Overview
As Democratic members from both sides of the spectrum continue to negotiate provisions of the Build Back Better Act, the package continues to undergo massive changes. The updated text of the plan is a bit more expensive than what had been proposed last week. Progressives made last-ditch efforts to re-include certain provisions they believe to be critical including funding for immigration, prescription drug pricing, labor and paid family leave, and climate change programs.
Senator Joe Manchin (D-WV) has said he would prefer to tackle paid family in bipartisan legislation outside the reconciliation process. Senator Kyrsten Sinema (D-AZ) has not said if she supports the new House plan. Senator Bernie Sanders (I-VT) still believes the package “needs to be improved.” Also, recently, the Joint Committee on Taxation released their score for the reconciliation package, suggesting the bill could raise over $1.5 trillion in revenue over 10 years. The plan accounts for an expected $813 billion to be raised from corporate and international tax reform, and $640 billion from tax increases for high-income earners.
What’s In
This week, House Democrats added back in four weeks of paid family and medical leave at a cost of $200 billion. The plan includes $400 billion to subsidize childcare for most families and set up universal pre-K, about $25 billion less than the initial plan. Also, the plan includes $35 billion to cover hearing care for older Americans who receive Medicare, starting in 2023.
The BBB includes higher caps on the SALT deductions, to allow a write-off up to $72,500 of what individuals pay in state and local taxes, with a possibility of a higher cap. This would be much higher than the current $10,000 limit Republicans set under their 2017 tax overhaul. Also, it includes a surtax on individual income above $10 million a year, a 15 percent minimum tax on corporations that report at least $1 billion in profits and a tax on stock buybacks.
The plan compromises to lower prescription drug costs, after an agreement that has the support of Sens. Sinema and Bob Menendez (D-NJ). Furthermore, the plan cut the on-job training programs from the $100 billion to $40 billion. The plan accounts for health coverage for an estimated 2 million to 4 million people stuck in the Medicaid “gap.” Health care subsidies that are set to expire in 2022 would run through 2025 under the package, continuing tax credits to help people cover the cost of their health insurance premiums. $10 billion in child nutrition assistance to offer free school meals to almost 9 million more students.
Despite the chance, they could be stripped in the Senate because of parliamentary rules, the House added back extensive immigration provisions. The House plan now includes five-year work permits that could go to millions of undocumented immigrants, plus temporary protections from deportation and access to certain benefits like the ability to travel. It would also ensure certain immigrants are eligible for driver’s licenses or state identification cards. The Department of Homeland Security would get $2.8 billion to help process immigration applications and reduce case processing backlogs.
The bill also includes $150 billion for housing programs, including for the construction and rehabilitation of up to 1 million new affordable rental and single-family homes and a $550 boost to the maximum amount a student can receive each year through the Pell grant program.
Lastly, the bill includes $555 billion for several programs Democrats predict will reduce greenhouse gas emissions by over one billion metric tons in 2030. That includes $320 billion to extend and expand renewable energy tax credits. Also, under the plan consumers would get up to $12,500 in credits for buying electric vehicles made in union shops.