The Biden administration announced Oct. 28 a proposed framework for its Build Back Better initiative. After weeks of negotiations and with still more to come as details and budget language are finalized, the approximately $1.8 trillion package includes substantial federal investments for:
- Free universal preschool education to children ages three and four.
- Subsidies for child care.
- A one-year extension in the expanded child care tax credit.
- An increase in the maximum Pell Grant award.
- Assistance for low-income renters.
- Subsidies for individuals who purchase insurance through the Affordable Care Act (until 2025).
- Hearing coverage under Medicare.
- Support for in-home and in-community elder care.
- Tax incentives to increase electric vehicle manufacturing and purchase and move utilities toward solar and other renewable energy sources.
The proposal is paid for by a series of tax increases on corporations and high-income earners.
The proposal does not include other discussed initiatives, including free community college access, paid leave for workers, expansion of Medicare to include vision and dental coverage and authorizing Medicare to negotiate drug prices.
What this Means for State Leaders
While details of the bill are finalized, the Biden administration’s Build Back Better framework provides state leaders insight into how this package will impact their states. The framework relates to state and local government efforts in facilitating access to preschool, child care, postsecondary education, health care and housing security. State and local government involvement will be further clarified as the legislative language is finalized.
Bill Outlook
The proposal is being developed only by Democrats in Congress and, as such, is intended to move toward passage in the Senate and House through a budget maneuver known as reconciliation. This process allows for a proposal to pass by majority vote in both chambers, bypassing several points of congressional procedure including the need for the Senate to approve a cloture motion (i.e. to end debate on a bill), which takes 60 votes. With the Senate divided among 50 Republicans, 48 Democrats and two independents (who caucus with the Democrats), reconciliation is the only vehicle forward in the absence of Republican votes.
As the bill is finalized, it will be scored by the Congressional Budget Office to clarify the cost of the package and the revenue raised by the tax increases and other changes to ensure the bill is revenue neutral (i.e. pays for itself). The Senate Parliamentarian also will review the final measure to ensure everything in the package is sufficiently budget related (a requirement for the reconciliation process). A potential sticking point is whether proposed language related to changes in U.S. immigration policy are appropriate for reconciliation. For example, the proposal includes investments to streamline immigration processing to reduce the backlog of visa applications.
Much of the negotiation centered around whether and how the proposal will be paired with the Bipartisan Infrastructure Bill currently under consideration in the House. The Senate approved the measure in August (by a vote of 69-30), but progressive Democrats in the House have withheld support until agreement on the Build Back Better package is reached.
The Biden administration announcement came in the shadow of two important dates. First, the president leaves Thursday for Europe, where he will attend a G-20 Summit focused on climate change. Democratic leaders in Congress wanted to provide assurance to other countries of the U.S. intent to invest in clean energy initiatives. Second, voters head to the polls to elect governors in New Jersey and Virginia. Congressional Democrats wanted to produce a result, even if unsettled, before the election in an effort to boost Democratic candidate chances in the two elections, which are expected to be close. Pundits have traditionally seen the results of these two elections as indicative of the public’s mood heading into the following year’s congressional elections.
More information on the Build Back Better proposal is available here.
As with the American Rescue Plan Act passed in March 2021, analysts at The Council of State Governments will continue analyzing the Build Back Better proposal and Bipartisan Infrastructure Bill and provide to members regular updates, particularly as it relates to how funds will be distributed among state and local governments and any guidelines attached to the funding.
