Louisiana Budget Project Executive Director Jan Moller issued the following statement in response to President Joe Biden signing the Inflation Reduction Act:
The Inflation Reduction Act, signed into law on Tuesday, makes America’s tax code more fair by requiring large, profitable corporations to pay more in taxes, and giving the IRS new resources to help ensure that the ultra-wealthy comply with our tax laws. The revenue gained from these reforms will make health care more affordable for millions of Americans and put the country on the path to a more sustainable energy future.
This law is important for every state, but especially Louisiana – which suffers from high rates of poverty and is especially vulnerable to the dangerous effects of climate change.
The new law continues for three years the enhanced premium tax credits that have made health insurance more affordable for 14.5 million Americans who buy coverage through the marketplace. Without this provision, premiums were set to spike on Jan. 1, and would have caused more than 3 million people – including 64,000 in Louisiana – to drop their health insurance.
It also makes prescription drugs more affordable for our seniors on Medicare by capping out-of-pocket costs at $2,000 and allowing the government to negotiate prices on some prescription drugs.
But its most long-lasting impact will be on climate, where the new law promises to speed up the transition to a cleaner economy that runs on renewable energy. With a long history as an energy-producing state, Louisiana must take advantage of the law’s many incentives to reimagine the ways that electricity is produced and consumed.
Unfortunately Congress left some very important priorities out of the deal, such as paid family leave, funding for early childhood education and the expanded Child Tax Credit that helped reduce child poverty by more than 40% last year. Congress also missed a chance to close the coverage gap in states that have refused to expand Medicaid, and to close the notorious carried-interest loophole.
Still, the Inflation Reduction Act is an important step forward for America, and Louisiana, that will help reduce poverty and financial hardship and put our economy on a stronger path forward.