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US enacts $437 bil. law, touting largest climate change investment

U.S. President Joe Biden signs the Democrats' landmark climate change and health care bill in the State Dining Room of the White House in Washington on Aug. 16, 2022. (AP Photo/Susan Walsh)

WASHINGTON (Kyodo) -- President Joe Biden on Tuesday signed into law a $437 billion investment bill that includes what he calls the largest U.S. spending ever aimed at combating climate change, while raising taxes on large companies.

    The law is Biden's latest legislative win ahead of the November midterm elections, in which control of Congress will be at stake. The administration has touted the Inflation Reduction Act as including measures to address high prices, such as by lowering energy bills and health care costs on prescription drugs.

    But uncertainties remain as to whether the law will immediately bring down the decades-high inflation, with the Congressional Budget Office having estimated that the enactment of the bill would only have a "negligible effect" on inflation this year.

    The legislation, which pledges around $369 billion in investment for climate change and energy security, provides incentives such as tax credits to encourage purchases of electric vehicles and installation of rooftop solar panels.

    The Democrats have explained that such "historic" climate investment will reduce the country's carbon dioxide emissions by roughly 40 percent by 2030.

    "This bill is the biggest step forward on climate ever," said Biden, who has made tackling climate change a priority since taking office in January last year.

    The legislation also imposes a 15 percent minimum tax on large corporations.

    According to the Democrats, the law is expected to reduce the deficit by hundreds of billions of dollars over the next decade such as through tax hikes, which are likely to drive down demand in the economy and contribute to price declines.

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