WASHINGTON — President Biden on Tuesday signed a long-awaited bill meant to reduce health costs, reduce greenhouse gas emissions and raise taxes on corporations and wealthy investors, capping more than a year of on-again, off-again negotiations and cementing his early economic legacy.
“This bill is the biggest step forward on climate ever,” Mr. Biden said, after drawing a standing ovation from a White House crowd filled largely with aides and allies.
The bill, which Democrats named the Inflation Reduction Act, invests $370 billion in spending and tax credits in low-emission forms of energy to fight climate change. It extends federal health-insurance subsidies, allows the government to negotiate prescription drug prices for seniors on Medicare and is expected to reduce the federal budget deficit by about $300 billion over 10 years.
The legislation would increase taxes by about $300 billion, largely by imposing new levies on big corporations. The law includes a new tax on certain corporate stock repurchases and a minimum tax on large firms that use deductions and other methods to reduce their tax bills. It also bolsters funding for the Internal Revenue Service in an effort to crack down on tax evasion and collect potentially hundreds of billions of dollars that are currently owed to the government but not paid by high earners and corporations.
It passed the House and Senate earlier this month entirely along party lines, as Democrats employed a legislative process to bypass a Republican filibuster.
The bill represents America’s largest investment to fight climate change. It is aimed at helping the United States cut greenhouse gas emissions by an estimated 40 percent below 2005 levels by 2030. That would put the country within striking distance of Mr. Biden’s goal of cutting emissions at least 50 percent over that time period.
For months, it appeared Mr. Biden might not have any such bill to sign. Despite winning bipartisan victories on funding for infrastructure — including roads, bridges, water systems and high-speed internet — and an industrial policy bill meant to counter China, the president had been unable to bring his party together on a final bill to carry as much as possible of the rest of his economic agenda using only Democratic votes.
But a last-hour compromise struck between Senator Chuck Schumer of New York, a Democrat and the majority leader, and a holdout centrist Democrat, Senator Joe Manchin III of West Virginia, paved the way for the agreement to go forward. Mr. Manchin, Mr. Schumer and other lawmakers joined Mr. Biden at the signing on Tuesday.
“For anyone who thought Washington was broken and couldn’t do big things, Democrats have shown real change is possible,” Mr. Schumer said, before Mr. Biden’s remarks.
Mr. Biden nodded to Mr. Manchin in his remarks. “Joe,” he said, “I never had a doubt.”
Emily Cochrane, Michael D. Shear and Lisa Friedman contributed reporting.