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A quick synopsis provides everything you need to know about the Chips and Science Act and the Inflation Reduction Act, the first steps in fixing some very real problems for the US.

U.S. Senate Chamber

The oddly named Chips and Science Act and the Inflation Reduction Act (IRA) are both positioned to fix some real problems for the USA. Here is everything you need to know about the two acts.

The Chips and Science Act

Signed into law: August 9, 2022

Synopsis: Afte realizing severe supply chain disruptions during the COVID pandemic, the US realized the outsourcing of about half of critical computer and electronics components to China and Taiwan was dangerous to the nation’s stability. In response, the Chips and Science Act created $50 billion in funding to spur semiconductor manufacturing, research, and development. The intent is to build in some more resiliency into the supply chain and help shift some of the production back to the US and in particular, away from China.

Included in the bill is more than $200 billion in funding of research and education programs with no immediate connection to the semiconductor industry. It is hoped research funded from the act will focus on fixes to the climate change dilemma.

The Inflation Reduction Act (IRA)

Signed into law: Pending, has passed Senate

Synopsis: Includes $369 billion in funding for climate programs including $60 billion in tax incentives to companies to increase the production of wind, solar, and battery technologies. The bill includes a $7,500 tax credit toward purchasing a new electric vehicle or $4,000 toward purchase of a used one. The intent of IRA would reduce greenhouse gas emissions by 31 to 44 percent from 2005 levels by 2030. This is a major step in the Biden administration goal of reducing emissions by 50 percent from 2005 levels by 2030.

The bill also introduces minor reforms intent on making prescription drugs more affordable and mostly impacts those who use Medicare with caps on some of the more expensive drugs. There is also a three-year extension on healthcare subsidies in the Affordable Care Act.

The bill also limits the amount of methane a US company can emit and creates a 15% minimum tax for corporations making more than $1 billion in income. Still, the bill is a watered-down version of the bill Democrats hoped to pass. But in a rare act of “working together”, the bill was adjusted to meet the demands of Republicans.

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