Democrats Finally Have Their Social Spending Plan — Paid Family Leave Got Left Out
The plan released by the White House features $1.75 trillion in funding for social programs and to address climate change, but it's still being sold to Congress.
WASHINGTON — President Joe Biden announced a breakthrough framework agreement on the Build Back Better Act that includes $555 billion in funding to fight climate change as well as new social programs such as universal prekindergarten.
But after months of negotiations, Democrats had to make painful cuts as they shrunk their original $3.5 trillion plan roughly in half. Most notably, the plan to institute the country’s first mandatory paid family and medical leave was left out. During the election, Biden made paid family leave a central part of his campaign and promised up to $4,000 per month and 12 weeks of paid parental leave to new parents.
And in a huge win for Big Pharma, the plan released by the White House also omits letting Medicare directly negotiate down drug prices.
Biden hailed the framework in a speech from the White House, saying, "when we make these investments, there will be no stopping the American people or America. We will own the future."
"This framework includes historic investments in our nation and our people," he said. "Any single arm of this framework would be viewed as a fundamental change in America."
The success of the framework is no sure thing. Biden went to Congress Thursday morning to pitch the plan. So far, progressives are largely withholding judgment. “We need something a little bit more than something on the back of an envelope,” said Rep. Alexandria Ocasio-Cortez.
Rep. Pramila Jayapal, who leads the Congressional Progressive Caucus, told reporters Biden was "impressive with his knowledge of all the pieces of the bills" in his meeting with Democrats. She did not say definitively how progressives would vote on the plan, however. "The first step is we got to see the legislation," she said.
The plan extends the child tax credit for one year. Originally passed as part of Covid relief, the tax credit is currently paying parents up to $3,600 per year per child. It will be permanently expanded for people with the lowest incomes.
The framework also subsidizes daycare costs, expanding access to 20 million children, according to the White House. The plan caps the cost of childcare at 7% of income for families earning up to 250% of their state’s median income.
In shrinking the size of their bill, Democrats choose to place time limits on some programs. The framework would subsidize universal prekindergarten for 3- and 4-year-olds, but that is only funded for six years.
The bill would also expand Affordable Care Act subsidies to reduce premiums for 9 million people by an average of $600 per person per year. Those subsidies are only funded through 2025.
That plan is risky. It means a future White House and Congress will have to agree to extend these programs or else they will expire. Democrats had to bring the price tag of the bill down to appease some centrists, most notably Sens. Joe Manchin and Kyrsten Sinema. Both are said by the White House to be on board with the framework, but progressives could still block passage if they feel it is not robust enough.
"He said he's confident he can get the votes," Jayapal told reporters of the president Thursday morning. But she sounded some uncertainty about Manchin and Sinema. "It wasn't clear whether the two senators are committed to vote for it," she said.
Sinema in a statement said "we have made significant progress" and that she looked forward to "getting this done," without an explicit commitment. Manchin told reporters at the Capitol that he has "worked in good faith" and that the plan is "in the hands of the House."
Sen. Bernie Sanders, a key vote and negotiator for progressives, praised the framework in talking to reporters on the Hill but emphasized that he would like to see it "made better," particularly with regard to prescription drug costs and Medicare coverage.
"If you read the bill, read the outline, what is in there has not been the kind of legislation that has passed the Congress since the 1960s," he said.
Overall, the bill authorizes $1.75 trillion in new spending over the next decade, while raising around $2 trillion in new tax revenue.
The largest part of the bill is approximately $550 billion in funding over the next decade to combat the worsening climate crisis. That package includes $320 billion in industry and consumer rebates to shift the country toward green energy, $105 billion to address extreme weather impacts, $110 billion in investments in clean energy manufacturing and supply chains, and $20 billion for clean energy procurement. The original plan was to levy penalties on the industry in order to convert the electrical grid away from coal and toward electricity, but Manchin blocked those provisions.
Earlier this year, Biden pledged to cut US emissions by at least half in 2030 compared to 2005 levels. Having domestic support for this framework, which would help the US have a better shot at reaching its new goals, would put Biden in a stronger negotiating position when he meets with world leaders in a few days to discuss the global strategy for tackling climate change.
Due to their razor-thin margin of control in Congress, Democrats will need every vote in the Senate, and all but a small handful in the House, to pass the Build Back Better Act. Progressives in the House have also tied passage of the plan to a vote on the bipartisan infrastructure package passed by the Senate over the summer. Sanders explicitly said Thursday morning that the House should not vote on the infrastructure legislation until the agreement on the social plan is clear and final.
Democrats are planning to raise money to pay for the plan by creating a minimum corporate tax of 15% for companies that report over $1 billion in profit in a year. Currently, companies can use deductions to lower their tax bills below that level. The framework also creates a 5% tax surcharge on income above $10 million and a further 3% tax on income above $25 million.