Build Back Better Act


The Build Back Better Act was a bill introduced in the 117th Congress to fulfill aspects of President Joe Biden's Build Back Better Plan. It was spun off from the American Jobs Plan, alongside the Infrastructure Investment and Jobs Act, as a $3.5 trillion Democratic reconciliation package that included provisions related to climate change and social policy. Following negotiations, the price was lowered to approximately $2.2 trillion. The bill was passed 220–213 by the House of Representatives on November 19, 2021.
During negotiations, Senator Joe Manchin publicly pulled his support from the bill for not matching his envisioned cost of about $1.75 trillion due to provisions that lasted for less than ten years. After renegotiating the reduction of the Build Back Better Act's size, scope, and cost with Biden and Democratic congressional leaders, Manchin ultimately rejected the bill. Continued negotiations between Manchin and Senate Majority Leader Chuck Schumer eventually resulted in the Inflation Reduction Act of 2022, which incorporated some of the Build Back Better Act's climate change, healthcare, and tax reform proposals while excluding its social safety net proposals.

Background

Before the bill was spun off from the American Jobs Plan, on April 5, 2021, Senator Joe Manchin proposed raising the corporate tax rate from 21% to 25%, instead of the 28% Biden originally called for. On May 25, Republican senators Pat Toomey and Roger Wicker indicated a lack of support within their caucus to change aspects of the 2017 tax act, and suggested repurposing unspent COVID-19 relief funds. On May 28, Biden released details of a $6 trillion budget proposal for the fiscal year of 2022, which would raise taxes on corporations and millionaires to pay for both the AJP and the American Families Plan over 15 years. On June 3, White House press secretary Jen Psaki announced a tweaked AJP proposal that would not increase taxes on corporations, in exchange for closing loopholes and requiring them to pay at least 15%. On June 5, finance ministers from Group of Seven announced that they would support a global 15% corporate tax minimum.
On May 17, seven Democrats on the House Ways and Means Committee signed a letter to the president asking him to prioritize enhanced unemployment insurance and direct payments in the AFP. The letter cited Biden's promise to include the former adjusted to "economic conditions", but further that the latter also "served as to families and workers that have had their lives upended by the pandemic". Previously, on March 31, 21 Senate Democrats sent Biden a letter in favor of further stimulus payments and UI, and in April, the Economic Security Project reported that two additional direct payments could keep 12 million Americans out of poverty.
On May 28, Senate Parliamentarian Elizabeth MacDonough indicated that the current rules dictate that the reconciliation process should not be used more than once during a fiscal year. A majority in the Senate Budget Committee would be needed to change this. On June 3, Senator Manchin advocated against using reconciliation, though other Democrats supported it. On June 16, Senate Majority Leader Charles Schumer met with the Democratic members of the Senate Budget Committee to discuss the option of passing a budget resolution using reconciliation. Democrats were reportedly considering such a bill around $6 trillion. In late June, Manchin said he was open to adjusting the 2017 tax bill and stated his support for a $2 trillion reconciliation bill.
On June 24, a bipartisan group met with the president and reached a $1.2 trillion bipartisan deal focusing on physical infrastructure. Biden stipulated that a separate "human infrastructure" bill must also pass, whether through bipartisanship or reconciliation, but later walked back this position. White House officials stated on July 7 that legislative text was nearing completion. On July 14, the Senate Energy and Natural Resources Committee advanced an energy bill expected to be included in the bipartisan package. House Speaker Nancy Pelosi similarly stated that the House would not vote on the physical infrastructure bill until the larger bill passes in the Senate, but later walked back this position as well, as the physical infrastructure package passed the House on November 5 and was signed into law before the larger bill had received a vote.

Provisions

Original version

The original version of the bill was estimated to cost $3.5 trillion. It may have increased the state and local tax deduction deduction limit. It was also expected to include the Protecting the Right to Organize Act labor bill, set a clean electricity standard called the Clean Energy Performance Program, and reform immigration to the extent allowed by reconciliation rules.
On September 9, 2021, Analysis Group published a report commissioned by Evergreen Action and the Natural Resources Defense Council. It found that the plan's Clean Electricity Payment Program was expected to create 7.7 million American jobs over the next decade, generate $907 billion in economic growth, and provide state and local governments over $154 billion in tax revenue.
The House Natural Resources Committee's $25.6 billion portion of the bill included a repeal of a 2017 law requiring the government to lease land at the Arctic National Wildlife Refuge for drilling, and would have banned offshore drilling in both the Atlantic and Pacific oceans, as well as the eastern Gulf of Mexico. A CCC jobs program would have been created. Money was to have been raised via an increase on royalties paid by fossil fuel companies to drill on federal lands and waters, as well as the establishment of a royalty payment for hard-rock mining.
The House Science Committee's $45.51 billion portion included over $4 billion for NASA.
Democrats of the House Transportation Committee proposed $10 billion for transit support, $10 billion for high-speed rail, $4 billion to lower carbon emissions and $4 billion to address the division of communities by highways. Additionally, the bill allotted $2.5 billion to deal with port congestion and $1 billion to reduce aviation-caused carbon emissions.
The bill was expected to generate $1.5 trillion in revenue from corporations and the wealthy. In September, it was reported that House Democrats hoped to increase the corporate tax rate to 26.5% as part of the reconciliation bill; the next month, it was reported that the corporate tax rate was unlikely to be increased in the bill due to opposition from Senator Sinema.
Progressive lawmakers pushed in early versions of the bill for funding numerous programs such as the child tax credit, earned income tax credit, and Affordable Care Act subsidies permanently or to 2025, hoping that funding would be renewed.

Revised version

The revised version of the bill is estimated to cost approximately $2.2 trillion. The White House's legislative framework, the costs of which were disputed by nonpartisan estimates, includes:
  • $555 billion for clean energy and climate change provisions
  • $400 billion for childcare and preschools
  • $200 billion for child tax and earned income tax credits
  • $150 billion for home care
  • $150 billion for housing
  • $130 billion for Affordable Care Act credits
  • $90 billion for equity and other investments
  • $40 billion for higher education and workforce
  • $35 billion to expand Medicare to hearing services
Specifics of the bill include:
  • An increase in the SALT deduction limit from $10,000 to $80,000
  • Universal preschool for all three and four-year-olds
  • Child-care cost cap of 7% of income for parents earning up to 250% of a state's median income
  • $35-per-month limit on the cost of insulin under Medicare & limit on out-of-pocket prescription drug costs at $2,000 per year
  • Hearing benefits for Medicare beneficiaries, including coverage for a new hearing aid every five years
  • One year of expanded child tax credits
  • A provision for 4 weeks of paid family and medical leave
  • Extended Affordable Care Act subsidies
  • More than one million new affordable housing units, and modernizing existing public housing
  • Expanded home care for elderly and disabled individuals through Medicaid
  • Creation of 1–2 million new apprenticeship slots
  • Electric car tax credit of $7,500, plus an extra $4,500 for American-made vehicles built with union labor
  • New tax credits for installing solar panels or weatherizing homes
The pending payment methods are:
  • $400 billion from IRS reform, including the enforcement of tax payments from taxpayers making over $400,000
  • $350 billion by imposing a 15% minimum tax on foreign corporate profits
  • $325 billion via a 15% corporate minimum tax
  • $250 billion by closing a Medicare tax loophole benefiting the wealthy
  • $230 billion from an adjusted gross income surcharge on the 0.02% most wealthy, applying a 5% rate for those who make $10 million, and an additional 3% surtax above $25 million
  • $170 billion by reducing business losses of the wealthy
  • $145 billion by repealing the 2017 tax act's rebate rule regarding prescription drugs
  • $125 billion via a 1% surcharge on corporate stock buybacks

    Legislative history

Budget framework negotiations

On July 13, the Democrats of the Senate Budget Committee reached a reconciliation budget limit agreement of $3.5 trillion in spending over the next decade. The next day, the Senate released a framework, which included most of the provisions of the AFP. On August 1, Manchin restated his opinion that the bipartisan and reconciliation bills should remain separate, citing concerns about the latter including how it would be paid for and uncertainty regarding whether it would pass. Representative Alexandria Ocasio-Cortez responded by claiming that enough House Democrats would vote to block the passage of the bipartisan bill to force the approval of the incomplete reconciliation bill, citing the possibility of "a lot of corporate lobbyist giveaways" being hidden in the former.
On August 10, the Senate voted along party lines to begin debating a $3.5 trillion budget resolution. Early the next morning, the resolution passed along party lines. In August, a group of several moderate Democratic representatives urged Pelosi to hold a separate House vote on the bipartisan bill, writing, "We will not consider voting for a budget resolution until the bipartisan passes the House and is signed into law." While reaffirming that the House would not take up the bipartisan bill before the reconciliation bill passes in the Senate, Pelosi announced that she had asked the House Rules Committee to consider the possibility of a rule to advance both packages, though this did not immediately satisfy the group of moderates.
On September 2, Manchin indicated that he only supported between $1–1.5 trillion of the reconciliation package, and called for a "strategic pause". This prompted Biden to state, "I think we can work something out," and Schumer to say, "We're moving full speed ahead." On September 12, Manchin confirmed that he would not yet support the bill, stating, "We don't have the need to rush into this". Biden subsequently held meetings with Senators Manchin and Kyrsten Sinema to discuss their objections to the package. Both House Majority Whip James Clyburn and House Budget Committee chairman John Yarmuth suggested that the bill could be reduced from $3.5 trillion and still meet the president's goals.
On September 23, Schumer announced that the White House and both houses of Congress had reached an agreement concerning a bill payment framework, which he described as a "menu of options". The House Budget Committee advanced the bill in a markup session on September 25; it was next expected be reviewed by the House Rules Committee.
On September 30, Politico reported that Manchin and Schumer secretly signed an agreement proposed by the former in July to limit the total cost of the reconciliation bill to $1.5 trillion. In the text of the agreement, Manchin outlined his conditions for the bill and did not guarantee that he would vote for the final legislation if it exceeded his demands. A spokesperson for Schumer said that he had "merely acknowledged" Manchin's stance on the bill and would try to dissuade him from some of his demands.