Cheers erupted as the Democratic-majority House of Representatives passed the Inflation Reduction Act on Friday after hours of heated partisan debate.
With 220 yeas and 207 nays, the bill now goes to President Joe Biden's desk to be signed into law.
The spending bill is aimed at tackling climate change, the high cost of prescription drugs and lowering Washington's deficit by about $300 billion.
It includes measures such as reducing US carbon emissions by about 40 per cent by 2030, capping insulin costs for qualifying Americans at $35 a month and instituting a 15 per cent corporate minimum tax on businesses making more than $1bn a year.
This is the latest in a series of Democratic-spearheaded bills to go to Mr Biden's desk, including the Chips and Science Act and the Pact Act on veterans' health care.
"Today is a day of celebration. A day we take another giant step in our momentous agenda," said House Speaker Nancy Pelosi as she celebrated on the floor.
In its analysis of the bill, the Congressional Budget Office estimated it would result in a net deficit decrease of $102bn between 2022 and 2031.
“It is a landmark piece of legislation. It is something that a lot of people said could not be done. But we are doing it,” House Majority Whip James Clyburn told reporters in a pre-vote press conference on Friday.
The partisan state of US politics was on full display during Friday's debate on the House floor.
Republican arguments largely centred on false claims that the bill's multibillion-dollar strengthening of the Internal Revenue Service would lead to increased tax audits for ordinary Americans — including an “army of 87,000 IRS agents”, which the US Treasury Department debunked.
Democrats called the claims “misinformation” and “fearmongering”, and stressed that the billions of dollars in new funds for the agency is for increasing agency responsiveness and tackling high-income abuse.
“My Republican friends do not want to give the IRS the ability to go after wealthy tax cheats,” said Democrat James McGovern from Massachusetts.
“But our constituents have to pay their fair share, so these rich people ought to be able to pay their fair share as well.”
Theatre of the absurd
Republican Lauren Boebert claimed that the bill would lead to the IRS committing “armed robbery” against Americans, which elicited groans from her colleagues on the left.
Meanwhile, many House Republicans refuse to refer to the bill by its official name.
“Joe Biden and House Democrats’ Inflation Expansion Act does nothing to address the skyrocketing inflation Americans face daily,” read a statement posted on the Republican Party's website after the bill passed the Senate.
“The best and quickest way to address America’s inflation crisis is to rein in out-of-control government spending.”
The Inflation Reduction Act's journey to the White House has been tumultuous, with Senate Democrats initially squabbling among themselves over the original bill's proposals.
Their objections pushed Democrats to scale back on some of the bill's more ambitious plans, including free pre-kindergarten and paid family and medical leave for workers nationwide — and offered new support for fossil fuels.
The Senate ultimately passed the final bill in a 50-50 weekend vote along party lines. Vice President Kamala Harris cast the tiebreaking vote.
Democratic Majority Leader Steny Hoyer expressed confidence at a Friday press conference that the Inflation Reduction Act would boost his party's prospects in coming midterm elections.
“The American people will have a clear message,” Mr Hoyer said. “This is what Democrats are going to do for the people putting people over politics and this is what the Republicans are not doing for the people and putting politics above the people.”
But Republican Minority Leader Kevin McCarthy gave a warning that hinted at a different outcome of the coming election cycle.
“I ask my colleagues to remember this day,” he said during his floor speech. “Remember this day because it will be the last time the House will operate so recklessly … a new day is coming, with a new plan to put America back on track.”