By Ricardo Evangelista
JOE Biden is, by some measures, a very unpopular President. Earlier this month, a poll of the electorate showed the incumbent President’s popularity had dropped to levels even below those of Donald Trump during the darker days of his tenure. Still, against all odds, Mr Biden’s record may leave a deeper mark in history than some of his more glamorous predecessors, such as Barak Obama or Bill Clinton. Less than two years into his first term, Mr Biden has seen two very important pieces of legislation passed into law. A remarkable achievement, considering that he did so with a 50/50 Senate where only the vote of the Vice-President gives the Democrats the faintest of majorities.
The climate, tax and health bill, whose official name is The Inflation Reduction Act, entails the most important US investment in sustainability ever, with almost $400 billion of tax credits to incentivise the use of electrical cars and production of electricity from renewables. According to analysts, the bill will significantly support the country’s goal of reducing, by 2030, carbon emissions to 40 percent below the levels of 2005.
The new law also aims to control the cost of some prescription drugs, such as insulin, which in the US ranks among the highest in the world. For the first time the Federal Government, through Medicare, will be able to negotiate directly with pharma companies. This measure, which initially will apply to 10 drugs, has the potential to save billions of dollars of public money. Also, healthcare subsidies that were due to expire at the end of the year will be extended, allowing those on lower incomes to maintain healthcare insurance at lower premiums.
Last but not least, the law has a fiscal dimension. The tax bills of wealthier individuals and large corporations will increase. There will be a new 15 percent minimum tax on corporate profits when companies declare more than one $1 billion of annual gains. These changes aim to boost the IRS’s capacity, with a substantial increase in revenues.
Whether one agrees with it or not, it is undeniable that the Inflation Reduction Act is a monumental piece of legislation, both in scope and impact. And, if that wasn’t already enough, there is also the “Chips Plus” act. The first significant piece of industrial legislation passed in the US since the 1980s. This bill will invest tens of billions of dollars in research and development, creating conditions for a renaissance in innovation that is likely to revive the nation’s industry, which has lost importance in relation to that of countries such as China.
Both bills will have an important long-term effect, even if Joe Biden loses the next presidential election. The impact of his mandate will be felt for decades, as the next incumbent, even if it is a Republican, won’t be able to easily reverse the policies as they have been approved by both chambers of the house.
Quietly and amid considerable criticism, the current US administration has secured what may be a substantial boost for the American economy, which many will welcome during these uncertain times.