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On Thursday (Oct. 28), President Joe Biden announced a new framework outlining the Democrats' $1.75 trillion social spending package. The package includes funding for expanded health coverage, affordable housing, universal pre-kindergarten and child care, clean energy and climate investments, along with other items. "After hearing input from all sides and negotiating in good faith with Senators Manchin and Sinema, Congressional Leadership, and a broad swath of Members of Congress, President Biden is announcing a framework for the Build Back Better Act," stated a White House press release. "President Biden is confident this is a framework that can pass both houses of Congress, and he looks forward to signing it into law. He calls on Congress to take up this historic bill — in addition to the Bipartisan Infrastructure Investment and Jobs Act — as quickly as possible."

The package is "fully paid for and will reduce the deficit" through various tax provisions, including a 15% minimum tax on corporate profits; a 15% global minimum tax; a surtax on the income of the wealthiest .02% of Americans; and an overhaul of tax administration. It also repeals a Trump-era drug rebate rule, which would have increased seniors' drug premiums.

As reported in recent days, the framework does not include paid family and medical leave due to opposition from centrist members, nor does it include free community college, a program aimed at pushing utilities to generate more clean energy, nor a series of top marginal tax rate increases. While it includes expanded Medicare hearing benefits, it does not include benefits for vision or dental. It also does not include drug pricing provisions aimed at bringing down the cost of prescription drugs through Medicare negotiation or inflationary rebate provisions. The package also left out a recently proposed tax on billionaires' unrealized gains, due to concerns raised by Senator Joe Manchin (D-WV) and other Democrats.

The House Rules committee, which sets the rules for bringing legislation to the House floor, is planning to meet today. The White House has been pushing Democrats to come to consensus around the slimmed down package by the end of the week, as President Biden leaves later on Thursday for Rome. A deal could also bolster passage of the Senate-passed, bipartisan infrastructure package that has been held up by House progressives, who want to see the two bills passed in tandem, or at least have a commitment on text. The House is facing a self-imposed deadline for passage of the bipartisan package along with the expiration of highway authorization on October 31, although Senate Environment and Public Works Committee Chairman Tom Carper (D-DE) said he drafted an extension if it is necessary (a longer-term, five-year reauthorization is included in the bipartisan legislation).

• For more information, see the Build Back Better Framework and press release

Summary of Spending Provisions

Child Care and Preschool

• Universal preschool for all 3- and 4- year olds (six years of funding).
• Limit child care costs for families to no more than 7% of income for families earning up to 250% of state median income, with parental work requirements (six years of funding).

Home Care

• Strengthening Medicaid home- and community-based services and improving working conditions for home health care workers.

Child Tax & Earned Income Tax Credits

• Extend for one year the current expanded Child Tax Credit, with payments for households earning up to $150,000 annually, and make refundability of the Child Tax Credit permanent.
• Extend for one year the current expanded Earned Income Tax Credit for childless workers.

Clean Energy and Climate Investments

• Ten years of expanded tax credits for utility-scale and residential clean energy, transmission and storage, clean passenger and commercial vehicles, and clean energy manufacturing ($320 billion).
• Investments and incentives to address extreme weather, legacy pollution in communities, and a Civilian Climate Corps ($105 billion).
• Targeted incentives to spur new domestic supply chains and technologies, like solar, batteries, and advanced materials, while boosting the competitiveness of existing industries, like steel, cement, and aluminum ($110 billion).
• Provide incentives for government to be purchaser of next gen technologies, including long-duration storage, small modular reactors, and clean construction materials ($20 billion).

ACA Credits, Including in Uncovered States

• Extend the expanded Affordable Care Act (ACA) premium tax credits through 2025.
• Make ACA premium tax credits available through 2025 to four million uninsured people in uncovered states.

Medicare Hearing

• Establish a hearing benefit in Medicare.

Housing

• $150 billion investment in housing affordability and reducing price pressures, including in rural areas.

Higher Ed and Workforce

• Raising the maximum Pell grant, providing support to Historically Black Colleges & Universities (HBCUs), Hispanic Serving Institutions (HSIs), Minority Serving Institutions (MSIs), and Tribal Colleges and Universities (TCUs), and investing in workforce development, including community college workforce programs, sector-based training, and apprenticeships.

Equity & Other Investments

• Other targeted investments including maternal health, community violence initiatives, Native communities, disadvantaged farmers, nutrition, pandemic preparedness, supply chain resilience, and other areas.

Immigration

• Improve our immigration system consistent with the Senate's reconciliation rules.

Summary of Revenue Provisions

15% Corporate Minimum Tax on Large Corporations

• 15% minimum tax on the corporate profits that large corporations — those with over $1 billion in profits — report to shareholders.

Stock Buybacks Tax

• 1% surcharge on corporate stock buybacks.

Corporate International Reform to Stop Rewarding Companies That Ship Jobs and Profits Overseas

• Global Minimum Tax: Consistent with OECD and with appropriate effective date for 15%, Country-by-Country.
• Penalty Rate for foreign corporations based in non-compliant countries (i.e. Base Erosion and Anti-Abuse Tax ).

AGI Surcharge on the Top 0.02%

• Apply a 5% rate above income of $10 million, and an additional 3% surtax on income above $25 million.

Close Medicare Tax Loophole for Wealthy

• Close Medicare self-employment tax loophole by strengthening the Net Investment Income Tax for those making over $400,000.

Limit Business Losses for the Wealthy

• Continue limitation on excess business losses.

IRS Investments to Close the Tax Gap

• Investments in IRS enforcement.

Prescription Drugs: Repeal Rebate Rule

• Repeal Trump Administration rebate rule.

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