Much has happened in Washington the past several weeks, from the passing of the Inflation Reduction Act to President Biden announcing that $10,000 to $20,000 in student loan debt will be forgiven. The Inflation Reduction Act, for its part, is a much smaller version of Build Back Better, a massive piece of legislation that contained much of Biden’s agenda — famously derailed by Senator Joe Manchin of West Virginia.
However, after negotiations between Manchin and Senate Majority Leader Chuck Schumer, Democrats were all finally on board on a landmark piece of legislation ahead of the midterms.
While the $740 billion package is a far cry from the $1.5 to 2 billion price tag of an already watered-down Build Back Better, there is much in it that Democrats have been advocating for, for years. An unprecedented investment by the U.S. government in combating climate change and reducing the U.S.’s carbon emissions by 40 percent by 2030, it’s a massive undertaking. As part of combating climate change, the bill has funding for millions of solar panels, hundreds of thousands of wind turbines, tax credits for electric vehicles, and consumer rebates for families that buy energy-efficient appliances, among of host of other clean energy provisions.
The Inflation Reduction Act allows Medicare to negotiate drug prices and caps pharmacy costs at $2,000 per year for millions of Americans on Medicare Part D (with insulin being capped at $35 a month for Medicare beneficiaries). It also beefs up the IRS and its staffing considerably, along with tax provisions aimed at ensuring that America’s largest corporations pay taxes, with a minimum 15 percent corporate tax rate. It is unclear if the Inflation Reduction Act will reduce inflation in the short-term, but it is estimated to lower the deficit by $300 billion over the next decade.
It does not accomplish everything that Democrats wanted but is seen as a compromise from all sectors of the party: having something deliverable to their constituents that they can point to.
On top of the Inflation Reduction Act, President Biden announced that $10,000 in student loans would be forgiven for individuals earning less than $125,000 a year ($250,000 for married couples), and $20,000 in loan forgiveness for students who received Pell grants. He also extended the freeze on student loan payments (allegedly for the final time) until December 31 of this year, and a key part of his relief plan is a cap on student loan repayments at 5 percent of an individual’s income.
Over 40 million Americans carry student loan debt, and this relief will cancel completely the debt of at least half. This fulfills a promise Biden made on the campaign trail to forgive $10k in student debt though many Democrats and progressives think this forgiveness plan falls too short, arguing that many are saddled with far more student loan debt than $10k to $20k.
While it’s welcome and long overdue that millions will receive some relief from an education system that has bloated costs to astronomical prices, the root of the issue needs to be addressed: higher education institutions largely making education so unaffordable for the average person.