Will Build Back Better Become Law?

The Build Back Better Act was a bill introduced in the 117th US Congress to fulfill aspects of President Joe Biden's Build Back Better Plan. The bill was passed by the House of Representatives on November 19, 2021, but it failed to gain the support of Democratic senators Joe Manchin and Kyrsten Sinema. After it ultimately failed to match Manchin's envisioned cost, he rejected the bill, dooming its passage.

The Build Back Better Act's impact on the middle class

The Build Back Better Act was introduced in the 117th Congress as a $3.5 trillion reconciliation package to fulfill aspects of President Joe Biden's Build Back Better Plan. The bill was passed by the House of Representatives on November 19, 2021, but failed to gain the support of Democratic Senators Joe Manchin and Kyrsten Sinema.

The Build Back Better Act is intended to be President Joe Biden's Plan to Rebuild the Middle Class. The Act is divided into three parts: the American Rescue Plan, the American Jobs Plan, and the American Families Plan.

The American Rescue Plan was passed as the $1.9 trillion American Rescue Plan Act of 2021, and was signed into law in March 2021. The American Jobs Plan was signed into law in November 2021, and the American Families Plan was included in the Build Back Better Act.

The Build Back Better Act is expected to have a significant impact on the middle class. Here are some key ways in which the Act will affect the middle class:

• The Act will provide universal and free preschool for all 3 and 4-year-olds, saving parents around $8,600 per year.
• It will ensure that middle-class families pay no more than 7% of their income on childcare, saving most American families more than half of their spending on childcare.
• The Act will provide tax cuts of up to $3,600 per child by extending the American Rescue Plan's expanded Child Tax Credit.
• It will reduce prescription drug costs by allowing Medicare to negotiate drug prices and imposing a tax penalty on drug companies that increase their prices faster than inflation.
• The Act will lower insulin prices, ensuring that Americans with diabetes pay no more than $35 per month for insulin.
• It will reduce premiums for more than 9 million Americans who buy insurance through the Affordable Care Act Marketplace.
• The Act will deliver health care coverage to up to 4 million uninsured people who have been locked out of Medicaid.
• It will expand Medicare to cover hearing benefits, ensuring that older Americans can access affordable hearing care.
• The Act will make the largest and most comprehensive investment in affordable housing in history, enabling the construction, rehabilitation, and improvement of more than 1 million affordable homes.
• It will extend the expanded Earned Income Tax Credit for around 17 million low-wage workers, helping to pull them out of poverty.
• The Act will expand access to affordable, high-quality education beyond high school, increasing the maximum Pell Grant and making historic investments in Historically Black Colleges and Universities, Tribal Colleges and Universities, and minority-serving institutions.
• It will promote nutrition security by expanding free school meals and providing benefits to families to purchase food during the summer.
• The Act will make a transformative investment in Rural America through a new Rural Partnership Program, providing flexible funding for locally-led projects.
• It will also make a historic investment in maternal health and establish a new community violence intervention initiative.
• Additionally, the Act will include a $100 billion investment in immigration reform, providing relief to millions and making the asylum system more efficient and humane.

While the Build Back Better Act is expected to have a positive impact on the middle class, some have raised concerns about its potential impact on taxes. The Congressional Budget Office estimates that if all the bill's policies were made permanent, it could add $3 trillion to the national debt over the next 10 years. This has led to discussions about potential tax increases to offset the cost of the bill, which could include broad-based tax increases on the middle class. However, President Biden and congressional Democrats have committed to fully offsetting the budgetary cost without raising taxes on those making under $400,000 per year.

The Act's investment in children and caregiving

The Build Back Better Act, introduced in the 117th Congress, was a bill that aimed to fulfill aspects of President Joe Biden's Build Back Better Plan. The Act included provisions for a transformative investment in children and caregiving, which were as follows:

Universal Preschool

The Act would provide universal and free preschool for all 3 and 4-year-olds, expanding access to more than 6 million children per year. This would be a long-term program, with funding for six years. This is the largest expansion of universal and free education since public high schools were established 100 years ago.

Affordable Child Care

The Act would limit child care costs for families to no more than 7% of income, for families earning up to 250% of the state median income. It would enable states to expand access to about 20 million children. This is also a long-term program, with funding for six years.

Affordable Care for Older Americans and People with Disabilities

The Act would strengthen an existing program through Medicaid, ending the existing backlog, and improving working conditions for home care workers. This would provide affordable, high-quality care for hundreds of thousands of older Americans and people with disabilities in their homes and communities.

Expanded Child Tax Credit

The Act would extend the current expanded Child Tax Credit for more than 35 million American households, with monthly payments for households earning up to $150,000 per year. It would also make the refundability of the Child Tax Credit permanent. This would provide tax cuts of up to $3,600 (or $300 per month) per child for nearly 90% of American children for 2022.

Affordable Care Act Premium Tax Credits

The Act would extend the expanded Affordable Care Act premium tax credits through 2025. This would provide health insurance to more than 3 million people who would otherwise be uninsured. It would also make these tax credits available through 2025 to 4 million uninsured people in uncovered states.

Expanded Medicare Coverage

The Act would establish a hearing benefit in Medicare, allowing older Americans to access affordable hearing coverage.

Earned Income Tax Credit for Low-Wage Workers

The Act would extend the current expanded Earned Income Tax Credit for childless workers for one year. This would benefit around 17 million low-wage workers, many of whom are essential workers.

Equity and Other Investments

The Act would also include other targeted investments, including maternal health, community violence initiatives, Native communities, disadvantaged farmers, nutrition, pandemic preparedness, and supply chain resilience.

The Act's impact on climate change

The Build Back Better Act is a bill introduced in the 117th Congress to fulfill aspects of President Joe Biden's Build Back Better Plan. The bill includes provisions related to climate change and social policy.

The Act is the largest effort to combat climate change in American history, investing $555 billion over 10 years in clean energy and climate investments. It is designed to set the United States on course to meet its climate goals and will create millions of good-paying jobs.

The Act delivers substantial consumer rebates and tax credits to reduce costs for middle-class families shifting to clean energy and electrification. The consumer rebates and credits included in the Act will save the average American family hundreds of dollars per year in energy costs. These measures include the enhancement and expansion of existing home energy and efficiency tax credits, as well as the creation of a new, electrification-focused rebate program. The Act will cut the cost of installing rooftop solar for a home by around 30%, shortening the payback period by around 5 years. The electric vehicle tax credit will lower the cost of an electric vehicle made in America with American materials and union labor by $12,500 for a middle-class family. In addition, the Act will help rural communities tap into the clean energy opportunity through targeted grants and loans through the Department of Agriculture.

The Act ensures that clean energy technology – from wind turbine blades to solar panels to electric cars – will be built in the United States, creating hundreds of thousands of good jobs. The Act will target incentives to grow domestic supply chains in solar, wind, and other critical industries in communities on the front lines of the energy transition. In addition, the Act will boost the competitiveness of existing industries, like steel, cement, and aluminum, through grants, loans, tax credits, and procurement to drive capital investment in the decarbonization and revitalization of American manufacturing.

The Act advances environmental justice through a new Clean Energy and Sustainability Accelerator that will invest in projects around the country, while delivering 40% of the benefits of investment to disadvantaged communities, as part of the President’s Justice40 initiative. The Act will also fund port electrification, facilitate the deployment of cleaner transit, buses, and trucks, and support critical community capacity building, including grants to environmental justice communities. In addition, the Act will create a new Civilian Climate Corps with over 300,000 members that will conserve public lands, bolster community resilience, and address the changing climate, all while putting good-paying union jobs within reach for more Americans.

The Act bolsters resilience and natural solutions to climate change through a historic investment in coastal restoration, forest management, and soil conservation. The Act will provide resources to farmers, ranchers, and forest landowners, supporting their efforts to reduce emissions. At its peak, the increased investments in climate-smart agriculture alone could reach roughly 130 million cropland acres per year, representing as many as 240,000 farms.

The Act also includes numerous other green energy provisions, such as:

• Investing over $320 billion in renewable energy and energy efficiency tax incentives to meet President Biden's goal of reducing US carbon emissions by 50% below 2005 levels by 2030.
• Extending and modifying the Credit for Electricity Produced from Certain Renewable Resources, providing new incentives for activities that reduce greenhouse gas emissions.
• Extending and expanding the existing suite of renewable energy tax provisions to provide five years of incentives for transmission, energy storage, geothermal, and microgrid controllers under the current Investment Tax Credit and Production Tax Credit framework.
• Allowing a 100% Production Tax Credit for wind energy property and allowing solar energy property the option of taking the PTC.
• Transitioning many of the current green energy tax incentives to a "technology-neutral" Investment Tax Credit and Production Tax Credit in 2027.
• Extending and expanding the 45Q credit for carbon oxide sequestration.
• Extending tax incentives promoting the production and expansion of renewable fuels and creating new incentives for sustainable aviation fuel.
• Creating a new credit to jumpstart the development of clean hydrogen.
• Expanding incentives for energy efficiency and conservation in homes and buildings, with updated standards.
• Providing a refundable tax credit for individuals installing residential solar, wind, battery storage, and other renewable technologies.
• Extending and increasing the new energy-efficient home credit with updated standards and enhanced incentives for net-zero-ready homes.
• Creating a tax credit for individuals and businesses who participate in a state-based wildfire resiliency program.
• Supporting the widespread adoption of zero-emission cars, vans, and buses through tax credits for purchasing vehicles, and supporting the deployment of publicly accessible electric vehicle charging infrastructure.
• Creating a new credit for zero-emission commercial vehicles, with the ability for tax-exempt entities like governments to receive direct payments for buses and other government vehicles.
• Expanding accessibility to electric vehicles by making credits for electric vehicles refundable and providing a new refundable credit for low- and moderate-income families to purchase used electric vehicles.
• Extending and expanding credits for charging electric vehicles and refueling fuel cell vehicles, with enhanced incentives for fast charging that is accessible to the general public.
• Promoting other transportation options by reinstating exclusion from income for employer-provided bike commuter benefits, providing a refundable credit for electric bicycles, and expanding credits to electric scooter and bicycle charging stations.
• Investing in the green workforce by providing tax credits for advanced manufacturing facilities and mechanical insulation.
• Providing additional tax incentives for renewable energy and efficiency projects that engage in high-road labor practices to ensure that the emerging green economy provides good, sustainable, high-paying jobs for workers.
• Reviving the advanced energy project credit for facilities engaging in green energy and energy efficiency technology manufacturing.
• Creating new tax credits for domestic manufacturing of semiconductor and solar and wind components.
• Providing a credit for the labor costs of installing mechanical insulation property.
• Advancing environmental justice using tax credits for research and other academic programs, providing a capped, competitive credit for university programs focused on the impacts of climate change on low-income communities and communities of color.
• Prioritizing projects including Historically Black Colleges and Universities and other Minority Serving Institutions.
• Providing new revenue streams for Superfund cleanup efforts by reinstating excise taxes on petroleum products and chemicals.

The Act's impact on healthcare

The Build Back Better Act (BBBA) was passed by the House of Representatives on November 19, 2021, but it did not become law. The bill was a $3.5 trillion Democratic reconciliation package that included provisions related to climate change, social policy, and healthcare.

The BBBA includes a broad package of health provisions with a total of $1.7 trillion in spending, according to the Congressional Budget Office (CBO). The CBO also projects that three of the health provisions would reduce the number of uninsured by 3.4 million people. Here is a breakdown of the BBBA's impact on healthcare:

• ACA Marketplace Subsidies: The BBBA would extend the American Rescue Plan Act (ARPA) subsidy changes, which eliminate the income eligibility cap and increase the value of premium subsidies. This would make health coverage more affordable for individuals and families.
• New Medicare Hearing Benefit: The BBBA would add coverage of hearing services to Medicare Part B, helping beneficiaries with hearing loss who may otherwise go without treatment. This would also lower out-of-pocket costs for some beneficiaries.
• Lowering Prescription Drug Prices and Spending: The BBBA would allow the federal government to negotiate prices with drug companies for certain high-cost drugs covered under Medicare Part B and Part D. It would also require drug manufacturers to pay a rebate if their prices increase faster than inflation. These provisions aim to reduce out-of-pocket drug costs for Medicare beneficiaries and privately insured individuals.
• Medicare Part D Benefit Redesign: The BBBA would amend the design of Part D by adding a hard cap on out-of-pocket spending and lowering beneficiaries' share of total drug costs. This would result in substantial out-of-pocket cost savings for Medicare beneficiaries with high drug costs.
• Medicaid Coverage Gap: The BBBA would address the coverage gap for individuals in states that have not expanded Medicaid. It would allow people in these states to purchase subsidized coverage on the ACA Marketplace and reduce the number of uninsured.
• Maternal Care and Postpartum Coverage: The BBBA would require states to extend Medicaid postpartum coverage from 60 days to 12 months, ensuring continuity of coverage for postpartum individuals. It would also provide federal grants to bolster other aspects of maternal health care.
• Other Medicaid and Children's Health Insurance (CHIP) Changes: The BBBA would require states to extend 12-month continuous coverage for children on Medicaid and CHIP, improving coverage stability.
• Other Medicaid Financing and Benefit Changes: The BBBA would increase the Medicaid cap amount and match rate for U.S. territories, improving access to healthcare for residents of these areas. It would also impose a penalty on states that implement eligibility or enrollment restrictions.
• Medicaid Home and Community-Based Services and the Direct Care Workforce: The BBBA would create the HCBS Improvement Program, providing a permanent increase in federal Medicaid matching funds for home and community-based services (HCBS). It would also include funding for state planning grants and administrative costs.
• Paid Family and Medical Leave: The BBBA would guarantee four weeks of paid family and medical leave per year for all workers in the U.S., providing a financial safety net for those who need time off to care for themselves or their families.
• Consumer Assistance, Enrollment Assistance, and Outreach: The BBBA would provide funding for state consumer assistance programs (CAPs) and marketplace outreach and enrollment assistance. This would help inform and assist individuals in navigating health insurance options and accessing affordable coverage.

The Act's impact on the economy

The Build Back Better Act was introduced in the 117th Congress to fulfill aspects of President Joe Biden's Build Back Better Plan. The bill was passed by the House of Representatives on November 19, 2021, but it did not become law due to a lack of support from Democratic senators Joe Manchin and Kyrsten Sinema. However, continued negotiations between Manchin and Senate Majority Leader Chuck Schumer led to the Inflation Reduction Act of 2022, which incorporated some of the Build Back Better Act's proposals. Here is an overview of the potential economic impact of the Build Back Better Act and the Inflation Reduction Act:

Impact on the Economy

The Build Back Better Act and the Inflation Reduction Act aim to have a significant impact on the US economy, with a focus on addressing social, infrastructural, and environmental issues. The acts propose substantial investments and reforms in various sectors, including healthcare, education, climate change, and taxation. Here are some key ways the acts could impact the economy:

• Healthcare Expansion: The acts propose expanding access to affordable healthcare, including reducing prescription drug costs, negotiating Medicare drug prices, and lowering out-of-pocket costs for seniors. This could lead to improved healthcare access and reduced financial burden on individuals and families.
• Education and Childcare: The acts include significant investments in education and childcare, such as universal preschool for 3 and 4-year-olds and expanded access to affordable, high-quality childcare. This could enhance educational opportunities and support working parents, particularly mothers.
• Climate Change Mitigation: The acts allocate substantial funds for clean energy and climate change initiatives, with a focus on domestic supply chains, electric vehicle tax credits, and targeted grants and loans for rural communities. These measures could accelerate the transition to clean energy and reduce greenhouse gas emissions.
• Tax Reforms: The acts propose various tax reforms, including a 15% minimum tax on corporate profits for large corporations and a surcharge on corporate stock buybacks. Additionally, the acts aim to close loopholes used by wealthy individuals to avoid paying certain taxes. These reforms could increase tax revenue and address economic inequality.
• Economic Growth and Job Creation: The acts are expected to stimulate economic growth and create millions of good-paying jobs. The Build Back Better Act, in particular, proposed substantial investments in infrastructure, clean energy, and social programs, which could boost economic activity and employment.
• Housing and Community Development: The acts include significant investments in affordable housing and community development projects, such as the construction and improvement of affordable homes and the removal of lead paint from older homes. These initiatives could address housing supply constraints and improve living conditions, particularly in historically under-resourced neighborhoods.
• Immigration Reform: The acts propose investing $100 billion in immigration reform, aiming to reduce backlogs, expand legal representation, and improve the efficiency and humanity of the asylum system and border processing. This could have a significant economic impact by shaping immigration policies and the labor market.
• Economic Equity: The acts prioritize economic equity, with measures such as closing the Medicaid coverage gap, expanding access to nutrition security programs, and investing in rural communities. These initiatives could reduce economic disparities and improve opportunities for disadvantaged communities.

Overall, the Build Back Better Act and the Inflation Reduction Act have the potential to significantly impact the US economy, addressing longstanding social, infrastructural, and environmental issues. While the Build Back Better Act did not become law, many of its proposals were incorporated into the Inflation Reduction Act, which is expected to have a wide-ranging impact on the economic landscape.

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