House Democrats narrowly passed a version of President Biden’s multitrillion-dollar social welfare bill on Friday, sending the measure to the Senate where it is likely dead on arrival.
In a 220-to-213 vote, the House voted to approve the more than 2,000-page bill only hours after the Congressional Budget Office determined it will add upwards of $367 billion to the federal deficit.
“We are proud to be passing this legislation under the leadership of President Joe Biden,” said House Speaker Nancy Pelosi, a California Democrat. “
The bill now heads to the Senate where even the strongest of supporters say the House version is dead on arrival. Mrs. Pelosi ensured as much by reinserting several costly provisions, including paid family leave, that is opposed by moderate Senate Democrats.
Since the bill is moving via a budget reconciliation in the Senate, which allows some spending measures to avert the 60-vote filibuster threshold and pass by a simple majority, the upper chamber has what is akin to veto power.
House Democrats rushed the bill through shortly after the CBO, a nonpartisan federal agency, released a report showing it would add more than $367 billion to the federal deficit over the next 10 years.
The analysis contradicted Mr. Biden’s frequent boast that his Build Back Better agenda “costs zero dollars.”
“Every page of the Democrats’ socialist spending scam will be paid for by or borrowed from America’s hardworking taxpayers,” said House Minority Leader Kevin McCarthy, California Republican. “This is the single most reckless and irresponsible spending bill in our nation’s history.”
Sen. John Kennedy, Louisiana Republican, was even less sparing in his criticism of the bill, mocking it during a Fox News interview as “Build Back Bonkers.”
Democrats, for their part, have championed the bill which is the largest expansion of the federal safety net since the Great Society of the 1960s.
If enacted, it will radically transform the relationship between employers and employees.
The bill provides a $214 billion four-week paid-leave guarantee for nearly every worker, including those with only $2,000 in earnings over the last two years.
It also offers four years of subsidized health insurance for low-income families in states that have yet to expand Medicaid. That’s on top of a $36 billion Medicare expansion to cover hearing services.
Apart from health care, the bill includes a one-year extension of the expanded child tax credit, which gives parents with kids under the age of 6 approximately $3,600 in direct payments annually. The legislation also provides for six years of childcare subsidies and universal pre-kindergarten for all 3- and 4-year-olds.
To combat climate change, the package includes $320 billion in clean energy tax credits, along with $105 billion for environmental resilience programs and a Civilian Climate Corps. The bill also includes:
• Home-care for the elderly.
• $250-tax credit for union dues.
• $150 billion for affordable housing.
• Money to hire 87,000 new IRS agents.
• A $50,000-per-year journalist tax credit.
• Increased Pell Grants and HBCU funding.
• $100 billion to reduce immigration backlogs.
• Lucrative tax credits for union-made electric vehicles.
“Democrats will not rest until all Americans have the tools to build back better, to access opportunities, to get ahead,” said House Majority Leader Steny H. Hoyer, Maryland Democrat.
Sen. Joe Manchin III, a key swing vote for the White House’s legislative agenda, has expressed serious reservations about portions of the bill. Mr. Manchin, a moderate West Virginia Democrat, refused to endorse the measure, citing concerns over inflation and spending.
“From the grocery store to the gas pump, Americans know the inflation tax is real and [Washington,] D.C. can no longer ignore the economic pain Americans feel every day,” Mr. Manchin said.
Compounding matters is that fiscal watchdogs warn lower-and-middle class families will be disproportionately impacted by the tax hikes Mr. Biden is proposing to pay for the bill.
An analysis by the Joint Committee on Taxation (JCT) released earlier this week indicates the bill breaks a key pledge from Mr. Biden’s 2020 campaign: that he would not raise taxes on individuals making less than $400,000 annually.
“Biden promised ‘if you make under $400,000 a year, I’ll never raise your taxes one cent,’” said House Republican Whip Steve Scalise of Louisiana. “That was a lie.”
Starting in 2023, individuals making between $75,000 and $100,000 would see a 2.9% rise in taxes. Similarly, taxpayers making between $100,000 and $200,000 would see a hike of 7.4%.
By 2031, taxpayers in the 75,000 to $100,000 range would see a 2.9% increase, while those making between $100,000 to $200,000 see an overall tax hike of 11.3%.
The middle class is targeted by doubling the federal tobacco tax to more than $2 per pack, imposing new taxes on income derived from small businesses, and closing hundreds of various “loopholes” and deductions.
Mr. Biden’s bill also gives the super-wealthy a generous tax cut. The reality stems from a proposal Democrats have included within the bill to expand the state and local tax (SALT) deduction.
“Many of my colleagues argue this major line item is worth accepting to pass the rest of the bill,” said Rep. Jared Golden of Maine, who was the only Democrat to vote against the bill. “I disagree: the SALT giveaway … is larger than the child care, pre-K, health care or senior care provisions.”
SALT allows individuals to write off a portion of their annual state and local taxes. Former President Trump’s signature 2017 tax overhaul capped the deduction to $10,000 annually.
The bill passed by House Democrats raises the cap to $80,000, almost exclusively to the benefit of the super-wealthy.
For instance, according to the JCT, starting in 2023 people making between $200,000 to $500,000 would see a 12.7% tax cut because of SALT. That same year, individuals making between $500,000 to $1 million would see a tax decrease of 35.5%.
People making between $50,000 to $100,000, however, continue to see an overall tax hike.
