Biden signs the Inflation Reduction Act, a toned down version of his Build Back Better plan

US President Joe Biden on Tuesday signed theInflation Reduction Act, a much toned-down version of his election manifesto promise of the Build Back Better plan. Biden signed the bill withWest Virginia Democrat senator Joe Manchin III by his side, whose decisive vote led to the passing of the legislation.

"The Inflation Reduction Act will help save money on prescription drugs, cut health care premiums, cut energy costs, take aggressive action on climate, and make large corporations pay their fair share in taxes. We got it done," the US president tweeted.

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“I’m keeping my campaign commitment. No one...let me emphasize this, no one earning less than $400,000 a year will pay a penny more federal tax,” said Biden after signing the bill and handing the pen to Manchin.

Biden also took the opportunity to target the GOP lawmakers who were not in favour of the bill.

"In this historic moment, Democrats sided with the American people and every single Republican sided with the special interests.Every single Republican in Congress voted against this bill." said the US President.

Timeline and significance of the Act

As reported by WION extensively, the Inflation reduction Act is being touted as the biggest financial package when it comes to tackling climate change, lowering prescription drug prices and high inflation.

By hiking the corporate minimum tax on big companies to 15 per cent, the new tax policyis expected to generate$739 billion by the end of the decade. Moreover,$369 billion will be spent on climate and energy reforms while $64 billion will be used to beef up the Affordable Care Act.

However, for a long time, the bill and its previous iterations lingered in nothingness as theWest Virginia senator continued to harangue the Biden administration.With the Democrats having a razor-thin majority in the Senate, Manchin's vote became all the more necessary.

Manchin had applied brakes on the new tax and healthcare reformsby stating that he will wait for the July inflation numbers to come up first.

Such was Biden's helplessness that he was mulling bringing a climate emergency plan. However, the President backtracked at the last minute and unveiled a $2.3 billionplan to fight climate change.

However, after Manchin received the nod to several of his demands, including a gas pipeline in his home state of West Virginia, he agreed to the passing of the law.

Read More:Democrat Senator Joe Manchin takes a volta-face; supports Biden's 'Build Back Better' plan

Ahead of the November midterm election, Biden is looking to use the passing of the act to woo the voters. The Democrats have not fared well in approval ratings and Biden is staring at an uphill task, in the backdrop of historic inflation rates and a contracting economy.

(With inputs from agencies)

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