A little background first: Since not a single Republican would dream of voting for any part of Biden's agenda other than the stuff that became the infrastructure bill, virtually everything else went into Build Back Better. To avoid a filibuster, Democrats can pass it through the budget reconciliation process with just their 50 votes in the Senate, with Vice President Kamala Harris voting as a tiebreaker. The initial wish list of social safety net and climate programs totaled about $6 trillion in spending over 10 years; that was eventually trimmed down to a $3.5 trillion proposal introduced in July.
Problem is, to pass any bill by reconciliation, you need all 50 Democrats in the Senate, and two, Joe Manchin of West Virginia and Kyrsten Sinema of Arizona, rejected spending that much, because they just did is why. After weeks of negotiations this fall, the White House finally announced a $1.75 trillion framework for Build Back Better that met most of the demands from Manchin and Sinema, who both remained noncommittal, because see above. Even so, it's a damn good plan!
We still don't know whether Manchin and Sinema will vote for it, but happily, today, we don't have to think about the next few weeks; we only have to tell you what's in the bill now. We'll be using as a guide that White House framework, plus other media reports and a brief, very clear guide from the Committee for a Responsible Budget, and of course some of the nine zillion pieces we've already written about this sucker as it's made its way through the legislative sausage factory.
Climate ($555 Billion)
The original plan's biggest lever to move America toward renewable energy, the Clean Electricity Performance Program, was dropped because of opposition from Joe Manchin, who himself is a rich man thanks to coal. Even so, BBB includes the largest-ever package of spending aimed at addressing the climate emergency, some $555 billion in investments. That's on top of the significant climate-related spending in the infrastructure bill, too. BBB's climate provisions include:
- Renewable energy tax credits, to the tune of about $320 billion. These are designed to help develop wind, solar, and other renewable energy projects at the commercial level, and will also boost adoption of clean home energy, power storage technology, clean energy manufacturing, and construction of the transmission lines that'll be needed to green the grid. And remember, that's on top of the infrastructure bill's direct investments in upgrading the grid. I tell you guys, Yr Dok Zoom is fast becoming a grid nerd.
- $110 billion to incentivize manufacturing clean energy tech in the US, like solar panels, EV parts, and other components in the green tech supply chain.
- Up to $105 billion to assist communities in improving climate resilience and adopting climate-friendly land use practices in forests, wetlands and agriculture.
- Expansion of existing rebates and tax credits for homeowners who upgrade home energy efficiency and install renewable power. Homeowners could cut energy bills by hundreds of dollars annually, and reduce the cost of installing rooftop solar by around 30 percent.
- $8.1 billion to stand up a Civilian Climate Corps, modeled on the beloved New Deal Civilian Conservation Corps, to provide 300,000 jobs doing environmental cleanup and building up community resilience; also to build green job skills for youth from disadvantaged communities.
- To complement the BIF's funding for a national network of EV recharging stations, Build Back Better has a bunch of tax credits to get more EVs on the roads. The refundable credits could total up to $12,500 for a new electric vehicle, depending on the characteristics of the EV purchased.
- Base tax credit of $4,000, same as now.
- $3,500 more if the vehicle has a battery pack including at least 40 kilowatt-hours of charge
- Plug-in hybrids will only qualify for this bit if their gas tank is smaller than 2.5 gallons, to run a generator and recharge the battery to deliver a couple dozen "range-extender" miles.
- $500 more more if the battery pack is made in the USA
- An extra $4,500 if the vehicle is made primarily in the USA and by a union workforce
- (Updated:) Purchasers of used EVs can get a stand-alone $2,000 tax credit for vehicles over two years old, plus another $2,000 if battery pack capacity is at least 40 kilowatt-hours.
At the moment, the only vehicles that would qualify for the full credit are Chevrolet's Bolt EV and Bolt EUV; not even Ford's Mustang Mach-E would qualify, since it's built in Mexico. Once Ford's big new EV megaplant in Tennessee starts operating in 2025, its electric pickup trucks and other vehicles will qualify. The CEO of Volkswagen Group of America, which doesn't have unionized labor at its plant in Chattanooga, Tennessee, is very very hurt that the credit isn't available to VWs assembled here.
Hey, we can think of a way Volkswagen could change that. Talk about an incentive!
Healthcare ($335 Billion)
- $30 billion to expand Medicare to cover hearing aids and other hearing services. It's a start, and next we need to do vision and dental! (OK, next we need to keep the House and Senate in 2022.)
- $125 billion to continue expanded Obamacare premium subsidies from the American Rescue Plan, and to eliminate the Medicaid gap in states that didn't expand Medicaid under the ACA. That's huge! The plan would provide tax credits to cover the full premium cost for an Obamacare insurance plan. Enrollees would have no deductibles and minimal co-pays, similar to those in Medicaid.
- $150 billion in expanded Medicaid funding for home- and community-based services, with provisions to improve caregiver job benefits. This is a key plank of Biden's plan to boost the "care economy."
- $30 billion in Investments in the healthcare workforce: Funding to modernize public health departments and train health care workers.
Family Benefits ($585 Billion)
- $195 billion for a new Paid Family Leave program; this is the one we've had some qualms about because it's a complicated dog's breakfast that would be run through private insurance. It's also a late add-back-in, and may or may not stay in the final bill.
- 390 billion for both Universal Pre-K and a new affordable child care program. The funding is for six years only, with the hope that people will like the programs and demand they be reauthorized by a future Congress.
- Childcare: Families of four earning under $300,000 a year will get subsidized childcare, so they'll pay no more than seven percent of their income on childcare for kids under six. Parents who are unemployed or in education/job training programs will qualify for childcare on a sliding scale, capped at seven percent of income, too. The plan will also improve job standards for childcare workers, because union jobs, goddamn right.
- Pre-Kindergarten: Available to all three- and four-year-olds whose parents want it. It'll increase the availability of Pre-Kindergarten classes for as many as six million kids, and make it more affordable and improve services for millions more families. This is freakin' big.
Tax Credits And Cuts For The People ($210 Billion)
- $130 billion to continue the Rescue Act's expanded Child Tax Credit for one year, with the same eligibility levels as in the original. No damn work requirements, no reduced eligibility to hurt it. In addition, it'll be made permanently refundable, which means the poorest Americans won't have to meet an income threshold to get the full tax credit. That part is budgeted for another $30 billion, starting in 2023 and beyond.
- $15 billion for an expanded Earned Income Tax Credit (for one year as well), for around 17 million low-income workers who don't have kids, ending what had been a de facto penalty on low-income folks who didn't have kids. This will get people out of poverty.
- $10 billion in other, smaller individual tax changes.
Also Too; We Are Tired Of Categories ($600-$700 Billion)
- Housing ($170 billion): Low-income housing assistance, rental assistance, down payment help, and construction/refurbishing of affordable housing. On top of that, there's new investments in lead paint removal, and incentives to promote state and local zoning reforms to encourage more duplexes and multi-family housing, just to freak out the NIMBYs.
- Education and workforce spending ($40 billion): Since free community college had to be cut, there will at least be money for:
- Increasing Pell Grants by $550
- Aid to Historically Black Colleges and Universities, Tribal colleges and universities, and other higher ed institutions that primarily serve members of minority groups
- Expanded availability of free and reduced-cost school meals, and year-round free/reduced-price meals for school-aid kids so nobody goes hungry in the summer
- $285 billion to increase the State and Local Tax deduction to $80,000 through 2030, after which it would return to $10,000, the level set in the 2017 tax law.
- $100 billion for other investments and spending that will improve people's lives but is so granular that it illustrates the old joke "A billion here, a billion there, and before long you're talking about real money." When BBB passes, we'll plan to come back and fill this out more.
Also in this catch-all spending box would be a possible
$100 billion allocation — which seems extraordinarily high! — for immigration reform. It would allow undocumented immigrants to apply for five-year work permits that would prevent them from being deported; this would only be included if allowed by the Senate parliamentarian.
Taxes and Other Nibblings Upon The Rich
For the revenue side, we're just gonna copy-paste from the Committee for a Responsible Budget and call it done.
- 15 percent domestic minimum tax on large corporations ($320 billion)
- 15 percent global minimum tax & reform international taxation ($280 billion)
- One percent surcharge on corporate stock buybacks ($125 billion)
- Other corporate tax reforms ($105 billion)
- Increased individual taxes on high earners, total ($640 billion)
- Increased IRS funding to collect unpaid taxes already owed ($170 billion — well less than the Biden Administration's $400 billion projection)
- Restored Superfund taxes for oil companies ($25 billion)
- Increased nicotine taxes ($10 billion)
- Reform Trump-era drug rebate rules, cap drug price increases, and allow negotiations of drug prices in Medicare Part D ($250 billion)
- Other Tax Shit, Damned If I Understand What It Even Is, I'm A Humanities Major ($310 billion)
Now, with the new tax and spending provisions added in, like the family leave, immigration, and the state and local tax deduction,
CFRB estimates the total BBB cost at $2.4 trillion, with total revenues projected at $2.2 trillion over 10 years, meaning the BBB bill might add $200 billion to the deficit, or $20 billion in deficit spending annually.
But CFRB is a nonprofit public policy group; the real test will be the Congressional Budget Office score of the bill, which moderates in the House are waiting to see before they vote on final passage.
Their agreement with the administration is that any significant differences between the administration's estimates and the CBO score would need to be reconciled by cuts or new revenue before it's passed. So wow, dear Wonkers, now you have the most comprehensive listicle EVAR of what's in BBB that I've seen, and I need lunch, the end.
[White House / Committee for a Responsible Budget / CNET / Bloomberg / Center on Budget and Policy Priorities / Image: Chineseposters.net]
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