Senate Democrats passed their signature climate, tax and health care package on Sunday, after more than a year of grueling back and forth – and sometimes nonexistent – negotiations. The Inflation Reduction Act would raise taxes on profitable corporations and high-income households, and use the revenue to reduce the cost of health insurance and some prescription drugs and make historic investments in reducing the rate of climate change that hurts low-income communities. Politico has the scoop on the long-awaited package. 

The core of the legislation includes lowering some prescription drug prices, providing more than $300 billion into climate change and clean energy and imposing a 15 percent minimum tax on large corporations, plus a new 1 percent excise tax on stock buybacks. The bill also increases IRS enforcement and extends Obamacare subsidies through the 2024 election.

The bill is significantly smaller than the initial goals of Build Back Better, but still has the potential to affect millions of people by creating new incentives to buy electric cars, appliances and solar power. The Washington Post breaks down all the potential changes that are coming.

Students are absent too often
As Louisiana students head back to class this week, far too many of them will be routinely late or absent from school without an excuse. The Advocate’s Will Sentell reports that Louisiana’s truancy rate – defined as five or more unexcused absences or tardies in one semester – has risen sharply since before the pandemic, and that the increases are not limited to poor-performing schools. A notable outlier is Ascension Parish, which has taken several steps to address the issue. 

Schools are encouraged to contact parents at the three, five, seven and 10-day marks for missing classes without an excuse. In some cases school officials visit the home of the student. Under a new pilot project, a truancy panel will allow parents to appear as they would in truancy court to see what is blocking school attendance, including mental health, transportation, child custody, domestic violence, food security or other issues.

Homeowner insurance market heading toward a crisis
Over the weekend, Weston Property & Casualty Insurance Co. became the eighth insurer writing policies in Louisiana to go under following hurricanes Laura, Delta, Zeta and Ida. The Miami-based insurer will now be taken over by Florida’s government, forcing the 10,300 Louisiana policyholders into the Pelican state’s industry bailout program. Nola.com’s Michael Finch II reports on how Louisiana’s homeowners insurance is in crisis mode. 

Property insurers have paid out $18.4 billion in claims as of June 30, according to Louisiana Department of Insurance data. About $11 billion of that was paid to homeowners, the data shows. The guaranty association’s estimate that it will need $600 million to pay off the losses from the failed companies was meant to include a little cushion. But it’s too soon to say what the actual cost will be, said John Wells, the association’s executive director. “Just unearned premium alone, I’m guessing, will be in the $10 million or $15 million range,” Wells said, referring to premiums that were paid in advance and must be returned to Louisiana customers.

Insurance Commissioner JIm Donelon offered no short-term fixes for rising premium prices and the much graver prospect that the damaging effects of climate change will price insurance companies out of the state for good. 

“Why can’t they get a policy comparable to what they were already paying?” asked Rep. Jason Hughes, D-New Orleans, reading from a question card submitted by somebody in the crowd.  “I don’t have an answer for that,” Donelon said, adding that legislators need to address that issue.  When asked if the state will reach a point when catastrophic climate change drives all of the insurers out of the state, or companies will simply hike the costs to a point where homeowners can’t afford it, Donelon said “I hope not, because the state can’t afford it.” 

Inflation now, unemployment later
During the early days of the pandemic, many rich Americans built up savings as their assets – stocks, bonds, houses, etc. – rose in value. This increase in wealth largely insulated them from the effects of recent inflation. For many lower-income households, this phase of the pandemic tells a very different story:  While government aid earlier in the pandemic helped workers in low-wage jobs build a small financial cushion, those savings are now largely gone, as federal aid has been allowed to expire and prices continue to climb. The New York Times’ Jeanna Smialek and Casselman explain how the Federal Reserve’s decision to raise interest rates to tamp down inflation is forcing the poor to deal with high inflation in the near term and the prospect of higher unemployment down the road. 

The Fed might need to raise interest rates even more to bring inflation under control, and that could cause a sharper slowdown. In that case, poorer families will almost certainly bear the brunt again, because low-wage workers are often the first to lose hours and jobs. The bifurcated economy, and the policy decisions that stem from it, could become a double whammy for them, inflicting higher costs today and unemployment tomorrow. “That’s the perfect storm, if unemployment increases,” said Mark Brown, chief executive of West Houston Assistance Ministries, which provides food, rental assistance and other forms of aid to people in need. “So many folks are so very close to the edge.”

Number of the Day
57,000 – Number of Louisianans who buy health insurance through the federal marketplace. The Inflation Reduction Act extended subsidies for marketplace insurance plans, holding off a premium increase for those households (Source: Urban Institute)