Build Back Better Act: Where Key Issues Stand
A snapshot as of 11/2/21
- By [ Austen Jensen , Austin Gold ]
- 11/02/2021
As Congress continues to negotiate the final framework of the reconciliation package, RILA is actively monitoring the developments of what negotiators are considering including in the final bill. Below is an outline of our latest intel regarding what's in and what's out of the legislation.
Snapshot
| Issue | Original Administration Proposal | Original Congressional Proposal | State of Play |
|---|---|---|---|
| Corporate Tax Rate | 28% | 26.5% | 15 percent corporate AMT and close tax gap |
| Child Tax Credit | 5-year extension | 1-year extension | 1-year extension |
| Paid Leave | 12-weeks | 12-weeks | Dropped |
| Climate | Clean Electricity Program | Clean Electricity Program | CEP dropped, now focuses on clean energy tax incentives such as credits and rebates to states |
| Community College | Two years of free community college for all students. | Two years of free community college for all students. | Dropped |
| Child Care/Universal Pre-K | Cap pay for childcare at no more than 7 percent of household income. | Cap pay for childcare at no more than 7 percent of household income. | Cap pay for childcare at no more than 7 percent of household income |
| Prescription Drugs | Allows Medicare to negotiate drug prices. | Allows Medicare to negotiate drug prices. | Dropped, smaller carve outs considered |
| Medicaid Expansion | 1) ACA credits expanded to 100 percent of the poverty line. 2) Creation of federal Medicaid program for people in non-expansion states. |
1) ACA credits expanded to 100 percent of the poverty line. 2) Creation of federal Medicaid program for people in non-expansion states. |
Extension and expansion of health benefits through 2025 |
| Medicare Expansion | Expands coverage to dental, hearing and vision services. | Expands coverage to dental, hearing and vision services. | Expands coverage to hearing services |
Overview
Corporate/Income Taxes
- Current proposal adds a 5% tax on individual income above $10 million, with an additional 3% tacked on above $25 million. It also imposes a 1% tax on stock buybacks and a 15% minimum tax on corporations that report at least $1 billion in profits to their shareholders.
- Where it Stands: The White House estimates that the funding offsets will generate a total of nearly $2 trillion. While having opposed the original corporate tax hike proposal, Senator Kyrsten Sinema (D-AZ) has openly supported the proposal of a corporate minimum tax based on book income. The proposal has yet to get a formal stamp of approval from House and Senate leaders.
Extended Child Tax Credit
- Current proposal extends the credit through 2022 and increases it from $2,000 to $3,000 for children ages six and older, and $3,600 per child under age 6. The credit is available to individuals making up to $75,000 or married couples making up to $150,000.
- Where it Stands: While progressives ultimately wanted a much longer permanent extension, the White House has decided to extend the child tax credit for one year.
Paid Family and Medical Leave
- Where it Stands: Paid family and medical leave provisions have been dropped from the most recent proposal.
Climate
- Current proposal includes $555 billion for clean energy tax incentives, clean energy manufacturing, climate resilience, and energy procurement.
- Where it Stands: Negotiators dropped the clean electricity program from the most recent proposal, which was being objected by Senator Joe Manchin (D-WV).
Community College
- Where it Stands: Two years of free community college for all students has been dropped from the most recent proposal.
Child Care and Universal Pre-K
- Current proposal would subsidize preschool for three- and four-year-olds and cap the amount families pay for childcare at no more than 7 percent of their income at a cost of $400 billion.
- Where it Stands: The most recent proposal was scaled back from $450 billion to $400 billion.
Prescription Drug Prices
- There is currently no longer legislative language in the proposal to address prescription drugs.
- Where it Stands: Senator Sinema, House leadership, and the White House are discussing a possible proposal that includes a redesign of Medicare Part D, drug negotiation and rebates.
Medicare Expansion
- Current proposal would provide $35 billion for Medicare to include coverage of hearing services.
- Where it Stands: The pared back proposal to cover hearing is a compromise to Senator Manchin who raised concerns about keeping Medicare from running out of money in its based current budget projections.
Medicaid Expansion
- Current proposal would extend American Rescue Plan Act’s expanded subsidies through 2025, including for those whose income was previously too high to qualify. The proposal would also provide premium tax credits to the uninsured in states that didn’t expand Medicaid under the Affordable Care Act (ACA).
- Where it Stands: It remains unclear as to whether progressives will accept this language amid criticism that it’s an overly expensive solution that subsidizes private insurance rather than creating a new federal program.
For more information on the policy issues the RILA team is tracking, please contact Senior Vice President, Government Affairs Austen Jensen.
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Public Policy
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Tax
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