The White House’s latest Build Back Better framework would increase spending and reduce taxes by $1.85 trillion over 10 years, including $1.75 trillion for social and climate programs and $100 billion for immigration reform, a provision that is contingent upon a ruling by the Senate parliamentarian as to whether it complies with the budget reconciliation rules Democrats want to use to pass the package.
The package also includes a host of tax changes that the White House says would more than fully pay for the new costs, raising up to $1.995 trillion — though budget watchers warn that the plan relies too heavily on accounting gimmicks like artificial sunsets for programs that mean the long-term cost of new programs isn’t really covered.
Here’s a rundown of what’s included, and what got left out, of Biden’s framework.
WHAT’S IN
Universal preschool: The plan would establish universal, free preschool for all 3- and 4-year-olds, expanding access for more than 6 million children, the White House says. It adds that parents will be able to send their children to preschool in the setting of their choice, from public schools to child care providers to Head Start.
The framework would also cap families’ child care costs at a maximum of 7% of income for families earning up to 2.5 times their state’s median income. The child care plan includes a work requirement for parents. These programs would be funded for six years at a cost of $400 billion.
Expanded Child Tax Credit for 2022: The American Rescue Plan passed earlier this year expanded the Child Tax Credit from $2,000 per child to $3,000 or $3,600 per child, depending on age, for couples making up to $150,000 or single parents making up to $112,500. It also made the credit fully refundable. The new framework would extend that expansion for one year, less than the four years Democrats had previously sought. Democrats still hope to extend the credit again, but if lawmakers don’t act, it would revert to $2,000 per child. The new framework would, however, make refundability of the credit permanent.
Expanded health care subsidies and coverage: The framework would provide $130 billion to expand Medicaid coverage and extend expanded Affordable Care Act subsidies for three years, through 2025.
The White House says the plan would provide $0 Affordable Care Act premiums to uninsured people in states that have not expanded Medicaid, leading to some 4 million people gaining coverage. And it estimates that premiums for 9 million Americans who buy their health insurance through the Affordable Care Act Marketplace would fall by an average of $600 per person per year.
The framework also expands Medicare coverage for hearing services at a cost of $35 billion, though it does not include the more expensive dental or vision coverage that progressives had sought.
Climate provisions: The plan would provide $555 billion for various programs to promote clean energy sources and combat climate change, including $320 billion for ten years of expanded tax credits; $110 billion in investments and incentives for clean energy, technology, manufacturing, and supply chains; $105 billion for investments and incentives to improve resiliency to extreme weather; and $20 billion in incentives to promote government procurement of clean energy technology. In all, the White House touts the package as the largest effort to combat the climate crisis in U.S. history.
Affordable housing: The plan provides $150 billion to enable the construction or improvement of more than 1 million affordable homes and invest in rental assistance by providing vouchers to hundreds of thousands more families, The White House says.
Tax changes: To raise revenue, the plan calls for a new 5% surtax on individual incomes over $10 million and an additional 3% surtax on income above $25 million. It also includes a 15% minimum tax on the profits of corporations with over $1 billion in profits report to shareholders, a 15% global minimum tax for corporations, a 1% tax on stock buybacks, a 50% minimum tax on foreign profits of U.S. corporations and increased funding for IRS enforcement to crack down on tax avoidance by the wealthy. In all, the White House says those tax changes would raise about $1.8 trillion over 10 years, while repealing a Trump-era drug rebate rule would add another $145 billion.
The plan also includes funding for elder care, Pell Grants and free school meals.
WHAT'S OUT
Paid family and medical leave: This was a priority for many Democrats, and a campaign promise by Biden. The White House tried to pare back the original plan to provide 12 weeks of guaranteed paid family and medical leave for every worker, offering four weeks instead, but it could not overcome the objections of Sen. Joe Manchin (D-WV).
Free community college: A Biden plan for two years of tuition-free community college was scrapped relatively early on.
Lowering prescription drug costs: Some Democrats had pushed to allow Medicare to negotiate drug prices, but the idea met with resistance from some in the party — and fierce pushback from the pharmaceutical industry and Republicans.
Expanded Medicare coverage for dental and vision: Sen. Bernie Sanders (I-VT) and progressives had made hearing, dental and vision coverage a priority, but the White House plan leaves out the two most complicated and expensive portions of the plan.
Higher corporate and individual income tax rates and a billionaire tax: These ideas fell by the wayside after Democrats struggled to reach consensus.
