clock menu more-arrow no yes mobile

Filed under:

What’s in — and what’s out of — Biden’s latest spending proposal

The framework goes big on early childhood education and climate — while making drastic cuts elsewhere.

President Joe Biden leaves a meeting with House Democrats at the Capitol on Thursday, October 28, 2021.
Drew Angerer/Getty Images

President Joe Biden’s $1.75 trillion Build Back Better framework, announced on Thursday, is a mixed bag.

The measure — a significantly pared-down version of a $3.5 trillion budget resolution that Democrats introduced earlier this year — could be transformative. It would push many states to create a universal preschool program for the first time, spend billions on child care subsidies, and establish a new suite of tax credits to incentivize shifts to clean energy. It would also be paid for with a new 15 percent corporate minimum tax and a new surtax on millionaires and billionaires.

All this, though, falls far short of the expansive vision that Democrats originally had for the legislation, which included long-term investments in paid family leave, free community college, and Medicare coverage of dental and vision services. Because Democrats need all 50 of the caucus’s senators on board to pass the bill via budget reconciliation, significant cuts have been made in the framework to assuage moderate Sens. Joe Manchin (D-WV) and Kyrsten Sinema (D-AZ).

At this point, it’s not clear if this framework is even a deal, as the White House claims. Many initiatives progressives backed aren’t in the White House proposal, nor do all of Manchin and Sinema’s concerns appear to be addressed. In the end, this framework could just be another attempt by Biden to put a stake in the ground while key divisions remain unresolved.

Here’s a look at what’s in the framework — and what got cut.

Chart tallying Biden’s proposals Tim Ryan Williams/Vox

What’s in the framework

Climate: $555 billion

The framework outlines major investments in the fight against climate change, particularly in three of the country’s biggest polluting sectors: transportation, electric power, and industrial manufacturing. The White House outlined about $550 billion for climate spending, retaining most of the funds from its original plan — but in a different form.

Now, $320 billion would go to a decade of tax breaks for clean energy and electric vehicles. That includes investments in transmission (to connect more communities to clean power across long distances) and battery storage (when there is no sun or wind). The framework also includes $105 billion to make communities more resilient to climate disasters and reduce pollution in low-income communities of color.

Democrats depend on Manchin’s vote, so the new outline has stripped two important programs he opposes. One of them, the Clean Electricity Payment Program — which would have paid utility providers if they match clean energy standards and fined them if they didn’t — was one of the most significant climate policies ever considered in Congress. The other is a fee on methane, an extremely potent greenhouse gas.

Even without these programs, Democrats are proposing historic investments in access to clean energy. But their outline may do far less to curb fossil fuel production, and Biden will also have to rely on strong regulations and state action if he wants to meet his climate goals.

Universal pre-K and child care subsidies: $400 billion

Some of the framework’s biggest investments are in early childhood education and child care, which have stayed more intact in this proposal compared to other policies.

The framework includes funding covering free preschool for all 3- and 4-year-olds, which will last for six years. Right now, a handful of states, including Vermont and Florida, offer some form of universal pre-K, but many do not. (Ultimately, this measure would allocate federal money for implementing these programs, though states would have significant leeway in how to use it.)

It also contains substantial funding to help families cover the costs of child care, which will also last for six years. Under this policy, families making up to 250 percent of a state’s median income would not have to pay more than 7 percent of their annual income on child care.

Expanded child tax credit and other credits: $200 billion

The Build Back Better Act would take the increased amounts for the child tax credit established in Biden’s stimulus package earlier this year — $3,000 per year for kids over 5, $3,600 per year for younger kids — and extend them for one year, after which the amount would revert to $2,000 per year for all children.

Importantly, the act would make the full refundability of the credit established in the stimulus package permanent. Before that legislation, people with no cash earnings were excluded from the credit, and it phased in slowly for the poorest families, topping out at $1,400 per child for families too poor to owe income taxes (compared to $2,000 for richer parents). That greatly reduced the ability of the credit to cut poverty.

Under Biden’s plan, the poorest parents would still get $2,000 per year per child in 2023 and after, up from zero dollars under previous law.

Health care: $165 billion

The health section of the scaled-back Build Back Better Act focuses primarily on improving the Affordable Care Act.

The framework announced on Thursday would extend private insurance subsidies to more middle-class people who purchase coverage individually through the law and expand the subsidies for people who already receive them. The bill would also make people left uninsured because their state has refused the ACA’s Medicaid expansion eligible for cost-free private insurance on the law’s marketplaces. Those new subsidies would expire after 2025.

Lastly, Democrats are creating new hearing benefits under Medicare, where most beneficiaries do not currently have access to such benefits.

Housing: $150 billion

The framework includes funding for rental and downpayment assistance as well as money to help address longstanding maintenance issues that public housing units have faced.

As Vox’s Jerusalem Demsas has reported, however, these policies don’t address the US’s core problem, which is a lack of housing supply. While the Biden administration claims that the framework would help contribute to the construction or improvement of 1 million affordable homes, that’s a far cry from the 3.8 million new homes needed to address the current need.

Long-term home care: $150 billion

The framework includes a boost in funds for Medicaid’s long-term home care program to help seniors and disabled people afford these services. The funding is also intended to provide better wages for home health aides and address a staffing shortage that currently exists.

Immigration: $100 billion (maybe)

Democrats have tried to use budget reconciliation to approve a pathway to citizenship for DACA recipients, front-line workers, and Temporary Protected Status visa holders. The Senate parliamentarian — who governs what policy can and can’t be made via reconciliation — has ruled against this, however.

The parliamentarian could rule against additional immigration provisions as well, which is why the $100 billion is marked as tentative funding to be added on top of Biden’s $1.75 trillion framework. Democrats intend to pitch other alternatives, including reforms that address the legal immigration visa backlog, the New York Times reports.

What the White House framework cut out

Paid family leave

A longtime Democratic priority, paid family leave was cut due to Manchin’s concerns that such programs are overly burdensome for businesses, a claim researchers have pushed back against. Biden’s original proposal would have guaranteed 12 weeks of paid parental and sick leave that enabled people to care for a new child or sick family member. While a number of states have implemented their own paid leave programs, the US is still the only industrialized country in the world that doesn’t have a federal policy.

Medicare negotiation of drug prices

Democrats appear to have scrapped a plan to force drugmakers to negotiate drug prices with Medicare based on the lower prices other wealthy nations pay. That prescription drug reform was supposed to generate up to $700 billion in savings to pay for other health care proposals, particularly the addition of dental and vision benefits to Medicare.

Expanded Medicare coverage of dental and vision

Without the savings from prescription drug negotiations, the Medicare expansion of coverage for dental and vision services has also been cut out of the framework announced by the White House. A key progressive demand, this proposal would have enabled seniors to get Medicare coverage for dental and vision care, both pricey services that will now be left out. About half of Medicare beneficiaries have no dental coverage and haven’t seen a dentist in the last year. Some progressives have said they will continue to push for this to be included in the final bill; whether they will be successful is in doubt, however.

Free community college

Biden’s original plan guaranteed two years of tuition-free community college to all students who were interested in the program, a policy that about 20 states currently have. This proposal would have helped reach students in places that don’t already provide this service. Access to free community college has been found to increase both students’ likelihood of attending four-year institutions and higher education, broadly.

Increases to the top corporate tax rate

One of the main revenue raisers Democrats initially suggested was increasing the corporate tax rate from 21 percent to 26.5 percent, a proposal staunchly opposed by Sinema. In lieu of implementing this policy, Biden’s framework includes other changes to the tax code, including a new corporate minimum tax rate, a tax on stock buybacks, and a new surtax on millionaires and billionaires.

What comes next in the reconciliation negotiations

Congressional Democrats have struggled to reach an agreement on the budget reconciliation bill in recent weeks — and there’s no guarantee that they’ll get on board with Biden’s framework.

“I wish I could say yes, but there’s a great deal of uncertainty within the caucus as to what’s contained in the deal,” Sen. Dick Durbin (D-IL) told CNN’s Ali Zaslav on Thursday. Earlier this week, Senate Democrats were still divided over numerous provisions, including Medicare expansion, revenue raisers, and paid family leave. Those divisions remain, and similar concerns are present in the House. While Democratic leaders appear hopeful lawmakers will simply go along with Biden’s approach to these provisions, that appears unlikely.

Though it may not unify his party, Biden’s framework does enable him to show where he stands ahead of his departure for the UN climate summit in Glasgow. The president had pushed lawmakers to get an agreement by the end of the week, so he’d be able to highlight the US’s leadership on climate investments.

It’s also important to remember that Biden’s framework is just that: The actual reconciliation bill isn’t written yet. If congressional Democrats are willing to move forward with Biden’s plan, the next steps will be fleshing the legislation out in the coming weeks. That would likely involve some changes to what the White House released today.

Leaders remain under pressure to find a solution to the party’s impasse. Progressives have kept up their demands to pair a vote on the reconciliation bill with a vote on the infrastructure bill. The infrastructure bill is ready, but the current lack of reconciliation bill text means that both votes will likely take place later this fall.

Thursday’s announcement could get lawmakers closer to final votes, but only if it represents a deal with broad support and not just more messaging from the White House.