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The Build Back Better Plan: Social impacts of one of the most significant overhauls of domestic policy

Posted 12.20.21 in General

The Build Back Better Plan: Social impacts of one of the most significant overhauls of domestic policy

The BBB Act builds on President Biden’s framework presented to the Democratic party, and includes new spending to enhance childcare, provide free prekindergarten, combat climate change, and advance a slew of tax benefits that primarily benefit low-income Americans. But the bill leaves out many of Democrats’ top priorities, a reflection of the party’s arduous work to scale back a package once valued at $3.5 trillion. It now moves to the Senate, where it will likely face further cuts.

Family and Children: Some of the most ambitious plans aim to ease financial burdens facing millions of American families. They include:

  • $270 billion for affordable childcare – the lowest-income families would get free child care, and families who earn up to $300,000 annually would see childcare expenses capped at 7% of their income.
  • $205 billion for paid family and medical leave
  • $190 billion for a new child tax credit
  • $110 billion for universal prekindergarten for all 3-year-olds and 4-year-olds

Healthcare: Supporters of the bill’s health-care components say it would bring about the most significant expansion of affordable care since the Affordable Care Act 11 years ago. It includes:

  • $150 billion for home- and community-based services.
  • $120 billion to extend Affordable Care Act (ACA) insurance subsidies until 2025, and to expand coverage for lower income people. Just over 12 million people had marketplace coverage as of August 2021, and the White House predicts that under the measure, an additional 3 million people would gain health insurance.
  • The ability for low-income people in 12 states (that have not expanded Medicaid) to buy ACA health plans without paying a monthly premium (thereby closing the Medicaid Gap), until 2025.
  • A new plan to lower prescription drug costs for millions of seniors on Medicare.
  • Allowing Medicare to negotiate drug prices with manufacturers for a limited class of 10 expensive drugs, including medicines for cancer patients, starting in 2025 (earlier versions of the plan allowed negotiation on 250 drugs).
  • Capping out-of-pocket spending on Medicare prescription drugs to $2,000 annually.

Taxes: The Biden administration noted that the plan would be funded in full by health care savings and these tax reforms (but it is more complicated than that – LINK TO POST #2):

  • A new 15% corporate minimum tax on large corporations, part of a broader effort on the part of the White House and Democrats to address the fact that some companies reduce their tax burdens to zero based on current programs.
  • A new tax on companies that perform stock buybacks.
  • A new tax surcharge aimed at the wealthiest Americans. The proposal would allow a new 5% rate on those with incomes above $10 million and an additional 3% surtax on incomes above $25 million.
  • A new effort to empower the Internal Revenue Service to pursue tax cheats targeting Americans at higher incomes.
  • The temporary repeal of the $10,000 cap on what state and local taxpayers can deduct from their federal taxes, a provision enacted by Republicans in their 2017 tax law.

Communities: After the coronavirus pandemic laid bare the difficulties facing seniors and communities with poor access to critical services, the plan seeks to make a significant investment in these areas:

  • $170 billion in housing assistance for lower-income Americans.
  • $65 billion will go to rebuild and repair public housing, with $25 billion aimed at federal housing vouchers to help low-income tenants afford rent, ultimately helping to reduce homelessness.
  • An additional $15 billion for the housing trust fund program to expand the stock of affordable housing for low-income families.
  • $110 billion for immigration reform, protecting nearly 65% of the undocumented immigrants in the US from deportation for up to a decade. The act’s biggest impact targets individuals from Mexico and Central America, but also includes Asia, Africa and all over the world.
  • Largescale spending to improve the nation’s transportation networks, water and power systems, and Internet connections, with spending on high-speed rail and public transit near affordable housing.
  • Spending for roads and other major projects, including a large investment in building and fixing bridges.
  • $150 billion for in-home and community-based services under Medicaid, which include services such as assistance with eating and bathing, as well as physical therapy and nursing care.
  • A 6% permanent increase in funding that the federal government gives each state for in-home and community-based services for states that create a plan for strengthening and expanding services.

Other:

  • $260 billion for spending for higher education, the workforce, and more.