The Build Back Better Act has undergone various compromises and changes since its conception. Currently, the House-passed bill plans to make major changes to three areas: the tax system, social services, and the energy sector.
In the social spending category, there are two areas where the spending is allocated: spending to help families with children and spending on health care. In order to keep the cost of the bill down, several of these programs are set to last a limited time.
The expanded child tax credit
During the pandemic, Congress expanded the child tax credit, increasing the amount and moving distributions to a monthly basis. Credit became available to families earning no taxable income, who had previously been left out of previous antipoverty policies due to the work requirements. These changes are set to expire at the end of this year.
The Build Back Better Act aims to make the credit’s increased availability permanent. One estimate predicts this could cut child poverty in the United States by 19%. The bill would also keep the child tax credit for all but the wealthiest families, for one additional year.
The childcare plan
The bill pushes to help millions of families with children aged 6 and under to get affordable childcare by subsidizing most or all of their care at licensed providers. The bill funds this plan only for 3 years, 2025-2027. Up until 2025, subsidies will be expanded to more Americans over time. However, in 2028, the subsidies will cease.
Funding for state expansions of pre-K programs is included in the bill as well. Like the previous plan, the federal money will cease after 6 years in 2028.
The bill dictates the federal government fund paid leave for workers who become new parents or are severely ill. However, it seems likely this will not end up in the final version of the bill as the White House has agreed to drop it.
The priciest item on the bill is the $146 billion for in-home care of seniors and the disabled through Medicaid. It would also expand Medicare to:
- cover hearing benefits,
- fund subsidies which help people pay for Obamacare individual plans for a few more years,
- permit the federal government to negotiate some prescription drug prices, and
- pay for coverage for low-income individuals in states without expanded Medicaid.
A quarter of the bill’s overall spending is dedicated to green energy and other tactics to fight climate change. Most of this money will go to tax credits to incentivize clean electricity and transportation along with promoting energy efficiency for property owners. Importantly, this plan will last for the next 10 years. Spending on reducing pollution, forest restoration, and more conservation efforts is included in the bill as well. Most punitive policies toward dirty energy have been abandoned save for a fee on methane emissions associated with oil and gas production and transmission.
The Senate Democrats’ goal is to have the vote and gain approval for the bill before Christmas. Please be advised, the proposals in this article are subject to change. If you have any questions, feel free to reach out to Creative Benefits, Inc. at firstname.lastname@example.org.