A Big Win for Biden and Pelosi

House votes on Biden's $1.75 trillion bill after hours-long overnight delay at U.S. Capitol in Washington
ALEXANDER DRAGO
By Yuval Rosenberg

They finally did it. After
months of wrangling, House Democrats passed President Biden’s
social spending package, sending it to the Senate – where it
probably faces more weeks of difficult debate. But Friday’s vote
was a major sign of progress. Here’s what you need to
know.
House Democrats Pass $1.7 Trillion Biden
Spending Bill

President Joe Biden and his fellow Democrats took a big
step toward enacting their economic agenda on Friday morning as the
House narrowly approved the $1.7 trillion Build Back Better Act,
the party’s sweeping package of climate, education and health care
programs financed by higher taxes on some corporations and
top-earning individuals.

The massive bill, running nearly 2,500 pages long,
represents the most significant bolstering of the nation’s social
safety net in years — including a health care expansion and
measures to lower drug prices alongside provisions for universal
pre-kindergarten, child care, elder care, paid leave and
more.

"We have a Build Back Better bill that is historic,
transformative and larger than anything we have ever done before,"
House Speaker Nancy Pelosi (D-CA) said in a speech before the vote,
adding, "If you are a parent, a senior, a child, a worker, if you
are an American, this bill – this bill is for you."

The vote came after weeks and weeks of often tense and
tenuous negotiations between Democratic centrists and progressives
— and it could be followed by more of the same, as the bill now
heads to the evenly divided Senate, where it may still undergo
substantial changes as Sen. Joe Manchin (D-WV) or others exert
their leverage and Democrats try to lock in the support of all 50
of their members.

Democrats have already pared back what started out as a
$3.5 trillion plan, scrapping or downsizing proposals to provide
two years of free community college, add dental and vision coverage
to Medicare and extend an expanded Child Tax Credit for four years.
They also did away with plans to raise the corporate tax rate and
top marginal rates on individuals, among other proposals, instead
turning to a 15% minimum corporate tax and surtaxes on individuals
making more than $10 million a year.

Yet for all the intraparty drama surrounding the
legislation in recent months, the 220-213 vote in the House saw
only one Democrat, Rep. Jared Golden of Maine, vote against the
package.

Republicans, meanwhile, remained unified in opposition.
Democrats had intended to hold the vote Thursday evening, but they
were forced to delay it until the morning after House Minority
Leader Kevin McCarthy (R-CA) held the floor with a rambling,
record-setting eight-and-a-half-hour speech blasting the Democratic
bill as "the single most reckless and irresponsible spending in the
history of this country" and veering off into a variety of other
topics that The New York Times said "sounded like a Mad Libs of
Republican attacks."

What’s next: The Build Back Better bill still has a
long way to go, and some of its most popular provisions — such as
the expansion of paid family and medical leave — could still be
stripped out by the Senate. The House plan to temporarily raise the
annual cap on the deductibility of state and local taxes from
$10,000 to $80,000 also faces pushback, and an immigration reform
proposal could be ruled out by the Senate parliamentarian. Senate
changes would the require the revised bill to again pass the
House.

The bottom line: Democrats should have a path to
eventual final passage, which would mark another landmark
legislative achievement for Biden. Then he and his party will still
have to sell the American public on their accomplishments. "I hope
the Senate passes this very quickly. But then the big work is to
get out there and get it done, actually implement it and talk about
it and let people know what's coming," said Rep. Pramila Jayapal
(D-WA), chair of the Congressional Progressive Caucus.

Even then, because many of the provisions in the bill were
made temporary as part of efforts to reduce their official cost,
lawmakers may still be dealing with them and debating their
reauthorization for years to come.

What’s in the Build Back Better Bill Passed by the House

The roughly $2 trillion bill the House passed Friday will
almost certainly be reshaped in the coming days and weeks, and the
final product could end up being significantly different than the
document the lower chamber is sending to the Senate. But it’s still
worth highlighting some key elements of the House bill, if only
because it will serve as a starting point for Senate Democrats to
work on — and many of the provisions may survive intact after all
is said and done.

First, a quick review of the topline numbers. You may see
different tallies being reported due to different interpretations
about how the spending, tax credit and revenue provisions will play
out. Here’s an overview of the basics:

* $1.68 trillion: the total increase
in federal spending over 10 years, according to the Congressional
Budget Office, without subtracting offsets;

* $367 billion: the net increase in spending after
offsets, according to the CBO, which for technical reasons did not
include revenue increases from more stringent IRS
enforcement;

* $160 billion: the net increase in deficit
spending, including the CBO’s unofficial estimate of revenues
produced by increased IRS enforcement;

* $113 billion: surplus revenue from the bill over
10 years (and thus a reduction in the deficit) according to more
optimistic estimates from the White House on how much revenue
enhanced IRS enforcement could produce.

In terms of revenue, the bill would increase tax revenues
from corporations by $830 billion over 10 years,
according to estimates from the Committee for a Responsible Federal
Budget, with provisions including a 15% minimum corporate income
tax that applies to both domestic and foreign earnings, and a 1%
tax on stock buybacks. Taxes on wealthy individuals would produce
an estimated $640 billion, and include a surtax of 5% on
individual incomes over $10 million per year, bumped up by another
3% for those over $25 million, and an expansion of the net
investment tax.

Digging into the specific programs, here’s what’s actually
in the bill:

Climate change:
Climate-related programs would receive about $555
billion in funding, the largest single area of focus in the
bill. A big chunk of that, $320 billion, comes in the form of tax
credits intended to encourage businesses and individuals to
purchase solar panels and electric cars, and to improve energy-use
efficiency in buildings. The bill would also provide incentives for
businesses to manufacture green energy technologies, and create a
Civilian Climate Corps to provide jobs to 300,000 people, with a
focus on forest and wetland restoration.

Universal pre-K: The bill would
provide $400 billion for states to create or enhance
universal pre-kindergarten for all three- and four-year-old
children and establish an affordable child care program, with both
programs funded for six years.

Child tax credits: The pandemic-era
program providing enhanced and fully refundable child tax credits
would be extended by one year, at a cost of $200 billion.
And refundability, which enables the IRS to provide payments to
families who fall short of income reporting requirements, would
become permanent.

Paid leave: The House bill would
create a new program to provide four weeks of paid family and
medical leave, beginning in 2024 at a cost of $200 billion.
This may not survive Senate revisions.

Enhanced health care: The bill would
provide $165 billion to reduce Obamacare premiums and expand
Medicare coverage to include hearing benefits. It would also set
price limits on some drugs covered by Medicare and cap the cost of
insulin at $35 per month starting in 2023.

Home care: In-home health care through
Medicaid would receive $150 billion in funding.

Affordable housing: Democrats want to
fund the construction of more than 1 million new homes for buyers
and renters, at a cost of $150 billion.

The bill also includes an increase in the cap on the
federal deduction for state and local taxes, lifting it from the
current $10,000 to $80,000 until 2030, after which it would revert
to the lower level. Amid widespread concerns that cap increase
would provide an enormous tax break for high-income households,
this provision is expected to be revised in the Senate to limit its
use by wealthy taxpayers.

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