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Case Votes for Historic Measure to Combat Climate Crisis and Lower Costs for American Families

The Inflation Reduction Act Wins Final Approval by Congress, Awaits President’s Signature

(Washington, DC) – Congressman Ed Case (HI-01) today voted to pass the Inflation Reduction Act of 2022 (Act), which will make the largest climate investment in American history, lower health care and prescription drug costs for families and older adults, boost America’s manufacturing capacity, create good-paying jobs in the clean energy sector, and more, all while cutting the federal deficit.

“Families across our Hawai‘i are suffering from high energy prices at the pump and on their electricity bills, along with rising health care costs in their pharmacies and at the doctor’s office,” said Case. “To help everyone during these challenging times, the Inflation Reduction Act will lower health care premiums, prescription drug costs and out-of-pocket spending for seniors, while increasing American energy security, reducing energy costs and creating millions of jobs. The Act will also bring down the national deficit and debt by ensuring corporations pay their fair share and allocating Medicare savings back to fiscal responsibility.”

“The crisis of climate change is very real and accelerating, and we must lead the world in combatting it on every front,” said Case. “By investing $369 billion in clean energy, this measure provides for the single biggest climate investment in U.S. history. It increases renewable energy production, lowers energy costs and our dependency on imported oil, and reduces national emissions to 40% below 2005 levels by 2030. This will help Hawai‘i achieve its goal of 100 percent clean energy by 2045.”

Clean Energy Investments

The Act’s provisions to address the use and production of energy in Hawai‘i and Hawai’i energy costs include:

Residential Clean Energy

·        Provides $9 billion in consumer home energy rebate programs, focused on low-income consumers, to electrify home appliances and for energy efficient retrofits. Additionally, it provides a $1 billion grant program to make affordable housing more energy efficient.

·        Includes 10 years of consumer tax credits to make homes energy efficient and run on clean energy, making heat pumps, rooftop solar, electric HVAC and water heaters more affordable. 

Energy Production

·        Includes production tax credits to accelerate U.S. manufacturing of solar panels, wind turbines, batteries, and critical minerals processing, estimated to invest $30 billion and $10 billion investment tax credit to build clean technology manufacturing facilities, like facilities that make electric vehicles, wind turbines and solar panels.

·        Invests in electric vehicles (EVs). The measure would modify the existing tax credit that provides as much as $7,500 to individuals for purchases of qualifying electric vehicles. It would equal 30% of the vehicle’s sale price or the incremental cost of the vehicle, whichever is less. The credit currently phases out after at least 200,000 qualifying EVs are sold by a manufacturer. The measure would change the credit through 2032 so it:

o   Applies to “clean vehicles” such as electric and fuel cell vehicles.

o   Applies to vehicles with final assembly occurring in the U.S.

o   Equals $3,750 if a certain percentage of the critical minerals contained in the vehicle’s battery is extracted or processed in the U.S. or in any country with which the U.S. has a free trade agreement or is recycled in North America. The applicable percentage would start at 40% for vehicles placed in service in 2023 and increase to 80% by 2027.

o   Equals $3,750 if a certain percentage of the value of components in a vehicle’s battery is manufactured or assembled in North America. The required percentage would start at 50% for vehicles placed in service in 2023 and increase to 100% by 2029.

o   Phases out beginning at $300,000 for joint filers and $150,000 for single filers.

o   Bars credits if inputs for a vehicle’s battery are sourced or made in China, Russia, Iran or North Korea. It would also bar credits for vehicles if the suggested retail price exceeds certain amounts.

o   Establishes credits through 2032 for purchasing a:

§  Used clean vehicle. The credit would equal $4,000 or 30% of the vehicle’s sale price, whichever is lower. It would phase out at $150,000 for joint filers and $75,000 for single filers.

Health Care Investments

The Act will protect affordable health care for millions of Americans, especially for Hawaii’s kūpuna, with the biggest change on Medicare being able to lower prescription drug prices and annual out-of-pocket costs for seniors. “I have fought for two decades, dating back to my first years in Congress, to allow Medicare to negotiate directly down the price of high-cost and high-use pharmaceutical drugs, and this measure will finally achieve that goal for the nearly 300,000 Medicare beneficiaries in Hawai‘i and millions more across the country,” said Case. “The Act will also build on the promise of the Affordable Care Act and efforts made in the American Rescue Plan Act to make health care plans more affordable and ensure no one has to decide between getting the care they need and paying for groceries, rent or other essential needs.”

The Act includes several landmark health care provisions that would lower prescription drug prices and the cost of health coverage for people in Hawai‘i:

Negotiate Lower Drug Prices

·        Empowers the federal government to negotiate drug prices on the highest cost single-source drugs purchased in Medicare, lowering prices for seniors and people with disabilities.

·        Requires the federal government to begin negotiating on 10 drugs in 2026 and increasing steadily to more than 80 by 2030. 

·        Delays negotiation of biologicals for two additional years if a biosimilar is likely to come to market.

Inflation Rebate

·        Requires drugmakers to pay a rebate to Medicare if they increase their drug prices faster than the rate of inflation, beginning in October 2022 for Part D drugs and January 2023 for Part B drugs.

Senior Out-of-Pocket Costs

·        Caps out-of-pocket spending at $2,000 annually on Medicare Part D prescription drug costs, beginning in 2025.

·        Redesigns the Medicare Part D program to option to break up that amount into more affordable monthly payments, for nearly 4,000 Hawaiʻi seniors. 

·        Eliminates the coinsurance requirement for Medicare beneficiaries who reach the catastrophic coverage threshold, including 5,000 Hawaiʻi seniors.

·        Imposes a $35 per month limit on the cost of insulin for over 10,000 Medicare beneficiaries in Hawai’i. 

·        Makes all vaccines free through Medicare Part D for 22,000 seniors in Hawai‘i, beginning in 2023.

ACA Premium Tax Credits

·        Lowers health care costs for nearly 19,000 Hawaiʻi residents and saves the average American family $2,400 a year in premiums by extending for three years the enhanced Affordable Care Act premium tax credits that Congress enacted last year as part of the American Rescue Plan Act, which increased the amount of financial help available to people already eligible to buy subsidized health plans in the Affordable Care Act Marketplaces and expanded subsidies to more middle-income people.

Environmental Conservation Investments

The Act will support environmental conservation efforts to address the impact of climate change in Hawai‘i, including:

Native Hawaiian Climate Resilience

·        Provides $25 million to the Office of Native Hawaiian Relations to support climate resilience and adaptation activities that serve the Native Hawaiian Community.

Grants to Conserve and Restore Coastal Habitats

·        Provides $2.6 billion to conserve, restore, and protect coastal and marine habitats, resources and fisheries to build climate resilience.

Reducing Emissions in our Communities

·        Provides $27 billion to help states, local governments, Tribes, and non-profits leverage private investments in projects that combat climate change and reduce emissions, focused on low-income and disadvantaged communities.

·        Provides $3 billion to decarbonize port infrastructure and reduce air pollution in surrounding communities.

Grants to Support Healthy Forests

·        Provides $5 billion in grants to support healthy, fire resilient forests, forest conservation and urban tree planting. 

Deficit Reduction

Finally, the measure places the country on a sounder fiscal footing by including the proposal Case and Representative Carolyn Bourdeaux (D-GA) led with colleagues in a July 2022 letter encouraging the House to use reconciliation for deficit reduction. “Focusing on deficit reduction is particularly important at this moment as American families are feeling the pain of inflation. Deficit reduction has the dual benefit of reducing current inflation as well as leaving future generations with the resources they need to address the challenges of the future.”

The Act’s provisions to advance fiscal responsibility include:

·        Reducing the federal deficit and debt by over $300 billion.

·        Reducing the cost of Medicare by allowing the government to negotiate the price of certain prescription drugs and applying the savings to deficit reduction.

·        Assuring that our largest multinational businesses, some of which are paying very low or no taxes, finally pay a minimum 15% tax rate.

A summary of the Inflation Reduction Act is attached.

Case returns to Hawai‘i Saturday, August 13th, to resume his August District Work Period.