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Democrats’ Reconciliation Package Passes House, Will Be Signed Into Law

August 16, 2022

House Democrats passed the Senate-approved $740 billion reconciliation package, the Inflation Reduction Act, by a 220-207 strictly partisan vote on Aug. 12. Ahead of the House vote, ABC issued a key vote against House passage, highlighting a critical change from the Senate process—a Democrat-approved amendment, offered by Sen. Mark Warner, D-Va., that would extend limits on pass-through business losses that can be used to reduce other taxable income. This $52 billion tax increase on pass-through businesses is particularly harmful while the economy is struggling and an increasing number of businesses are suffering losses.

ABC issued a release following the passage of the bill, which will be signed into law by President Biden. “Democratic lawmakers now own the consequences of sending this radical bill to the president’s desk, including potential economic fallout, additional inflation, more workforce shortages and high materials prices that we could see in the near future,” said Kristen Swearingen, ABC vice president of legislative & political affairs. “It imposes anti-growth tax policies and injects hundreds of billions of federal dollars into the economy at a time when we are facing record-high inflation.”

ABC also joined a coalition of small business organizations in opposing the legislation’s harmful tax provisions.

The bill also maintains an unprecedented expansion of Davis-Bacon and government-registered apprenticeship requirements, with the soon-to-be new law providing an increased tax credit for private employers that impose Davis-Bacon prevailing wage requirements and government-registered apprenticeship labor-hour quotas ranging from 10% to 15% of total labor hours, depending on the year of qualifying construction energy projects.

With the new bill being signed into law, Axios has published a timeline of when the IRA’s major provisions go into effect.

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