The U.S. House passed the Inflation Reduction Act on Friday, which includes $370 billion for reducing emissions and promoting green technology.
After earlier Senate passage, the measure heads to a signature by President Biden in coming days. The vote was 220-207, with every Democrat winning over unanimous Republican opposition.
It will be the largest investment ever in addressing climate change, a key pledge of the Biden administration. Another key feature is a cap on drug costs for seniors.
The bill sets a 15% minimum tax on large corporations, being advertised as a means of reducing the federal deficit by $300 billion, although estimates on the reduction have varied widely.
The climate initiatives include $161 billion in new tax credits to create incentives for companies to provide clean energy and $80 billion to urge consumers to buy new or used electric vehicles.
The Senate passed the measure 51-50 five days earlier along party lines with Vice President Kamala Harris casting the winning vote.
Tax credits include $30 billion to spur production of solar panels, wind turbines, batteries, and processing of critical minerals. Another $10 billion in credits would go for factories to manufacture electric vehicles and solar panels. Another $500 million through the Defense Production Act would go for heat pumps and critical minerals processing.
The bill extends the $7,500 consumer income tax credit for the purchase of a new electric vehicle. There is also a new $4,000 credit for buying a used EV. Eligible new cars are capped at $55,000. There are also requirements for domestic manufacturing of EVs and their battery components to qualify for the extended credit. The law requires 40% of battery components be sourced from factories in the U.S. or free-trade agreement partners. Chinese components and minerals would be phased out starting in 2024.