Update on The Build Back Better Act
House and Senate continue work on historic investments in infrastructure, education, public services, environment, and economy
This page Summarizes the PRovisions of the Fiscal Year 2022 Budget Reconciliation Bill, the ”Build Back Better Act.”
This September, Congressional Representatives and Senators working to advance a fiscal year 2022 budget reconciliation package that invests up to $3.5 trillion over 10 years in physical, social, and innovation infrastructure. This legislation, called the Build Back Better Act, is being crafted to include significant parts of President Biden’s American Jobs Plan and American Families Plan and supports domestic manufacturing and R&D, resilient supply chains, affordable housing, advanced energy infrastructure and policies, education, healthcare, childcare, paid leave, labor law enforcement, and more.
Through the budget reconciliation process, both the House and Senate can advance the legislation through a simple majority. Typically, legislation in the Senate requires a procedural vote that needs a 60-vote supermajority to close debate before a bill can advance to a floor vote. If passed by the House, the legislation is expected to move through the Senate committees and finally to the Senate floor. After 20-hour Senate floor debate that cannot be obstructed by the 60-vote filibuster rule, the bill would move to a “vote-a-rama” amendment process where proposed amendments that are germane to the bill will be voted on without debate.
The budget reconciliation process moved forward on August 11 when the Senate passed a budget resolution — titled “S.Con.Res. 14, A Concurrent Resolution on the Budget for Fiscal Year 2022.” The House of Representatives passed Senate Continuing Resolution 14 on August 24.
Twelve committees in the House of Representatives have worked with corresponding committees in the Senate as well as the White House to craft legislative text for the Build Back Better Act.
Currently, House and Senate leadership, committee chairs, and the White House are conferring and continuing to work on a Build Back Better bill that will have a majority of votes to pass the House and at least 50 votes (plus the vote of the Senate President/Vice President Kamala Harris) to pass in the Senate.
IFPTE Supports the Two-Tracks for Infrastructure Investment: The Bipartisan Infrastructure Investment and Jobs Act and the Build Back Better Act Budget Reconciliation Bill
On August 10, the Senate passed the bipartisan $1.2 trillion Infrastructure Investment and Jobs Act (H.R.3684) which includes a significant $550 billion in new infrastructure funding and includes necessary reauthorizations for surface transportation, water, and energy infrastructure.
Because the scale of our infrastructure deficit is so vast and the improvements needed to address future pressures on our infrastructure systems are so great, IFPTE advocates for the passage of both the bipartisan Infrastructure Investment and Jobs Act and the Build Back Better Act. Both bills compliment each other to make necessary investments in transit systems and transportation, energy, and the creation of high quality jobs across all parts of the U.S. economy. The Build Back Better Act also includes a robust set of tax reforms to make our tax system fairer for working people and to end incentives that encourage offshoring jobs and tax-dodging.
Read about IFPTE’s advocacy for Infrastructure legislation here.
Read the Economic Policy Institute’s report, “‘Build Back Better’ Agenda Will Ensure Strong, Stable Recovery in Coming Years,” which explains how both bills support millions of jobs in manufacturing, construction, caregiving, and the green economy.
Learn about the Build Back Better Act:
Tax Reform & Revenue Raisers
Labor Law & Workforce Development
Education
Innovation,
R&D, Manufacturing
Energy, Climate, Environmental Remediation
Transportation
Health Care
Child Care
Housing
Tax Reform and Revenue Raisers
Corporate Tax Rate – increases top rate to 26.5%. The 2017 Tax Cuts and Jobs Act the top corporate rate from 35% to 21%. [Ways & Means]
Global Intangible Low-Tax Income Tax (GILTI) and Base-Erosion and Anti-Abuse Tax (BEAT) — increases GILTI rate to 16.56%, and reforms BEAT to reduce tax-dodging and profit-shifting incentives.
Enhanced IRS Enforcement — $79 billion increase in IRS enforcement to stop corporate and wealthy tax evaders, with focus on individuals and entities with incomes over $400,000.
Restores Top Individual Tax Rate — reverses the Tax Cuts and Jobs Act of 2017’s reduction of the top individual rate and restores it to 39.6% for individual incomes over $400,000 and for couples’ income over $450,000.
Capital Gains Tax Increase for Certain High Income Individuals — Increases the highest rate on long-term capital gains to 25% from current 20%, but the new top rate applies to only the highest tier of earners. The vast majority of tax filers reporting long-term capital gains and dividends would continue to pay zero or 15%.
Millionaire Surcharge — applies 3% tax on incomes over $5 million, affecting less than 0.04% of taxpayers while raising $127 billion
Reforms High-Income Pass-Through — the existing 20% deduction for owners of pass-through businesses is capped at $500,000 of deduction value for married filers.
Labor
Labor Law Enforcement
Increased fines for unfair labor practices (ULPs) committed by private sector employers who violate National Labor Relations Act (NLRA). Penalties can be fined up to $50,000 per violation and $100,000 per violations by repeat offenders who fire or cause serious economic harm to employees. [Ed. & Labor Committee]
Gives the National Labor Relations Board (NLRB) authority to determine if an employer’s directors or officers are personally liable for ULPs. [Ed. & Labor]
Allows National Labor Relations Board (NLRB) to fine employers for hiring permanent strike replacement workers, holding captive audience meetings, or willfully misclassifying workers in order to deny them NLRA coverage. The NLRB could investigate these violations and require civil monetary penalties but cannot require the employer or individual to cease and desist from the prohibited behavior unless Congress passes additional labor law reform legislation (enforceable ULPs would likely violate the Byrd rule which outlines whether a legislative provision can be included in a budget reconciliation bill). [Ed. & Labor]
Over $1.9 billion over five years for various Department of Labor subagencies, including $707 million for OSHA and $405 billion for DOL-Wage and Hour Division. Other subagencies receiving additional funding include Employee Benefits Security Administration, Office of Federal Contract Compliance, Office of Worker Compensation Program, and Mine Safety and Health Administration. [Ed. & Labor]
$350 million over five years for NLRB, including up to $5 million to implement electronic voting for union representation election. [Ed. & Labor]
Trade Adjustment Assistance (TAA) and Workforce Development
Reauthorizes TAA through 2028 and expands eligibility and funding to provide the workers who lose their jobs because of unjust trade policies have additional tools and support as they seek reemployment. [Ways & Means Committee]
$80 billion for workforce development through Workforce Innovation and Opportunity Act grants including funding for adult worker employment and training, youth employment training, industry and sector partnerships, and improvements to workforce and labor market information systems. Industry-targeted recruitment and training funding includes $1.5 billion for direct care workforce, $2 billion for community service focused on environmental resiliency and remediation, [Ed. & Labor]
Education
$82.2 billion in grants to rebuild schools, including $1,3 billion to states in first year to develop plans to address urgent and long-term public school infrastructure needs as well as create competitive grant process for local educational agencies that targets the highest poverty school districts.
$45.5 billion to provide tuition-free community college in participating states and tribal colleges. States with any leftover funding after waiving community college tuition for all eligible students are required to spend remaining funding to provide need-based financial aid, reduce unmet need at public four-year institutions, improve student outcomes, or expand access to dual enrollment programs. [Ed. & Labor]
$4 billion added to the Emergency Connectivity Fund to ensure students, schools, and library patrons have internet connectivity. [Energy & Commerce]
Funds seven years of universal preschool through licensed care programs, Head Start grantees, and local education agencies. Department of Education and Health and Human Services will collaborate to establish and deliver inclusive, mixed deliver, and free universal preschool. $2.5 billion is set aside annually for improving compensation of Head Start educators and staff. [Ed. & Labor]
Investments in free school meals to reach an additional 9 million children, allows states to directly certify eligibility for free and reduced cost meals for children enrolled in Medicaid, invests $1.3 billion in school kitchens and health food demonstration projects in order to increase food safety and provide healthier meals. [Ed. & Labor]
Innovation and R&D
$4 billion for NASA to fund repair, recapitalization, and modernization of physical infrastructure and facilities. [Science, Space, & Technology Committee]
$10 billion for the Department of Commerce to monitor critical supply chains and ensure resiliency and protect critical manufacturing capabilities. [Energy & Commerce]
For historically black colleges and universities, Tribal colleges and universities, and minority-serving institutions, $2 billion is provided to improve research and development infrastructure. [Ed. & Labor]
$3 billion to establish Advanced Research Projects Agency for Health (ARPA-H). [Energy & Commerce]
Energy, Climate and Environmental Remediation
Infrastructure
$9 billion in investment to develop a national energy grid, federal-level transmission planning, grants to states with sitting transmission projects, and funds to modernize critical transmission systems for climate mitigation, reliability, efficiency, and lowering consumer costs. [Energy & Commerce]
$27.5 for state, local, and nonprofit financial institutions to fund greenhouse gas reduction efforts. [Energy & Commerce]
$2.5 billion for community solar projects for low-income households and affordable housing communities. [Energy & Commerce]
$5 billion for community environmental justice grants to decrease pollution and undertake climate change mitigation projects. [Energy & Commerce]
$10 billion for cleaning up Superfund sites. [Energy & Commerce]
Tax Credits and Incentives for Reducing Carbon Emissions
Prevailing wage requirement, 55% domestic content requirement, and construction apprenticeship requirements for claiming “bonus rate” renewable energy and energy efficiency tax incentives. Includes monetary penalties for claiming “bonus rate” and failing to to meet prevailing wage and apprenticeship requirements. Projects that do not meet these requirements will receive the much lower “base rate” incentives. [Ways & Means]
Extends Production Tax Credit (PTC) for wind, solar, geothermal, hydropower and hydrokinetic generation and waste-to-energy. [Ways & Means]
Extends Investment Tax Credit (ITC) for taxpayers with property investments in solar, geothermal, microturbine and small wind, biogas, waste energy recovery, and energy storage technology. [Ways & Means]
Additional energy credits for solar facilities that provide economic benefit to low income communities. [Ways & Means]
Extends Zero-Emmission Nuclear Power Production Credit that sets base and bonus tax incentive rates at the same level as PTC. [Ways & Means]
Creates a sustainable aviation fuel credit for fuel that reduces emissions by at least 50% [Ways & Means]
Creates a tax credit for clean hydrogen production at a qualified clean hydrogen facility [Ways & Means]
Transportation
$13.5 billion investment in electric vehicle infrastructure, an additional $7 billion in loans and grants to support American manufacturing, union jobs, and development of zero emissions transportation, plus $5 billion for funding of purchases of zero emissions heavy duty government vehicles. Includes up to $12,500 in consumer rebates for purchasing union-made American electric vehicles. [Energy & Commerce]
$10 billion for high-speed rail planning and development. [Transportation & Infrastructure Committee]
$9.9 billion for competitive grants for projects that improve transit to affordable housing and for residents of disadvantaged communities. [Transportation & Infrastructure]
$1 billion for low-emissions aviation technologies, including biofuels and related infrastructure. [Transportation & Infrastructure]
Health Care
Includes authorizing federal drug price negotiation with price caps for negotiation-eligible drugs set at 120% of the average cost that 6 high-income countries pay. Price negotiation would apply to Medicare, Medicaid, and private insurance beneficiaries, resulting in savings for federal and state governments, for employers, and for the public. [Ways & Means Committee; a corresponding section in Energy & Commerce Committee was removed in the committee’s markup hearing]
Adds comprehensive dental, vision, and hearing coverage to Medicare Part B. [Ways & Means, Energy & Commerce]
Extends the Affordable Care Act’s Medicaid expansion (which expands Medicaid coverage for most low-income adults to 138% of the federal poverty level) to 14 states that opted out. Additionally, the ACA’s premium tax credits are expanded to those below 100% of the federal poverty level. [Energy & Commerce]
$190 billion to expand access to home and community-based care for seniors and the disabled, including improvements to pay rates for care providers. [Energy & Commerce]
Permanently funds federal portion of Children’s Health Insurance Program (CHIP) so the program is not subject to funding gaps. [Energy & Commerce]
$36 billion in investments to modernize public health agencies, support modernization and buildout of care facilities, and expand training of health care workers. [Energy & Commerce]
$15 billion for public health preparedness, including money for strengthening health security supply chains and infrastructure. [Energy & Commerce]
$3 billion for establishing and initial funding of Advanced Research Projects Agency for Health (ARPA-H). [Energy & Commerce]
Child Care
Over $90 billion to support affordable child care for children up to age 3. Caps child care costs at 7% of income for families with household income below 200% of median state household income. First three fiscal years of the entitlement program will utilize the existing Child Care and Development Block Grant formula with the requirement that 50% of funds be directed to expanding child care access, 25% on increasing child care providers and building infrastructure, and the final 25% on a combination of expanding access and child care supply/infrastructure. After three years of the program, federal-state cost sharing split will be 90% from the federal government with 50% of state administrative expenses reimbursed by federal government. Health and Human Services will to provide Local Birth to Five Early Learning Grants to localities in any states opting out of federal child care and early learning benefits. [Ed. & Labor]
Housing
$322 billion over 10 years for federal funding of new and existing public housing and affordable housing infrastructure. [Financial Services Committee]
$90 billion for rental assistance
$80 billion for capital investments in public housing
$80 billion for existing programs that perserve, retrofit, and build affordable housing across the country
$10 billion for first-time first generation homebuyer assistance
Funds expansion of Housing and Urban Development’s fair housing enforcement. [Financial Services Committee]