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Infrastructure Watch: Build Back Better Deal?

Do they finally have an “infrastructure deal”? According to the White House, yes. Last Thursday, President Joe Biden announced the long-awaited Build Back Better deal to get two infrastructure bills to his desk for his signature. Yet since then the most conservative Congressional Democrats have yet to confirm their intent to abide by the “full two-track infrastructure” promise they made to their colleagues, and progressive Democrats face renewed pressure from activists to continue holding out for a better deal.

Will Democrats find a way to Build Back Better… Or build any other big legislation at all? Here’s the latest.

Finally, there’s some official Build Back Better list of policies (and dollar amounts!) for us to analyze. Here’s what’s making the cut (so far).
Joe Biden, stimulus, Build Back Better, infrastructure, infrastructure watch
Photo by Andrew Davey

After a summer full of “infrastructure talks” that stretched well into the fall, President Joe Biden announced the Build Back Better Framework last Thursday. Basically, it goes like this: at least $1.85 trillion in new investment over the next ten years, and $1.995 trillion in new tax revenue over the next ten years. The Build Back Better investment portfolio looks like this: $555 billion for climate action, $400 billion to expand preschool and affordable child care, $200 billion to extend targeted middle- and working-class tax credits, $165 billion for health care, $150 billion for affordable housing, $150 billion for home care, $40 billion for college and workforce development, and $90 billion for some additional programs. 

The Build Back Better revenue portfolio looks like this: enforcing compliance of the new OECD global minimum corporate tax rule to raise $350 billion, a new 15% mandatory minimum top corporate tax rate to raise $325 billion, a stronger net investment income tax to close the Medicare tax loophole and raise $250 billion, a 5% income surtax on Americans with over $10 million in annual income and another 3% surtax on Americans with over $25 million in annual income to raise a combined $230 billion, a plan to curtail the writedown of “excess business losses” to raise $170 billion, the repeal of Donald Trump’s last-minute executive order on Medicare prescription drug payments to raise $145 billion, a 1% financial transaction tax targeting corporate stock buybacks that some progressive activists have campaigned for as a “Robin Hood Tax” to raise $125 billion, and plans for increased IRS enforcement to raise $400 billion.

For now Build Back Better also has $100 billion slated for comprehensive immigration reform, but it’s unclear at best whether Senate Parliamentarian Elizabeth MacDonough will budge on her opposition to immigration’s inclusion in a reconciliation bill. There’s even talk of “sidecar deals” among House Democrats to slide in a more controversial restoration of more generous state and local tax (SALT) deductions that primarily benefit a select group of high-income taxpayers should Senate Democrats acquiesce to MacDonough’s wishes on leaving immigration reform out of Build Back Better entirely. 

In his presentation to House Democrats last Thursday, and again in his publicly televised White House speech, Biden presented his Build Back Better Framework as some sort of final deal. But with so many unresolved issues – like whether or not Democrats will follow through on immigration reform, how exactly will the U.S. government conduct the carbon pricing and emissions enforcement needed to meet Biden’s own stated climate action goals, whether a select clique of House Democrats will succeed in forcing a large SALT deduction into the final bill, what to make of some progressive Democrats’ insistence that paid family leave will make it into the final package, and when the House will vote on the smaller Infrastructure Investment and Jobs Act (or “the bipartisan bill”) that directs $550 billion worth of new investment mostly into fossil fuel supporting infrastructure – it remains unclear how final this deal actually is. 

So what do we really get from this Build Back Better infrastructure deal? Let’s start with climate change.
Lake Tahoe, Tahoe Summit
Photo by Andrew Davey

As largely expected, the bulk of the climate change section of Biden’s latest Build Back Better Framework ($320 billion) goes to ten years’ worth of tax credits for renewable energy and electric cars. Another $105 billion is dedicated to environmental justice focused projects to clean up pollution that affects working-class communities of color, and to better prepare for future climate change fueled natural disasters. Another $110 billion goes to investment in renewable energy technology, such as solar panels and batteries to store more solar and wind power, and to fixing the supply chains that will be needed to accelerate America’s transition to renewables. Another $20 billion goes to government purchase plans that can act as further incentive for next gen climate-friendly technologies. 

Basically, a whole lot of this is exactly the kind of investment in “green tech” infrastructure that Governor Steve Sisolak (D) and other Democratic Governors have been hoping Build Back Better will deliver. This also amounts to the most monumental federal environmental protection effort since the creation of the Environmental Protection Agency (EPA) in 1970. However, as alluded to above, this still provides no realistic pathway to the carbon emissions reductions needed to prevent the worst-case climate armageddon that the IPCC warned about in August. 

Photo by Andrew Davey

As long as Senator Joe Manchin (D-West Virginia) refuses to back any new laws to specifically mandate emissions cuts, the Biden administration will have to rely upon executive actions in order to meet his own stated goals. The good news here is that Biden has options: Biden himself has announced new rules to curb methane emissions from oil and gas operations; EPA Administrator Michael Regan has already promised new rules on power plant emissions and auto emissions; Interior Secretary Deb Haaland has promised to continue efforts to prevent the opening of any further federal public lands for fossil fuel extraction; and Biden is hinting at potential future legislative and executive endeavors as part of his “whole-of-government approach to combat climate change” during his trip to the U.K. for the COP26 Climate Summit.

The bad news here is that the U.S. Supreme Court is taking up a lawsuit from West Virginia Attorney General Patrick Morrissey (R) that may severely curtail Biden’s remaining options for executive action on climate change should he and his co-plaintiffs succeed. As we’ve previously warned, this is perhaps the greatest risk of leaving carbon pricing out of Build Back Better: By pushing Biden to try more executive action on climate change, the conservative Democrats who wanted CEPP out of the bill are now placing a whole lot of America’s future (and the world’s, for that matter) in the hands of Justices Brett Kavanaugh and Amy Coney Barrett.

What else is in this Build Back Better Framework: Health care and “the care economy”

Another feature of Biden’s latest Build Back Better Framework is a one year extension of the American Rescue Plan’s heftier Child Tax Credit – $3,000 per year for each child over age five, and $3,600 per year for each child aged five and younger. Though the more generous tax credit sunsets in 2023, the Build Back Better Framework does permanently change the Child Tax Credit formula in a way that should make it easier for the poorest American families to secure $2,000 credits per child going forward.

In addition Biden’s Build Back Better Framework includes six years’ worth of free universal preschool, as well as child care subsidies that kick in for families earning up to 250% of their respective states’ median income and are meant to ensure that no family will have to spend more than 7% of their income on child care. Another aspect of Build Back Better that thus far has not garnered much media attention, but did get local advocates like SEIU 1107 home care workers and Senator Jacky Rosen (D) speaking up for it on the campaign trail last year, is in-home care. Though the current $150 billion for in-home care is ⅓ of the amount Biden included in his campaign plans last year, it’s nonetheless a long-awaited boost in Medicaid funding to expand in-home care to more seniors and people with disabilities, and it should provide a much needed pay raise for in-home care workers who’ve gone underpaid for far too long.

Staying on health care, the Center on Budget and Policy Priorities (CBPP) estimates that over 2,000,000 Americans will be able to sign up for Affordable Care Act (ACA) insurance marketplace health insurance plans with zero monthly premium next year. One major reason for this is Build Back Better’s inclusion of 100% ACA insurance premium coverage through 2025 for working poor Americans who’d otherwise qualify for Medicaid (up to $18,000 in annual income for a single person, and up to $30,000 in annual income for a family of three), but live in states that have thus far refused ACA Medicaid expansion. The current Rescue Plan backed expansion of ACA premium support for patients who already have health insurance through the ACA exchanges (such as our own Nevada Health Link) will also continue through 2025.

What else made it in Biden’s latest (and final?) Build Back Better proposal, what’s still in legislative purgatory, and what the hell is Joe Manchin really talking about?
stimulus, coup, Parler, terrorism, Washington D.C., Build Back Better, infrastructure
Photo by Andrew Davey

The $90 billion for additional programs includes a grab-bag of various appropriations, including $2.2 billion for farm loan assistance, $1.4 billion worth of rural development grants, $2.2 for various ocean wildlife programs, and $3 billion for Elon Musk’s oft-hyped and yet-to-be-proven-in-real-life Hyperloop (as in, more of the “Teslas in Tunnels” proposals akin to LVCVA’s contract with Musk’s Boring Company for a Las Vegas Hyperloop). In better news for Nevadans who can’t afford to travel like Elon Musk, Build Back Better still includes affordable housing programs like rental assistance, down payment aid, and maintenance for existing public housing communities. But at less than half of what House Democrats had originally planned to allocate, some states had already begun to fight each other over this smaller pool of $150 billion in housing funds. 

And yesterday, Senator Joe Manchin’s (D-West Virginia) latest cryptic diatribes about Build Back Better and the overall “infrastructure spring-summer-September-whenever” legislative process initiated a new round of speculation over whether Biden can count on either bill passing… ever. As Senator Brian Schatz (D-Hawaii) later hinted about on Twitter, this is most likely part of Manchin’s typical modus operandi of nefarious posturing until the very last minute in order to boost his own profile and drive as hard of a bargain as he can. 

Photo by Andrew Davey

But as Democrats may already be learning the hard way just across the Potomac River in Virginia, as they learned under more favorable circumstances in California in September, and as they should be noticing more often here in Nevada and in the rest of the country, Democrats must deliver the goods and do so soon in order to prove to voters that American Democracy still works. As politicians and pundits up and down Pennsylvania Avenue hone in on charts and spreadsheets, most voters just see empty rhetoric and broken promises as long as Democrats fail to deliver on what they campaigned on last year.

This might help explain why some other Democrats in Congress are focused on passing the full infrastructure package by the end of this year, it may explain why House Speaker Nancy Pelosi (D-California) continues to give progressives some hope that some more meaningful prescription drug action may yet make it into the final package, it may explain why Rep. Steven Horsford (D-North Las Vegas) signed onto a letter urging Pelosi to secure prescription drug pricing reform in the final Build Back Better deal, and it may explain why Reps. Dina Titus (D-Las Vegas) and Steven Horsford joined 41 of their fellow House Democrats from across the ideological spectrum to demand that their Senate Democratic colleagues keep comprehensive immigration reform in the final Build Back Better deal regardless of Elizabeth MacDonough’s opinion. Some Democrats near and far may now be realizing that they must deliver the goods and do so soon in order to have a decent chance of keeping their majorities next year. Sometimes, sound policy really does make for smart politics.

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