Biden’s “Build back better” package is very close to passing. Senator Joe Manchin, Senator from West Virginia, has been in negotiations with Senator Chuck Schumer, to find a way to pass this bill. If it passes, it may have been stripped of very critical elements.
The bill is hated by Republicans. They will immediately point to the enormous cost of the bill. Democrats counter by saying they have closed tax loopholes in the bill so it pays for itself. At least it does as initially proposed.
Link from the White House summarizing the bill. It is a combination of many programs, including extension of child care credits, measures to combat climate change, expand health benefits, reduce prescription drugs costs and expand educational programs beyond high school. I call them the “goodies” and others would call them social benefits.
All eyes are now on Senator Kyrsten Sinema, to see if the bill passes. If Sen. Sinema goes along with the plan, the Senate would be divided 50:50, and VP Kamala Harris could vote to break the tie. The two holdouts are quite different. Senator Joe Manchin is quite vocal on what he doesn’t like in a bill, and has worked with the majority leader to find a compromise. Not so with Senator Sinema. She doesn’t talk to the press.
It appears from the trickle of news, she’s onboard with all the social benefits in the program. She is from Arizona, so unlike Joe Manchin, there is no climate change issues. (Manchin is from West Virginia, known for its coal production). It’s the self funding part of the bill. The claim of Republicans is that it would be absurd to make a massive increase in government spending at a time when the country is on the brink of recession. I admit, they have a point.
The apparent objections from Kyrsten Sinema, are the minimum tax rate of 15% for corporations and the carried forward interest provision. Many corporations have sufficient write-offs so they pay no federal tax.
See link: Sinema Seeks to Keep Private Equity Break, Curb Corporate Tax
So, as the Bloomberg article suggests, if the Democrats satisfy Sinema and reduce the applicability of the minimum tax rate, they lose Manchin. They also will be immediately shown as hypocrites, because they claimed the package was self funding.
The bill will repeal Trump’s personal tax cuts in 2017, the so-called “welfare for the rich,” where rich is defined as those with income over $400,000. So far, leaked reports are that Sinema objections are on the corporate tax benefits (or loopholes), which is still a big piece of the self-funding claim.
I don’t know if we have a “humpty-dumpty” moment, where through the compromises needed to get Manchin and Sinema onboard, we lose the vital elements of the package, one of which is the increase in renewable energy. Trump put us behind for four years, with climate change deniers and fossil fuel advocates. I hoped Biden could reverse this, and bring internation cooperation together again, as Obama was trying hard to do.
I guess the real solution is to elect a few more Democrat senators, so two senators can’t change the bill, so it does not provide what it should (Manchin’s cuts) or is not funded properly (Sinema’s cuts). The Republicans in the end, may celebrate, with a bill that does not deliver the goods, particularly in reduction of fossil fuel consumption and is not self funding. A win for oil companies and corporate America.
Global warming is here. California wildfires continue to grow. Yes, Washburn which threatened Yosemite is under control, but the McKinney fire, right on the California/Oregon border is only 10% contained, and has destroyed 57,000 acres. Horrible injuries and loss of lives with homes and wilderness destroyed.
We can do better than this.
Humpty dumpty reference:
Something beyond repair. from a children’s rhyme: Humpty Dumpty sat on a wall, Humpty Dumpty had a great fall, All the king’s horses, And all the king’s men, Couldn’t put Humpty Dumpty together again.
One thought on “The Build Back Better Plan”
Aug 5: News this morning suggests the bill is a go, with Senator Sinema onboard, after some revisions. All eyes right now are on the Senate parliamentarian to determine whether the bill meets the Senate’s budget rules after narrowing the carried interest rules. I note that Trump also hated this provision of the tax code, saying that private equity managers were “getting away with murder” because their capital gains tax is limited to 20%.