What’s in Build Back Better, Biden’s Social Policy and Climate Plan
The package includes $400 billion to bolster support for children and families, $555 billion for climate change programs and $166 billion in housing aid.,
WASHINGTON — The House on Friday passed a sprawling, roughly $2 trillion social policy, climate and tax measure that is the central pillar of President Biden’s domestic agenda.
The product of months of intense negotiations, the package would bolster the federal safety net, enhancing support for children and families with child care subsidies and universal prekindergarten, expanding health coverage, increasing housing assistance and investing heavily in combating climate change.
The measure is likely to change as it moves through the evenly divided Senate, where Republicans are unanimously opposed and Democrats cannot afford to lose even a single vote from their party.
Here is where it stands coming out of the House.
New support for children and families.
The bill would provide nearly $400 billion to help states build universal prekindergarten and affordable child care programs over six years.
That includes an estimated $100 billion in funding for child care expansion and subsidies over the first three years, and similar spending levels for the duration of the program. The proposal is designed to ensure that the vast majority of families — those with four-person households earning up to $300,000 — spend no more than 7 percent of their income on child care. Families that earn under 75 percent of the state’s median income would pay nothing.
The federal government would provide at least $18 billion, and unspecified spending levels for the duration of the program, to fund state programs that provide preschool programs for all 3-and 4-year olds. For the first three years, it would cover 100 percent of a states’ universal preschool expenditures, and in subsequent years would pay a percentage — 90 percent in year four, 75 percent in year five, and 60 percent in year six — in conjunction with states. The preschool spending also reserves $2.5 billion annually to increase the pay of staff in Head Start programs.
The legislation would extend for a year the expansion of the Child Tax Credit included in the $1.9 trillion pandemic aid law enacted earlier this year. That provides monthly payments to about 35 million families, giving $300 per child under the age of 6 and $250 per child between ages 6 and 17.
The bill also would create a new federal program to cover four weeks of paid family and medical leave, but that provision is likely to be dropped in the Senate, where it faces opposition from Senator Joe Manchin III of West Virginia, a crucial Democratic swing vote.
— Erica L. Green
A major investment in climate change programs.
The $555 billion for climate change programs is the single largest spending item in the broader bill, and would easily make it the largest climate change law in United States history.
On its own, the bill will not be enough to fulfill Mr. Biden’s pledge to halve the United States’ emissions from 2005 levels by 2030. But it would get the country about one-third to halfway toward that target, according to an analysis by the Rhodium Group, an independent research organization.
Once enacted, the bill could lower the United States’ greenhouse gas pollution by about a billion tons of carbon dioxide by 2030, the Rhodium analysis found — roughly the equivalent of taking all the cars in the United States off the road for one year.
The centerpiece of the new climate spending is about $320 billion in tax incentives for producers and purchasers of wind, solar and nuclear power, inducements intended to speed up a transition away from oil, gas and coal. Buyers of electric vehicles would also benefit, receiving up to $12,500 in tax credits — depending on the portion of vehicle parts made in America, and whether it was built by union workers.
There would be $1 billion to build electric vehicle charging stations, $2.9 billion to make the electrical grid more conducive to transmitting wind and solar power, and $12.5 billion in rebates for homeowners who install more energy-efficient appliances. And the bill would provide $55 billion to promote climate-friendly farming and forestry and research programs, $29 billion for a “green bank” program to help communities finance renewable energy projects and $10 billion to help rural electric cooperatives cover the cost of switching from coal plants to renewable energy.
The House measure also includes a new fee on large oil and gas companies for leaks of methane, a potent greenhouse gas. But that provision, too, could be weakened or removed given opposition by Mr. Manchin, whose state is one of the nation’s largest producers of natural gas.
— Coral Davenport
An expansion of health coverage.
The legislation would patch numerous holes in the Affordable Care Act, bringing the nation closer to the Democrats’ goal of universal health coverage. The bill would extend generous subsidies that have lowered the cost of premiums for Americans who buy their own insurance. It would permanently extend a program that insures millions of children from low-income families, and would guarantee a year of Medicaid coverage for eligible women in the year after they have a child.
In a provision aimed at vulnerable people without health coverage, it would offer comprehensive health coverage to poor adults who live in 12 states that have declined to expand their Medicaid programs, giving them subsidized access to private Obamacare plans. Several of these changes would expire after 2025, but millions more Americans would gain health coverage in the next few years.
Older Americans would receive a number of new benefits. Medicare would begin covering hearing aids and audiology services in 2023. Medicare’s drug benefit would become more robust, lowering the total amount any patient would be asked to pay to $2,000 a year. And patients who need long-term care services would see new funding to enable them to receive that care at home, instead of a nursing home.
The funding for home-based care is smaller than the president’s initial plan, however, and lawmakers jettisoned popular provisions that would have also added Medicare coverage for eyeglasses and dental care.
For the first time, the government would be given the power to regulate the prices of certain prescription drugs. Medicare would be allowed to negotiate directly with drug makers over a subset of expensive drugs in the coming years. And drugmakers would be barred from raising the prices of their medicines by more than the rate of inflation. The drug price provisions are less aggressive than an original House proposal, but still expected to have substantial effects over time.
— Margot Sanger-Katz
Addressing immigration issues.
The legislation would expand the homeland security secretary’s authority to grant a temporary status known as parole to undocumented immigrants who have lived in the country for a decade, providing them with work permits and shielding them from deportation. The work permits would last five years, and then would need to be renewed.
The proposal would include most undocumented immigrants who have lived continuously in the United States since before Jan. 1, 2011, and could help between 7 million and 8 million people. But significantly, the proposal does not create a new pathway to citizenship after such plans were disqualified under Senate rules.
The current bill essentially codifies an enhanced version of the Deferred Action for Childhood Arrivals, or DACA, program introduced by President Barack Obama in 2012.
Mr. Biden‘s plan would also attempt to address the legal green card backlog, freeing up hundreds of thousands of visas dating back to 1992 that various administrations failed to use, and making them available for immigrants who are currently caught up in a bureaucratic morass.
The plan also includes $2.8 billion for U.S. Citizenship and Immigration Services to more efficiently evaluate and process migrants’ paperwork.
— Luke Broadwater
Investing in affordable housing.
The measure includes the single largest investment in affordable housing in history, according to the Biden administration. It would provide $166 billion in housing aid, which includes building or preserving more than 1 million affordable homes and offering rental and down payment assistance.
About $65 billion would address the backlog of public housing repairs and $25 billion would go toward rental assistance, mostly through the form of housing vouchers. The plan would also invest $15 billion in the creation of new rental homes for the lowest-income households.
The proposal would also create a $10 billion grant program that would support access to affordable housing and improve mobility for low-income riders and residents of disadvantaged communities. Funds would be used to create new transit routes, expand service and repair facilities.
— Madeleine Ngo
Taxing corporations and the wealthy.
The bill raises the cap on how much residents, particularly in high-tax states like New York, California and New Jersey, can deduct in state and local taxes. Undoing the so-called SALT cap, which is currently set to expire after 2025, has been a key priority for lawmakers from those states since it was imposed as part of the 2017 Republican tax law.
The cap would rise from its current $10,000 limit to $80,000, and be extended through 2030 before reducing it back to $10,000 in 2031. The cap would then expire permanently in 2032. But it is likely to be changed in the Senate, where two key players, Senators Bernie Sanders of Vermont and Bob Menendez of New Jersey, are discussing a separate agreement to eliminate the cap for families making up to at least $550,000 and impose it permanently for higher-income homeowners.
The House bill also imposes new taxes on the wealthy and on corporations.
Taxpayers with an adjusted gross income of more than $10 million would face an additional 5 percent tax on top of the 37 percent marginal tax rate they already pay. Those making more than $25 million would face an extra 3 percent surtax.
Profitable companies with more than $1 billion in so-called book income — profits that firms report to their shareholders but not to the I.R.S. — that pay little to no corporate income tax would now be subject to a minimum tax of 15 percent.
Big multinational companies would see the tax rate on their foreign earnings increase to 15 percent from 10.5 percent.
— Alan Rappeport