The House on Friday narrowly passed the “Build Back Better” Act, which is aimed at strengthening the social safety net and boosting efforts to lessen the impact of climate change.
The measure is expected to face some tough opposition in the Senate, where even proponents say it’s likely to change substantially. In other words, negotiations are far from over, but the Senate’s expected to vote on the bill by year’s end.
“Democrats must also ensure that the entire plan adheres to the strict rules that govern the reconciliation process and force the removal of any provision that does not have a direct fiscal effect. Those rules have already forced the party to abandon a plan to provide a path to citizenship in the bill for undocumented immigrants, according to The New York Times,
Most American families are likely to be impacted by something contained within the roughly $2 trillion act. Among other measures, the version of the bill that the House passed includes:
- Universal preschool for 3- and 4-year olds. Advocates say expanding access to pre-K will help parents go back to work and boost productivity.
- Help with the cost of child care for more families, including some in the middle class. Costs would be capped at 7% for families earning up to 2.5 times their state’s median income.
- Four weeks of paid parental, sick or caregiver leave at 90% of wages up to certain limits. The self-employed, including gig workers, would have access. Sen. Joe Manchin, D-West Virginia, who will be a key vote to watch in the Senate, has made clear he opposes the paid leave provision.
- Money to bolster affordable housing options and provide rental assistance to low-income households.
- Coverage of hearing aids every five years for those on Medicare — a first for the program.
- Greater Pell Grant assistance for income-eligible college students.
- Limits on the cost of drugs, including a $35 cap on what insulin would cost those on Medicare. Other prescription costs — and price increases — could also be capped, with variations.
- Extending through 2022 the child tax credit now being paid monthly at a rate of $300 for children under 6 and $250 for older minor children.
- Financial help for Historically Black Colleges and Universities.
- Access to free school meals for 9 million more students.
- Support for in-home and community-based care, chipping away at waiting list for people to receive subsidized home care and boosting worker wages. According to Time, “thousands of seniors and disabled Americans have been unable to receive care they need, including more than 800,000 on state Medicaid waiting lists, the White House says.”
- Raising the limit on the state and local tax deduction to $80,000. That provision has sparked criticism as a gift for the wealthy, rather than something to help most working families.
The bill is expected to be paid for by raising taxes on high-income earners and corporations, beefed-up IRS enforcement to find tax cheats and prescription drug savings within Medicare.
NBC reported that the Congressional Budget Office “projected the legislation would add $160 billion to the long-term deficit. But moderate Democrats were placated by Treasury Department estimates that said added IRS enforcement would yield larger savings and fully pay for the spending package.”
An Oxford Economics analysis shows an expected increase in “real GDP growth” of 0.4 percentage points in 2022 and 0.5 percentage points in 2023. The group also projects 750,000 jobs will be added to the economy by the end of 2023.
The brief said the bill was not likely to “meaningfully add to current inflationary pressures,” and the costs would mostly be spread across 10 years and be offset by tax increases and spending cuts. And where it extends existing programs, it will keep many households from “hitting a fiscal cliff.”
The Washington Post said “the legislation now heads to the Senate where the odds are tougher, but not impossible, in the 50-50 chamber.” But the article noted that the policy debate Thursday within the House “devolved into a mutual show of utter disdain.”