Joe Biden signed Democrats’ healthcare, climate and tax package on Tuesday, putting the final seal of approval on a landmark bill that party leaders hope will boost their prospects in the midterm elections this November.

During a bill-signing ceremony at the White House, the US president celebrated the bill as a historic piece of legislation that would reduce healthcare costs for millions of Americans and help address the climate crisis.

“With this law, the American people won and the special interests lost,” Biden said. “Today offers further proof that the soul of America is vibrant, the future of America is bright and the promise of America is real and just beginning.”

The signing came four days after the House passed the bill, formally known as the Inflation Reduction Act, in a party-line vote of 220 to 207. The bill had previously passed the Senate in a party-line vote of 51 to 50, with Vice-President Kamala Harris breaking the tie in the evenly divided chamber.

The passage of the Inflation Reduction Act capped off more than a year of negotiations among Democrats, after the bill’s predecessor, the Build Back Better Act, stalled in the Senate due to opposition from one of the party’s centrist members, Joe Manchin.

The Senate majority leader, Chuck Schumer, spent months quietly negotiating with Manchin over a more narrow spending package, resulting in the Inflation Reduction Act.

While the Build Back Better Act was much larger in scope, Democrats have still celebrated the climate and healthcare provisions included in their compromise bill.

The law directs $369bn toward investing in renewable energy and reducing America’s planet-heating emissions, marking the country’s most significant effort yet to combat the climate crisis. Experts have estimated the bill could reduce US emissions by about 40% by 2030, compared with 2005 levels, close to Biden’s goal of cutting emissions in half by the end of the decade.

“This bill is the biggest step forward on climate ever,” Biden said Tuesday. “It’s going to allow us to boldly take additional steps toward meeting all of my climate goals, the ones we set out when we ran.”

In terms of healthcare provisions, the bill will allow Medicare to start negotiating the price of certain expensive drugs and will cap out-of-pocket prescription drug costs at $2,000 a year for those in the government insurance program for seniors and some with disability status. It will also alleviate premium hikes for those who receive insurance through the Affordable Care Act marketplace, the federal program informally known as Obamacare.

The cost of the legislation is covered through a series of tax changes, which are expected to bring in hundreds of billions of dollars of revenue for the US government. Those changes include a new corporate minimum tax, a 1% excise tax on stock buybacks and enhanced enforcement from the Internal Revenue Service targeting high-income households.

After the House passage of the bill last Friday, Democratic party leaders took to the airwaves to tout the benefits of the legislation, promising that it would help ease the financial burden for Americans struggling under the weight of record-high inflation.

“It’s making sure that billionaires in corporate America are paying their fair share, making sure that the tax code is a little bit more fair,” the White House press secretary, Karine Jean-Pierre, told ABC News on Sunday. “When you put it in its totality, you will see that it will lower the deficit, which will help fight inflation.”

But Republicans have dismissed Democrats’ arguments that the bill will help ease inflation, accusing them of ramming through a reckless spending spree that will do little to aid working Americans.

“[Democrats’] response to the runaway inflation they’ve created is a bill that experts say will not meaningfully cut inflation at all,” the Senate Republican leader, Mitch McConnell, said earlier this month. “Democrats have proven over and over they simply do not care about middle-class families’ priorities.”

According to a report issued by Moody’s Analytics, Democrats’ spending package will “modestly reduce inflation over the 10-year budget horizon”. But regardless of the bill’s impact, there have been some signs that inflation may be cooling off.

US inflation hit an annual rate of 8.5% last month, which represented a slight decrease from the 40-year high of 9.1% recorded in June. If inflation does indeed start to taper off and Democrats can sell the passage of their spending package on the campaign trail, it could help them prevent widespread losses in the midterm elections this November.

“I’ve been prepared to win the midterms all along. It depends on getting out the vote. This probably could be helpful,” the House speaker, Nancy Pelosi, said of the bill’s passage last week. “But I do know it will be helpful to America’s working families, and that’s our purpose.”