What Biden's companion bills can do for the American people

Biden’s Infrastructure Bill finally passed the House of Representatives late on Friday night, November 5, and, as I write, has headed to his desk for signing and enactment. Truly a bipartisan effort with the backing of more than ten Republicans, it shows that this President can deliver on his promises to the American people, as he did with the American Rescue Plan last spring. The approximately $1.2 trillion Infrastructure bill includes major funding for repair of roads, bridges, and highways; expansion of passenger and freight rail; revamping of the nation’s drinking system; and repair and building of its power grid. It also supports climate change initiatives including the development of electric vehicles and charging stations, as well as measures to help vulnerable states and communities deal with the effects of climate change.

Above all, Biden considers the Infrastructure Bill a blue-collar blueprint to rebuild America that is long overdue. “For all you at home who feel left behind and forgotten in an economy that’s changing so rapidly — this bill is for you,” the President said. “The vast majority of the thousands of jobs that will be created do not require a college degree.” Former Pennsylvania Governor Ed Rendell called it “a game-changer for the country: The first comprehensive infrastructure plan we’ve had since Dwight D. Eisenhower created the interstate highway system” in the 1950s. (Quotes from Washington Post).

Now that the Infrastructure bill has passed, Congress will return to its companion bill, the Build Back Better (BBB) Act, which contains social safety net, education, and climate protection provisions, as well as new tax provisions that will ensure that the very rich and billionaire corporations pay at least a portion of their fair share of its now estimated $1.7-$1.8 trillion costs.

The social safety net provisions of BBB would help middle class and poor families and children be healthy and flourish. They include funding for the following:

Extending the expanded child tax credit for one year, through 2022. The program provides a monthly child cash allowance of $300 per child under 6 years old and $250 for each child between 6 and 17. The BBB Act would also make the refundability of the tax credit permanent.

Continuing the American Rescue Package’s expanded earned-income tax credit for 17 million low-wage workers. According to New York Magazine’s “Intelligencer,” a large body of sociological research shows that providing cash assistance to low-income families improves their children’s later life outcomes.

Expanding funding for child-care centers so that families of four earning less than $300,000 per year would pay only up to 7 percent of their income on child care. This would expand child-care access to about 20 million children under 6 years old.

Providing free universal pre-K, authorized for six years. This would be the largest expansion of American public education in a century, according to New York Magazine.

Continuing through 2025 the increased federal subsidies for Affordable Care Act (ACA) marketplace health plans. Begun under the American Rescue Plan, these subsidies have saved about 9 million people each about $600/year.

Offering ACA subsidies to the roughly 2.2 million people in the Medicaid Coverage Gap in the dozen states that haven’t expanded Medicaid.

Ensuring continuous coverage of children under CHIP in Medicaid.

Expanding Medicare to cover hearing. (Vision and dental were cut, although they are already included in many Medicare Advantage plans.)

Expanding home-based services through Medicaid coverage for seniors and people with disabilities and reduce backlogs for care. It would also increase benefits for caregivers.

One health provision that was cut earlier in the bill to reduce costs may reappear: allowing Medicare to negotiate drug prices with drug providers. This has long been a contentious issue between the public and Big PHARMA. The provision has been stalled largely because too many legislators receive considerable financial support from the drug industry and do not want to cross them. But the provision is being reworked to be more palatable to all concerned and may reappear in a slightly watered-down form. If it goes through, it would save Medicare, as well as seniors, a substantial amount of money.

BBB legislation would also increase federal funding for affordable housing, college scholarships, and free school meals. Having a home is critical to people’s health and wellbeing. Roughly $150 billion would be allocated to build or rehab 1 million affordable homes, and additional aid would provide rental assistance and help for first-time home buyers.

The BBB would invest $555 billion over the coming decade in climate change mitigation, focusing on decarbonization. In addition to tax incentives for companies and individuals, the investment includes a new Civilian Climate Corps. Roughly 300,000 young people would be hired to restore forests and wetlands and guard against the effects of rising temperatures.

Even with substantial cuts that have been made to the originally $3.5 trillion bill, these social safety net and climate provisions represent a robust package, especially for the American people.

How will they be paid for?

Most Americans want the rich to pay their fair share of taxes. The latest version of BBB includes changes to taxation that would ensure that a sizeable portion of the cost of the Act will be paid via the following taxes on the rich (Washington Post, Oct. 28):

A new 5 percent surtax on income above $10 million and an additional 3 percent surtax on income above $25 million.

A corporate minimum tax of 15 percent on corporations that are worth a billion dollars or more.

A global minimum tax of 15 percent on foreign profits of U.S. corporations, to curb multinational corporations from shifting profits overseas.

Funding for the Internal Revenue Service to crack down on wealthy tax cheats.

A one percent tax on stock buybacks.

The Joint Committee on Taxation released its estimate that these proposed tax increases would raise about $1.5 trillion over a decade (The New York Times).

A new report from Moody’s Analytics affirms that the current BBB package would “strengthen long-term growth and help lower- and middle-income Americans.” Rather than creating debt, it would pay for itself. “Concerns that the plan will ignite undesirably high inflation and an overheating economy are overdone.” Together, Moody projects, the two measures (BBB and Infrastructure) will add 1.5 million jobs per year and increase GDP by nearly $3 trillion relative to the baseline in the next decade. As Moody’s report concludes:

“The nation has long underinvested in its infrastructure and social needs and has been slow to respond to the threat posed by climate change, with mounting economic consequences. Failing to pass this legislation would diminish the economy’s prospects.”

Jeanne Duffy, Ph.D., has served as a college professor, an analyst and project manager for several large companies, and a college administrator in charge of foundation and government support. She is current chair of Gettysburg Democracy for America’s healthcare taskforce.