US President, Joe Biden has signed a $700bn bill that aims to fight climate change and healthcare costs while raising taxes on the rich.
The new law includes measures to curb the price of prescription drugs while investing 375bn to fight climate change – the most significant federal investment in history in the issue.
Democrats believe the bill could provide a boost ahead of the mid-term elections in November when voters will decide whether Biden’s Democrats retain control of Congress for two more years.
The president hailed the bill as he signed it on Tuesday August 16, as the “final piece” of his domestic agenda.
The bill is projected to lower US emissions by up to 44% by 2030, compared with the current US trajectory, which would lower emissions by up to 35%, according to an analysis by the Rhodium Group, a consultancy.
The bill does not require companies to reduce their emissions, but includes tax incentives for firms to invest in renewable energy and rebates for people who buy electric cars or invest in energy-efficient home improvements.
The bill sets a minimum 15% tax for corporations, and will entail no tax hikes for those with incomes below $400,000 a year.
The package also allows the government to negotiate lower prices for some prescription medicines provided under its Medicare health insurance programme for those aged over 65.
Biden said the measure was a “historic moment”, adding: “Every single Republican in Congress voted against this bill.”
However, Republican Senate leader Mitch McConnell said the legislation “means higher taxes, higher energy bills, and aggressive IRS [tax] audits”.