After months of negotiations, House Democrats passed a $1.75 trillion social policy and climate change bill Friday morning, advancing a key piece of President Joe Biden’s economic agenda.
It was passed with a majority vote of 220-213, most along party lines. One Democrat voted against. “We have a Build Back Better Bill that is historic, transformative and larger than anything we have ever done before,” House Speaker Nancy Pelosi said before the vote. “We are building back better. If you are a parent, senior, child, worker, American — this bill is for you.”
It was all but inevitable it would pass the House after the nonpartisan Congressional Budget Office released its final cost projection of the legislation on Thursday evening, estimating the sweeping spending package was unlikely to add a significant amount to the deficit after accounting for revenue that could be generated through Democrats’ plan to beef up IRS enforcement to go after wealthy tax evaders.
[time-brightcove not-tgx=”true”]
But that didn’t stop Republicans from attempting to delay the vote. Kevin McCarthy, the Minority Leader in the House was allowed to speak for as many minutes as he wanted until the vote could begin. It was a very scathing exchange. 8 Hours and 42 Minutes speech, McCarthy called the legislation “the single most reckless and irresponsible spending bill in our nation’s history.” He was booed by Democrats for his searing remarks, to which he replied: “That’s all right, I’ve got all night.”
This package, Build Back better, is now headed to the Senate. It will be considered by the Senate’s upper chamber. Continue to negotiate elements of the bill. The Senate can then pass it with a simple majority through a budget mechanism called reconciliation, but Democrats can’t afford any defections from their 50-member caucus. This means that moderate party members will be able to pass it. You can also like West Virginia Sen. Joe Manchin Arizona Sen. Kyrsten SinemaThe bill’s text can be changed with great power.
The Senate may amend the text to make it more appealing to them. If they do, the bill is sent back to the House to be reexamined. But Thursday’s House vote marked a major step forward for Biden’s signature social spending package.
Here are seven of the current bill’s most significant provisions.
Climate Change: $555 Billion
Climate-related provisions make up the largest portion of the bill. The White House hopes that this will enable Biden to achieve his target to reduce carbon emissions to half by 2030. The bulk of clean energy spending—$320 billion—comes in the form of tax credits for companies and consumers that install solar panels, improve the energy efficiency of buildings and purchase electric vehicles. Biden Administration claims that tax credits could lower costs for rooftop solar panels and electric cars by as much as 30%.
Additionally, the bill provides incentives to U.S. manufacturers of clean energy technology. The goal is for more domestic production of solar panels and wind turbines through grants, loans, and tax credits. Spending also goes towards the creation of a Civilian Climate Corps that would provide some 300,000 jobs to restore forests and wetlands and guard against the effects of rising temperatures—similar to the New Deal-era Civilian Conservation CorpsThe era was characterized by the promotion of the – which at that time was promoted as an economic development plan and an environmental plan – but it was criticized by labor organizations.
Pre-K universal coverage: $400 billion
The legislation directs money towards free universal preschool to all three- and four-year olds. This is the White House’s largest education program expansion since the establishment of public high schools.
Parents will have the option to send their child to any public school or program for childcare under the universal preschool plan. The effort is part of Biden’s larger plan to ease the financial burdens facing millions of American families, particularly low-income parents with children. According to the bill, families earning less than $300,000. per year will not pay more than 7% for child care.
200 billion to support child tax credits
This bill extends the child tax credit for pandemic-era children by one year. It provides $300 per month to parents of children under six years old and $250 per month for children six through 17. The bill extends the child tax credit to families that don’t earn enough to meet income tax liability.
200 billion per week of paid leave
The bill creates a permanent, comprehensive national paid leave program that gives employed workers—including those who are self-employed—four weeks of paid family and medical leave, which can be used for caregiving or personal illness. This provision will become law if it is passed. Workers who ask for paid time starting in 2024 would receive an amount equal to about 90%. The scale can be adjusted to accommodate higher income workers.
The United States is currently one of the few industrialized countries without a paid national leave program for parents. The Bureau of Labor Statistics reports that only 23% of U.S. civilian workers had paid leave, while 89% of them had unpaid leave.
The House passed the paid leave clause, but it will face a tough battle in the Senate with Sen. Manchin. He is a central centrist and said that he opposed the passage of a major policy such as this via a spending bill.
Spend $165 billion in healthcare
The White House hailed the bill as “the largest expansion of affordable healthcare in 10 years.” It reduces premiums for health insurance under the Affordable Care Act, and extends Medicare coverage to cover hearing loss. According to the White House, premiums for people who choose Affordable Care Act insurance will drop by $600 per year. That means that four-person families earning $80,000 each would be able to save $246 per monthly on their health insurance premiums.
Officials believe the savings will help those currently without insurance to get health insurance. Uninsured persons whose state has blocked them from Medicaid will be able to access health insurance coverage through the spending plan. They won’t have to pay any monthly premiums.
Also, the Build Back Better bill offers a compromise to take on Big Pharma regarding rising drug prices. It will limit how much pharmaceutical companies can raise their prices annually and establish an annual limit for out-of-pocket expenditures. However, this would only be done after these drugs have been available for at least ten years.
Drug companies can still charge a high price for new drugs. However, the prices will be controlled nine years later for common drugs and thirteen years later for those with more difficult drugs. Out-of-pocket costs for insulin—a protein hormone used to treat diabetes—would be capped at $35 for a 30-day supply, significantly lower than current costs, starting in 2023.
150 billion for affordable home care
This plan funds a Medicaid program to support in-home care. It helps reduce the backlog of those waiting for subsidies and increases wages for caregivers. According to the White House, thousands of Americans, both elderly and disabled, have not been able receive the care they require, with more than 800,000. on waiting lists for state Medicaid. The COVID-19 epidemic has aggravated many home care problems.
150 billion to fund affordable housing
The increased housing affordability funding will help build over 1 million single- and multifamily rental houses. This bill will help to alleviate cost pressures through rental and downpayment assistance via an expanded voucher program.
According to National Low Income Housing Coalition70% of extremely low-income families spend more than 50% on rent. Over 580,000 Americans are currently homeless.
From where is this all coming?
Democrats say the spending package will be paid for by tax Increasings on high earners and corporations, but the nonpartisan Congressional Budget Office found on Thursday that this will only raise around $1.5 trillion over 10 years—just short of the $1.75 trillion in 10-year spending.
The CBO findings are at odds with the White House’s pledge to fully pay for the Build Back Better bill, which is now expected to increaseOver the next 10 year, the deficit in the federal budget will increase by $160 million
The White House remains a formidable institution. Keep it up that the bill “will be more than fully paid for” since CBO budget estimates came in roughly $50 billion below their own cost estimates.
The largest source of revenue stems from a new 15% tax on large corporations with over $1 billion profits, as well as a 1% surcharge on companies that perform stock buybacks—part of the President’s ongoing effort to address how some companies paid zero dollars in taxes last year. Also, the spending bill will be paid for by a tax surcharge that applies to wealthy Americans. It applies a rate of 5% on income over $10 million and a surtax of 3% on income over $25 million.
Although the White House had initially planned to increase tax rates for wealthy people and corporations to generate additional funds, Sen. Sinema opposed that proposal and so did other moderate Democrats. The Biden Administration modified this plan. The bill also does not include a billionaire’s income tax, proposed by Oregon Sen. Ron Wyden, that would generate increased funding from the roughly 700 American billionaires, such as Amazon founder Jeff Bezos.
