What’s in Democrats’ $1.75 trillion social spending and climate bill?

Washington – After protracted negotiations between congressional Democrats and President Biden over the details of his domestic policy agenda, the White House on Thursday A revamped framework was createdIt aims to increase the nation’s social security net and combat climate change.

The package’s cost has dropped from $3.5 trillion to $1.75 trillion in a decade. Despite the decrease in cost, Republicans are opposed to the plan. Democrats are trying reconciliation to pass the bill through the budgetary process, which would allow the plan to clear the Senate with only Democratic support. 

Democratic leaders have spent weeks negotiating with colleagues about the size of the package. This has helped to bridge the gap between Joe Manchin, West Virginia’s moderate Democratic Senator, and Kyrsten Synema, Arizona’s progressive Democratic Senator.

The President Biden expressed his confidence that the framework would be supported by all Democrats after it was released. It remains to see if the plan gets the support of all corners of the Democratic Party. Some lawmakers had priority issues that were cut from the framework.  

Here are some of these major items, as per the White House, and some of the initiatives that have been dropped in negotiations. As negotiations continue, this list will be updated..

What’s the Build Back better Act framework?

• Climate change mitigation 

Combating climate change and slowing the rate at which Earth warms will mean transitioning away from fossil fuels, the major source of greenhouse gas emissions. The White House unveiled a new framework with $555 billion to support climate and clean-energy investments.

As written, the plan would cut more than a gigaton of greenhouse gas emissions by 2030 — a roughly 50% reduction compared to 2005 levels, according to the White House. 

The legislation would offer tax credits to Americans who purchase new electric vehicles. This could provide up to $12,500 in incentives for some families to get rid of their gas-guzzling cars. New tax incentives will be offered to encourage the installation and maintenance of solar panels in American homes.  

Manchin opposed the $150 billion “clean electric performance program” in the original proposal. This would reward utility companies for increasing their renewable energy supply by 4% per annum and penalize those that don’t meet that benchmark. He argued that companies already do this so it’s not necessary to incentivize them. Climate advocates claim that private enterprise isn’t moving quickly enough. This provision would help accelerate the transition from fossil fuels.

• Pre-K for all children

Mr. Biden’s plan includes $400 billion for child and preschool programs through programs that will be funded for six years. The plan provides universal preschool access for all 3- and 4-year olds. However, it also limits child care costs to a subset of some families to no more that 7%. To qualify, parents must meet work requirements.

This highly debated provision would allow Medicare to cover hearing services. However the framework does not include a proposal that Medicare should also include vision and dental benefits. This was Senator Bernie Sanders’ top priority.

Manchin believes the program’s insolvency should be addressed before it’s expanded.

• Credit for extended child tax credits

Democrats increased the Child tax creditTheir 2021 budget $1.9 trillion COVID-19 relief program and wanted to extend it through 2025. The new framework, however, extends the child tax credit by one year for 2022. This, according to the White House, will provide more than 35,000,000 households with tax cuts of up to $3600 per kid.

Families receive $3,600 for children under 6 years old and $3,000 for children 6-18 years old under the enhancement. Families receive either $250 or $300 per month.

Individuals making $75,000 or more and married couples making $150,000 or more can receive the full extended child tax credit.

• 4 weeks paid family and medical leave

It was in the bill, then removed — and it’s back in again, for now, in the version that will receive a vote in the House this week. The original 12 weeks of paid medical and family leave included by Democrats was removed because it was too costly. However, the House and Senate were represented by women senators who championed the provision and succeeded in restoring a smaller version that would give qualified Americans four weeks of paid parental leave.

Manchin supports paid leaves in principle and has introduced a paid-leave bill. However, he claims that this bill, which was passed with the votes of Democrats under reconciliation, is the wrong way to legislate it. He believes that paid leave should be in a separate bill. This will allow it to be more easily repealed or face other challenges.

The House is currently considering a bill that includes $100 billion to reform the nation’s immigration system. If included, it would increase the price tag from $1.75 Trillion to $1.85 Trillion. The Senate parliamentarian, who is responsible for ensuring that the legislation’s provisions conform to the rules governing reconciliation, has previously rejected attempts to include immigration reform in the package.

It would allow the Department of Homeland Security to give an estimated 7 million unauthorized immigrants — including Dreamers, coronavirus-era essential workers and farm workers — work permits and temporary protection from deportation, similar to Deferred Action for Childhood Arrivals (DACA), an Obama-era initiative. The CBO would provide its analysis, and then it would be subjected to the ruling of Senator parliamentarian.

• Housing and health-care provisions

Mr. Biden’s plan includes $150 billion to create or improve more than 1,000,000 affordable housing units, as well as assistance with rental and downpayment assistance. 

It also invests in maternal and child health, community violence initiatives, Native communities, and supply chain resilience.

The plan will lower premiums by an average $600 per person for over 9 million Americans who buy insurance through the AffordableCare Act’s marketplace. It will also provide coverage for up 4 million Americans who are currently not insured.

What was the reduction in the bill?

• Two years of community college free

Although Mr. Biden initially proposed two years of free community college to all students, regardless of their income, the White House dropped the plan from its unveiled framework.

According to a White House fact sheet, the measure increases the maximum Pell Grant available to students over 5 million by $550 and opens access to “Dreamers,” a term that refers to millions of undocumented immigrants who arrived in the U.S. to be children.

• Cutting prescription drug prices

One key provision in a House Democrats bill was designed to help lower prescription drug prices. According to the White House prescription drug prices are two to three-times higher in America than they are in other countries. The legislation would have permitted Medicare to negotiate drug prices. However, the new framework didn’t include this proposal. Medicare is currently forbidden by law from negotiating the best deal.

The White House believes that taxes in BBB will generate more than $1.99 trillion to pay for the $1.75 trillion Build Back Better program over 10 years. This is without increasing taxes on small businesses and those earning less than $400,000 per year. When the CBO’s analysis is released this week, we will soon find out if the CBO agrees or disagrees with the administration.

How Democrats will pay for it

The taxesMr. Biden’s proposal calls for a 15% minimum tax on corporate profits, which large corporations will report to shareholders, and a surcharge of 1% on corporate stock buybacks. According to the White House these provisions would generate $450 Billion in new revenue.

The framework calls for a global minimum and a new surtax on the income of the wealthiest Americans. It also calls for increased IRS enforcement. The bill would impose an additional 3% surtax on income above $25 million and a 5% tax rate for those earning more than $10 million. The White House estimates that the new surtax would raise $230 billion for the nation’s highest earners taxpayers.

Tax fraud: The biggest revenue-raiser in the bill amounts to more aggressive pursuit by the IRS of tax cheats. The administration seeks $80 billion to fund the hiring of more IRS agents and the modernization of the agency’s technology. This would allow the White House to bring in an additional $400 billion over ten years. 

SALT tax capThis provision would make a significant dent in revenues by partially restoring the generous tax deduction that was cut by Republicans during the Trump presidency. The House is currently considering a social spending bill that would increase the State and Local Tax Deduction (SALT) cap. This limits the amount of state or local taxes individuals can deduct from federal taxes. The cap, which is largely affected by wealthy Americans living in coastal Democratic-dominant States, would go up from $10,000 to $80,000 through 2031, and then drop to $10,000 after that. The SALT cap, which was enacted by the Republican tax cut in 2016, will expire in 2026.

This would be one the most expensive provisions in the bill. It would cost approximately $400 billion for five years. And, as the Center on Budget and Policy Priorities points, it would primarily be beneficial to Americans who earn more than $200,000 a year. 

Sarah Ewall-Wice, Jack Turman, Cara Korte, Ed O’Keefe and Sara Cook contributed to this report.