President Joe Biden on Thursday announced a new framework for a social spending bill expected to total roughly $1.85 trillion.
The package, which has been pared down in size through protracted negotiations amongst the progressive House Democrat caucus and moderate Senate Democrats, has been transcribed into a nearly 1,600+ page draft.
Touching on healthcare, climate provisions, education, taxes, housing, food aid, immigration and many other areas, the bill is sprawling in size and scope.
The bill has not been reviewed by the Congressional Budget Office to score an official price tag and will not proceed through the regular lawmaking process. House and Senate Democrats are using a process known as budget reconciliation, which comes with certain rules and requires only a simple majority vote for passage. That leaves just two votes that House Democrats cannot lose and zero votes Senate Democrats cannot lose.
The framework would still need to be finalized into legislative text and passed by both chambers and signed by President Biden in order to become law.
The framework includes a 15 percent corporate minimum tax, a different 15 percent minimum tax on U.S.-based multinational companies’ foreign income, a one percent excise tax on corporate stock buybacks, a five percent surtax on adjusted gross income for individuals above $10 million and three percent on AGI above $25 million, a 3.8 percent tax on active business income for high-income business owners. It does not currently include changes to unrealized capital gains or a plan to require banks to report annual account flows to the Internal Revenue Service (IRS).
In terms of spending, the bill expands Affordable Care Act subsidies through 2025; new eligibility for Medicare recipients to receive hearing benefits; $555 billion for climate related provisions like utility-scale and residential renewable energy and electric vehicle tax credits for 10 years; $105 billion for climate mitigation efforts related to wildfires and droughts; $110 billion for U.S. supply chains to develop and manufacture renewable energy technology; federally funded preschool for three- and four-year-olds, funded for six years; a one-year extension of the child tax credit that was expanded in the most recent reconciliation bill; eligibility for childless workers to receive the earned-income tax credit for an additional year; increased the size of Pell grants; $150 billion for affordable housing including $65 billion to repair public housing, $25 billion for rental assistance, and $15 billion for the Housing Trust Fund; an expansion of free school meals during the school year and a $65-per-child monthly benefit to help low-income families purchase food during the summer; and $100 billion for immigration-related provisions.
It is unclear whether that $100 billion will be allowed to remain in the bill by the Senate parliamentarian due to the rules under the reconciliation process that require provisions to explicitly impact the federal budget. The funding is set aside for a plan to offer illegal immigrants a temporary form of deportation known as parole, which would allow them to work in the U.S. legally and could allow some immigrants with U.S. citizen family members to apply for green cards, according to the Wall Street Journal. If the parliamentarian does not allow this plan to be in the bill, the White House framework will still use the funding to improve the immigration system in other ways, such as reducing green card and visa backlogs, legal services for deportation proceedings, and hiring more asylum officers to process border claims faster.
