With President Joe Biden's first presidential term comes to an end, let's flash back to the beginning of 2022: at Biden's Build Back Better Act. I'm sure most of you have heard of Build Back Better. But how many of you actually know what it is or what impact it will have on us? Dive into a brief explanation how to perceive the bill.
The following article is from Daria Figlus' article January 2022 "Build Back Better Act." She wrote the article for Baldwin's Bullseye: The Student News Site of Baldwin School Puerto Rico. Please note that there have been minor edits to the text to match up to todays' developments.
James Roosevelt Jr., FDR’s grandson, said we have a new New Deal on our hands: The Build Back Better Act. Some say it might ruin the economy of our country. No matter what you think of it, the spending bill will impact all our lives as we go out into the world, therefore, we should know what the Build Back Better Act is.
What is the Build Back Better Act?
The Build Back Better Act is a social safety net expansion plan proposed by President Joe Biden. The plan aims to invest in social programs, such as education, childcare, and health care, and invest in measures to fight the climate crisis. As a social safety net expansion plan, the main goal of the act is to improve the lives of families and individuals of the working class in the United States of America. The spending bill calls for around 2 trillion dollars to be invested in different areas.
The bill currently invests in fighting for climate change, institutes universal preschool programs, expands medicare, and extends the child tax credit. It also invests in paid family and medical leave, education, housing provisions, and reforming immigration in the United States. Additionally, it includes a state and local tax deduction, one of the measures instituted to ensure moderate Democrats vote for the act.
The House of Representatives passed the Build Back Better Act on Friday, November 19th, 2021. With a vote of 220 to 213, all Republicans opposed the bill. (...) The senate had a 50-50 vote, with Vice President Kamala Harris' final vote ultimately passing the bill.
According to President Biden and the authors of this bill, the spending would not result in inflation, which is always a concern with large spending bills, because the Build Back Better Act will be paid for. Among the measures in the Act, a change in corporate taxes will bring in more revenue on the domestic and global stages, and wealthy Americans will see an increase in their taxes as well. Additionally, the spending bill includes investing in the IRS to ensure all Americans are rightfully paying their taxes.
However, (...) an investigation by the Congressional Budget Office led by Republicans showed that if the provisions did not have expiration dates, the legislation would cause an increase in the deficit by $3 trillion in the next ten years. Democrats, on the other hand, are saying that there will be expiration dates to all provisions and ensured the spending is paid for.
A large part of the bill that is a point of controversy is a tax deduction. This deduction, known as a SALT (state and local tax) cap, was reduced during the Trump administration. To appease moderate Democrats and get them to vote for the bill, the restoration of this tax deduction was placed in the legislation. This tax cap limits the amount of local and state taxes one can deduct from federal taxes. By raising the limit, there would be less revenue for the federal government through taxes. Many progressive democrats are vehemently against this tax deduction, considering it benefits primarily wealthier individuals. Many are also saying that this tax deduction is one of the most expensive provisions within the bill.
Because of the complexity of the bill and the strong Republican opposition to the Build Back Better Act, Democrats needed to pass and enact the act through reconciliation, which means it would pass in the Senate with only Democratic support. Thus, the proponents of the bill worked hard to appease progressive and moderate Democrats.
How would this impact you?
(...) If the bill were not paid for, and either the expiration dates lengthen or the plans Democrats have for paying for the bill fall through, then there would have been inflationary pressure. Inflation would cause the purchasing power of individuals in this country to decrease and prices to increase. Inflation hurts those with fixed wages, lenders, and those who have cash savings, among others. Our economy might fall into a recession if the government does not do something to rectify the inflation if it happens.
However, the bill is paid for (...) and it continues successfully (...) ensuring that people, especially in the working class, will have security with their jobs, children’s education, health care, and housing. There are going to be major structural changes to the way people live, as the provisions such as the universal pre-K and child tax credits will give the working class the security they need. More action will be taken in the fight against climate change, and hopefully this will result in improvements and bring us closer to saving the world from global warming. If the bill does not cause inflation to increase, and the provisions are successful, there would be an economic security blanket for us in case we need it. That being said, Congresswoman Jan Schakowsky states that "the Build Back Better Act lowers costs and fights inflation because it is fully paid for by making big corporations & the wealthiest pay their fair share."
In conclusion, this bill changes the way people live.
Disclaimer: Included is the information I [, Daria,] felt to be relevant. However, there is much more information on the Build Back Better Act and there will continue to be more in the future. If you’d like to learn more, please research! Politics are ever-changing and this article is just one timestamp of the framework of this act.
Bibliography
Franck, Thomas. “Wall Street Economists Are Confident Biden’s Build Back Better Bill Will Become Law – and Boost Infrastructure Firms.” CNBC, 7 Dec. 2021, www.cnbc.com/2021/12/07/wall-street-believes-biden-build-back-better-bill-will-become-law.html.
Holtz-Eakin, Douglas Opinion Contributor. “Build Back Better Is Poor Policy Built on a Shaky Fiscal Foundation.” TheHill, 19 Nov. 2021, thehill.com/opinion/white-house/582339-build-back-better-is-poor-policy-built-on-a-shaky-fiscal-foundation.
Luhby, Katie Cnn Lobosco And Tami. “Build Back Better Bill: 10 Things You Didn’t Know – CNNPolitics.” CNN, 8 Dec. 2021, edition.cnn.com/2021/12/07/politics/biden-build-back-better-spending-bill/index.html.
Melissa, Melissa, and Kathryn Watson. “What’s in Democrats’ $1.75 Trillion Social Spending and Climate Bill?” CBS News, 18 Nov. 2021, www.cbsnews.com/news/bill-build-back-better-spending-bill-contents.
Pettinger, Tejvan. “Who Are the Winners and Losers from Inflation?” Economics Help, 8 Oct. 2021, www.economicshelp.org/blog/145181/inflation/who-are-the-winners-and-losers-from-inflation.
Raju, Lauren Cnn Fox And Manu. “CBO Issues Score on How Much Build Back Better Would Cost If Programs Were Permanent – CNNPolitics.” CNN, 11 Dec. 2021, edition.cnn.com/2021/12/10/politics/build-back-better-cbo-score/index.html.
Roosevelt, James, Jr. “Build Back Better Is a 21st Century New Deal.” TheHill, 20 Nov. 2021, thehill.com/opinion/white-house/582443-build-back-better-is-a-21st-century-new-deal.
“Summary of Cost Estimate for H.R. 5376, the Build Back Better Act.” Congressional Budget Office, 18 Nov. 2021, www.cbo.gov/publication/57627.
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