” After a patient has paid the premium, “You should not then be subjected to a lot of out-of-pocket expenses when you get sick,” he says.

Representative Auchincloss notes that provisions for lower health care costs address the problem faced by many Medicare beneficiaries who hit a doughnut hole in medical insurance coverage for prescription drugs. A gap in Medicare Part D prescription drug coverage has been a problem where patients receive Medicare coverage up to a certain amount for prescription drugs, after which insurance stops paying and the patient pays until reaching a maximum cap set for out-of-pocket costs. Reaching the out-of-pocket cap then triggers Medicare’s Catastrophic Coverage. In between those two points of insurance coverage, the patient pays the full costs of prescription drugs. 

In contrast, under the Inflation Reduction Act, “If you are a senior on Medicare, there’s a cap for insulin at $35, and never at any point will you pay more than $2,000 a year for prescription drugs,” the Congressman gives as an example.

Investment in Clean Energy Independence

Congressman Auchincloss observes that the Inflation Reduction Act is the “biggest climate action in all of history.” Under the Act which directs $369 billion to energy security and climate change, a general tax credit is given to investors and producers of clean energy.

Tax credits to investors and producers of clean energy across the board represents a strategy that is “a way to advance a sector without picking winners or losers.” The Congressman states, “It’s not solar over nuclear. We know it has to be everything – wind, solar, geothermal, nuclear are all part of the equation,” he says.

Stimulating investment in this way will promote clean energy independence, ensuring that “our children will inherit cleaner air and water,"says the Representative.

Inflation

Along its road to passage, the title of this legislation - the Inflation Reduction Act - has been criticized by some as  a misnomer, where inflation is not addressed in any significant way. Congressman Auchincloss responds that the Act, among other things, drives down out-of-pocket costs for patients who currently have high health care costs.

He observes that dependence on foreign oil causes reliance upon autocrats. In contrast, “Clean energy gives us much more stable and sustainable energy sources in the long run and that’s going to be deflationary and lower prices for Americans broadly and in the long run,” he says.

Source of Funding

Higher taxes on only the wealthiest Americans and corporations will fund these initiatives. “No family making less than $400,000 a year will see any tax increase,” Congressman Auchincloss explains.

He notes that the legislation targets corporations, which have been shielded from taxes in the past. The revenue that is raised from IRS tax enforcement has been estimated to be $124 billion.

“This is not a tax hike. . . . Anytime we as Democrats try to make all Americans pay their fair share, Republicans will say it’s a tax hike. No one likes higher taxes. . . . So, it’s important to pierce through to what we are really saying. . . . We’re asking those who have succeeded to pay it forward so we can make this economy work for everyone, says the Congressman.

When Will Constituents Feel Changes from the Act?

Some changes ushered in by the Inflation Reduction Act will be felt quickly, and others will be phased in, says the Congressman. For Medicare beneficiaries who take insulin and previously paid more than $35 for it, they will see changes in costs beginning next year. The clean energy tax credit should have an immediate impact on the offshore wind industry, with immediate changes in economic development.

Thanks to Congressman Jake Auchincloss for speaking with Westwood Minute.

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