House approves $1.85 trillion spending bill to expand social programs
WASHINGTON (CN) — After months of political negotiations and a record-breaking speech by House Minority Leader Kevin McCarthy that delayed the vote, the House on Friday morning narrowly passed a $1.85 trillion spending package that marks the most profound and sweeping attempt to expand the American social safety net in decades.
Only one Democrat dissented as House Democrats banded together to push the legislation on to the Senate, a day later than originally scheduled after McCarthy delayed proceedings with an 8 1/2-hour speech that went past midnight. The final vote tally Friday was 220-213.
Together with the $1.2 trillion infrastructure bill that was signed into law by President Joe Biden earlier this week, the Build Back Better Act represents a hallmark of President Joe Biden’s campaign and first-term agenda. Biden had initially envisioned them as one, but political tensions divided what was a more than $3 trillion plan to overhaul American infrastructure.
“Under this dome for centuries, members of Congress have stood exactly where we stand to pass legislation of extraordinary consequence in our nation’s history and for our nation’s future,” Speaker of the House Nancy Pelosi said Friday. “With the passage of the Build Back Better Act, we, this Democratic Congress, are taking our place in the long and honorable heritage of our democracy with legislation that will be the pillar of health and financial security in America.”
The economic plan includes substantial investments in education, including free universal preschool and an increase in funding for Pell grants and historically Black colleges and universities.
Aiming to reduce the cost of child care, the package provides six years of funding for a federal program that lowers the cost of child care to 7% of a household’s income.
The plan also offers a one-year extension on child tax credits, which became a lifeline for many families during the Covid-19 pandemic, providing $300 a month to families making up to $150,000 annually.
By way of $555 billion in tax breaks to expand the use of clean energy and electric vehicles, the historic package touts the largest financial commitment to fighting climate change in American history — a substantial accompaniment to the previously passed infrastructure bill’s $500 billion investment in clean energy.
Health care is another major focus of the more-than-2,000-page legislation, which limits the price of insulin to $35 a month, expands Medicare coverage to include hearing benefits and allows Medicare to negotiate the price of drugs with pharmaceutical companies.
The package underwent near-constant revisions for months, with lawmakers delaying a vote multiple times and Democrats adding substantial new policies to the legislation just this month including paid family and medical leave as well as work permits for immigrants without legal documentation.
Drafts of the legislation raised concerns throughout the process from moderate Democrats and condemnation from Republicans worried about both the scope of the bill and its hefty price tag.
The majority of the legislation will be paid for through with higher taxes for people making more than $10 million a year, as well as a 15% minimum tax on large corporations and an increase in pressure by the IRS on people who have not paid taxes.
The House planned to vote on the Build Back Better Act earlier this month, but agreed to delay a vote until the final version of the bill had received a score from the Congressional Budget Office to determine the official revenue and cost of the bill.
The CBO released a final price estimate for the bill ahead of the vote Thursday, determining that it would increase the deficit by $160 billion over 10 years, a finding in slight conflict with the White House’s assertion that the legislation paid for itself.
The key difference between CBO and White House numbers came down to the legislation’s reliance on revenue from heavier enforcements by the IRS on people not paying their taxes. The CBO estimates that heavier enforcements by the IRS could generate $207 billion in revenue, while the White House asserts that number to be higher, claiming the legislation would lower the deficit by $112 billion.
Despite the discrepancy, moderate Democrats united with their party to support the legislation.
One aspect of the legislation, known as the SALT provision, has drawn criticism from populist Republicans as well as some Democrats. Representative Jared Golden of Maine was the sole Democrat to vote against the bill in the House because of the SALT provision.
The provision raises the limit on the amount of state and local taxes people can deduct on their federal tax returns from $10,000 a year to $80,000 for the next 10 years. Democrats have defended the provision as a way to avoid people being double-taxed, but it has also been criticized as a tax break for high income earners.
Pelosi said, during a news conference on Thursday, that the tax provision is “not about tax cuts for wealthy people.”
“It’s about which states get the revenue that they need in order to meet the needs of the people, and that is a fight that I will continue to make,” Pelosi said.
Republicans have also criticized the scope of the legislation, slamming it as an overextension of the federal government’s authority.
During his lengthy diatribe on the House floor Thursday night, McCarthy compared the legislation to Soviet Union politics and claimed its provision offering work visas to some undocumented immigrants would bring criminals into the United States.
“I guarantee you that, no matter the time frame, all the new Washington spending in this bill is only the beginning of disaster being struck upon us,” McCarthy said. “If I sound angry, I am.”
As the legislation makes its way out of the lower chamber, its future in the Senate remains murky, although Pelosi expressed confidence in its passage.
Democrats need all party members in the Senate on board to pass the legislation by a vote of 51-50, with Vice President Kamala Harris casting the deciding vote. Whatever version of the bill the Senate potentially votes on will likely include cuts to the House version of the bill in to placate moderate Democrats in the Senate who are still on the fence about the massive legislation.
Senator Joe Manchin, a Democrat from West Virginia, and Senator Kyrsten Sinema, a Democrat from Arizona, have been holdouts for months and remain cagey about whether they will support the Build Back Better Act in the Senate where every vote is critical.
Manchin has raised concerns about whether the legislation would increase inflationary pressures despite the White House referencing assurances from 17 Nobel Prize-winning economists that the package would lower rates of inflation over its 10-year time frame.
Pelosi said that regardless of what changes the Senate makes to the legislation to appease centrists, the bill will still be a major accomplishment.
“The Senate will act its will on it. But whatever it is, it will still be transformative and historic,” Pelosi said.
Senate Majority Leader Chuck Schumer spoke on the Senate floor Thursday, expressing his commitment to transforming the mammoth legislation into law.
“Creating jobs, lowering costs, fighting inflation, keeping more money in people’s pockets, these are things Americans want and what Americans need and it’s what Build Back Better does,” Schumer said. “We are going to keep working on this important legislation until we get it done.”
The timeline for a Senate vote is likely to drag out, with Congress also looking to grapple with government funding and the debt ceiling after they return from the Thanksgiving holiday.