House Passes $1.75 Trillion Reconciliation Bill
Last Friday, the House passed H.R.5376, the Build Back Better Act, by a near party-line vote. The legislation is a cornerstone of President Biden’s economic agenda and includes funding for a national paid family and medical leave program, universal preschool, child care aid, health care expansion, and clean energy incentives. Passage came after months of disagreement between moderate and progressive Democrats over the size and scope of the tax and spending package. Many provisions and programs were scaled back, shortened, nixed, or delayed in order to reduce the overall cost of the bill from $3.5 trillion to $1.75 trillion. The Congressional Budget Office estimates the legislation will add $367 billion to the federal deficit over a ten year period.
The Build Back Better Act will increase civil penalties for labor violations; provide $5.5 billion for manufacturing supply chain resilience; expand Medicare benefits and allow the government to negotiate prices for certain high-cost drugs; provide four weeks of paid family and medical leave, replacing a percentage of income up to $62,000 annually on a sliding scale; provide two years of free preschool to 3 and 4 year old children for six years; increase the SALT deduction cap from $10,000 to $80,000 through 2030; and provide $300 billion in green energy tax incentives among a host of other Democratic priorities. Several proposals were dropped from the bill during negotiations including a corporate income tax hike; capital gains rate increases and a wealth tax on unrealized gains; plans to provide for two years of free community college; and an expansion of Medicare benefits to include vision and dental coverage.
The legislation is likely to undergo further changes in the Senate as negotiations between moderate and progressive Democrats continue. Democrats hold a slim majority in the chamber due to the tie-breaking vote of Vice President Kamala Harris. Every Democrat will need to vote in favor of the bill to secure its passage against unified Republican opposition.
To become an IWLA member visit, https://www.iwla.com/become-an-iwla-member/