The original item was published from October 29, 2021 1:34 PM to October 29, 2021 1:35 PM
After months of negotiations between the Biden Administration, Congressional Leadership, Senate moderates and House progressives, President Joe Biden announced a 10 year, $1.75 trillion human infrastructure framework on Thursday. This act will be considered using the budget reconciliation process that only requires 50 votes for passage in the Senate. Some key elements of the Build Back Better Act include universal preschool, elder care, expanded child tax credits, and clean energy tax credits.
Members of the New Jersey Congressional delegation have indicated publicly that they expect the removal of the State and Local Taxes (SALT) deduction cap to be included in the final bill. Though it remains unclear whether that is permanent or for a few years.
Specific information in this bill from the Biden Administration includes:
- Universal Preschool for all 3- and 4-year Olds: Expand access to free high-quality preschool for more than 6 million children. This is a long-term program, with funding for six years.
- Affordable High Quality Child Care: Limit child care costs for families to no more than 7% of income, for families earning up to 250% of state median income. It enables states to expand access to about 20 million children. Parents must be working, seeking work, in training or taking care of a serious health issue. This is a long-term program, with funding for six years.
- Affordable, High-Quality Care for Older Americans and People with Disabilities in Their Homes and Communities: Strengthening an existing program through Medicaid and ending the existing backlog and improving working conditions for home care workers.
- Expanded Child Tax Credit: Extend for one year the current expanded Child Tax Credit for more than 35 million American households, with monthly payments for households earning up to $150,000 per year. Make refundability of the Child Tax Credit permanent.
- Clean Energy Tax Credits ($320 billion): Ten-year expanded tax credits for utility-scale and residential clean energy, transmission and storage, clean passenger and commercial vehicles, and clean energy manufacturing.
- Resilience Investments ($105 billion): Investments and incentives to address extreme weather (wildfires, droughts, and hurricanes, including in forestry, wetlands, and agriculture), legacy pollution in communities, and a Civilian Climate Corps.
- Investments and Incentives for Clean Energy Technology, Manufacturing, and Supply Chains ($110 billion): Targeted incentives to spur new domestic supply chains and technologies, like solar, batteries, and advanced materials, while boosting the competitiveness of existing industries, like steel, cement, and aluminum.
- Clean Energy procurement ($20 billion): Provide incentives for government to be purchaser of next-gen technologies, including long-duration storage, small modular reactors, and clean construction materials.
- Affordable Care Act Premium Tax Credits: Extend the expanded Affordable Care Act premium tax credits through 2025. Experts predict that more than 3 million people who would otherwise be uninsured will gain health insurance. Also, make Affordable Care Act premium tax credits available through 2025 to 4 million uninsured people in uncovered states.
- Allow Medicare to cover the cost of hearing. Establish a hearing benefit in Medicare, a crucial benefit to our seniors for a reasonable cost.
- Housing: $150 billion investment in housing affordability and reducing price pressures, including in rural areas. Funds go towards building more than 1 million new affordable rental and single-family homes, rental and down payment assistance, and public housing.
- Education Beyond High School and Workforce Development: Reduce costs and expand access to education beyond high school by raising the maximum Pell grant, providing support to Historically Black Colleges & Universities, Hispanic Serving Institutions, Minority Serving Institutions, and Tribal Colleges and Universities, and investing in workforce development, including community college workforce programs, sector-based training, and apprenticeships.
- Earned Income Tax Credit for 17 Million Low-Wage Workers: Extend for one year the current expanded Earned Income Tax Credit for childless workers.
- Equity and Other Investments: Other targeted investments include maternal health, community violence initiatives, Native communities, disadvantaged farmers, nutrition, pandemic preparedness, supply chain resilience, and other areas.
The plan is paid for by asking the wealthiest Americans and most profitable corporations to pay their fair share. It does not raise taxes on small business and anyone making less than $400,000 per year. It will also generate economic growth that will increase tax revenue and contribute to deficit reduction.
The funding sources include:
- 15% Corporate Minimum Tax on Large Corporations.
- 1% Surcharge on Corporate Stock Buybacks.
- Stop Rewarding Corporations for Shipping Jobs and Profits Overseas.
- Global Minimum Tax: Consistent with Organization for Economic Co-Operation and Development (OECD) and with appropriate effective date for 15%, Country-by-Country.
- Penalty Rate for Foreign Corporations Based in Non-Compliant Countries (i.e. Base Erosion and Anti-Abuse Tax).
- Ask Highest Income Americans to Pay more.
- New Surtax on Multi-Millionaires and Billionaires.
- Close Medicare Self-Employment Tax Loophole by Strengthening the Net Investment Income Tax for Those Making Over $400,000.
- Continue Limitation on Excess Business Losses.
- Tax Compliance & Invest in IRS Enforcement.
- Repeal of Trump Administration Rebate Rule, which would have increased seniors’ drug premiums.
Despite the framework agreement, because the legislative text had just been introduced and there was not final agreement, votes on these measures did not occur this week. Once there is a final agreement, it will be considered in both the House and Senate. The Bipartisan Infrastructure Framework, which passed the Senate last summer, will be considered in the House. This is a fluid situation and we will update as the situation warrants.