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Inflation Reduction Act becomes law, a major win for working families

Photo Credit: Getty Images
By AFSCME Staff ·

President Joe Biden today signed the Inflation Reduction Act, a law that will lower costs for families while reducing the federal deficit, allow Medicare to negotiate drug prices, fight climate change, and more.

During a signing ceremony, Biden called the new legislation “one of the most significant laws in our history.”

“This is a law in which the American people won and special interests lost,” Biden said, adding that his administration “began in a dark time in America” but is now “delivering results for the American people.”

“Today offers further proof that the soul of America is vibrant,” Biden said. “That the promise of America is real and just beginning.”

AFSCME President Lee Saunders hailed the landmark legislation.

“The Inflation Reduction Act is another example of what we can achieve when we elect pro-worker candidates committed to improving the lives of everyday people instead of enriching billionaires and CEOs,” Saunders said in a statement. “It builds on the progress made by previous legislation to fund state and local public services, empower and invest in child care workers, repair our roads and bridges, rebuild water systems, and so much more.”

Among other things, the legislation will:

  • Make prescription drugs cheaper by allowing the federal government to negotiate lower Medicare drug prices and by penalizing prescription drug corporations for hiking drug prices in Medicare by more than the overall inflation rate;
  • Lower health insurance costs by an average of $800 a year for the 13 million Americans who buy individual coverage in the marketplace exchanges under the Affordable Care Act;
  • Fight the climate crisis and improve our energy security by providing tax credits and unprecedented investments for energy projects, creating thousands of new jobs, and helping lower energy costs in the future;
  • Make large corporations pay their fair share of taxes by requiring a minimum 15% income tax, putting a 1% tax on corporate stock buybacks, and ensuring corporations and the wealthiest pay the taxes they owe; there will be no tax increases for individuals and families earning under $400,000 a year. 

Additionally, the White House says the legislation will help create millions of well-paying jobs in the clean energy sector and reduce the federal deficit by hundreds of billions of dollars.

AFSCME members and retirees throughout the country have long advocated for these priorities. The new law is a historic victory for working families.

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