US President Joe Biden has signed a $700bn (£579bn) bill that aims to fight climate change and healthcare costs while raising taxes mainly on the rich.

The act includes measures to make good on decades of congressional promises to curb the price of prescription drugs.

The final version is more modest in scope than the $3.5tn package first envisaged by Democrats.

A flagship of Mr Biden’s agenda, the bill could provide a boost ahead of the mid-term elections.

The law, dubbed the Inflation Reduction Act, was touted by the White House as the biggest commitment to mitigating climate change in US history, as well as targeting long sought changes in the way medicines are priced, while adding fairness to the tax system, with a minimum 15 percent tax for corporations.

“A nation can be transformed. That’s what’s happening now,” Biden said in a White House speech likely to form the basis of his campaign ahead of the November polls, where Republicans have hoped to end Democrats’ narrow control of Congress.

“It’s about tomorrow,” Biden said. “It’s about delivering progress and prosperity to American families. It’s about showing America and the American people that democracy still works in America.”

While the sprawling bill is a fraction of the gargantuan package Biden originally tried and failed to get through Congress, the fact he was able to sign even the scaled-back version marked a political resurrection — a success Democrats now hope might fuel a comeback at the ballot box later this year.

The act will allocate $386 billion for energy and climate change programmes over the decade, the majority of which are designed to hasten the switch to renewable energy sources. Additionally, it will increase coverage under government health care programmes and extend health insurance subsidies.

The legislation will allocate funds, tax breaks, and loans to support solar-panel technologies, consumer initiatives to increase home energy efficiency, emission-reducing machinery for coal- and gas-powered power plants, and air pollution controls for farms, ports, and low-income regions.

While the act includes several of Biden’s pre-poll promises, the legislation has been significantly slimmed down from the original USD 3.5 trillion package.

On Tuesday, Biden also criticised the congressional Republicans for not voting in favour of the bill, saying that “every single Republican in Congress voted against lowering prescription drug prices, against lowering health care costs, against the fair tax system. Every single Republican – every single one – voted against tackling the climate crisis, against lowering our energy costs, against creating good paying jobs.”

Democrats had been eager to push through their domestic policy ambitions before the mid-term elections, but Republicans strongly opposed the bill, arguing that tax increases would impose burdens on US businesses and workers and hurt the economy.

“Democrats robbed Americans last year by spending our economy into record inflation. This year, their solution is to do it a second time,” Senate Minority Leader Mitch McConnell said in a tweet.

“The partisan bill President Biden signed into law today means higher taxes, higher energy bills, and aggressive IRS audits,” said McConnell, referring to the Internal Revenue Service, which administers and enforces US federal tax laws. 

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