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President Joe Biden has campaigned on ambitious plans to create an affordable and more liveable America for the middle class. But its first big step in this direction encountered serious political obstacles.
The Build Back Better Plan (BBB) ââwill be one of the largest investments in America’s social system to date, which, compared to other major economies, is sorely lacking. It is also called the Reconciliation Bill because of a political process with which Democrats aim to pass it.
BBB is also a crucial part of Biden’s political agenda for 2021, which means it will be a mark of his success – or failure – in his first year in office.
The exact price of BBB – and what it will contain – remains to be determined.
Here’s what we know about the bill so far and why it faces so many obstacles.
Rebuilding a better plan always comes up against obstacles
Before we dive into what might go into the BBB bill, a few things: The final text of the bill does not yet exist. And there will be a lot of negotiations taking place by the time it is finally voted on and forwarded to Biden for enactment, so what ends up in the final bill is subject to change.
We also do not know when the bill will pass. Democrats have imposed a deadline to pass it before the last week of September, but failed to garner enough votes to do so. Senate Majority Leader Chuck Schumer (D-NY) and House Speaker Nancy Pelosi (D-CA) have indicated that the new target date for the BBB passage is the end of October.
And while this is a top priority for the White House, the BBB has been sidelined as lawmakers play with the debt ceiling, which is due to expire on October 18. Failure to raise the cap on time could trigger a global financial crisis, which is why lawmakers are concerned.
What could the Build Back Better plan contain?
While there is not yet a full draft of the BBB bill, some House committees have approved parts of what may make it the final bill.
Extend the expansion of the child tax credit
The US bailout (you may know it as the last stimulus package passed in March) significantly expanded the child tax credit, but only temporarily. The credit, which went from $ 2,000 to $ 3,600 per child under 6 ($ 3,000 per child aged 6 to 17), is now sent in the form of monthly installments to households that have chosen it.
Although Biden originally wanted to make the changes permanent, reports suggest they could remain in effect until 2025 instead, if passed through BBB law.
Child tax credit payments have had a notable impact on families. According to analyzes of out-of-pocket payments, they have significantly reduced the food shortage and lifted 3 million children out of poverty this year.
Read more: The Monthly Child Tax Credit Calculator
Paid family and medical leave
The pandemic has exacerbated the country’s need for paid family and medical leave. Before lawmakers stepped in with temporary extensions, there was no wage protection for workers who had to take time off to care for sick children or relatives. The BBB would include provisions to change this.
As of now, the BBB law could provide 12 weeks of paid family and medical leave, replacing at least two-thirds of earnings up to $ 4,000 per month; the lowest paid workers would receive 80% of their income.
Lower child care costs
Child care costs have become increasingly onerous on families over the years, and the pandemic has not helped alleviate them. According to the Center for American Progress, an independent, non-partisan political institute, the average monthly fee for licensed child care ranges from $ 889 to over $ 1,300, depending on the child’s age and care setting. Child care providers pass on increased PPE operating costs and higher hourly wages to workers, leaving families struggling to keep up.
The BBB law would cap child care costs at 7% of the income of middle-class families, saving the average family $ 14,800 per year, according to the White House website. The BBB also aims to make preschool free for 3 and 4 year olds.
Lower higher education costs
The rising costs of education are not unique to the pandemic, but containing them has long been a priority for Biden. Now, taking out a student loan to get a degree is the norm, but it significantly hinders the progress of young people towards important stages in their lives, such as starting a family or buying a house.
The BBB law could provide two years of free community college to help offset some of the costs. It could also increase the maximum amount of the Pell Grant by $ 1,500. Historically, black colleges and universities (HBCUs) and tribal colleges and universities (TCUs) would receive billions of investments to subsidize the tuition fees of students from low-income families.
Closing the Medicaid Coverage Gap
The current public option for health care, known as the Affordable Care Act (ACA), was passed during the Obama administration, with Biden as vice president. It aims to extend ACA market grants until 2024 for people with incomes below 100% of the federal poverty line.
Currently, more than two million people with incomes below the poverty line may be eligible for Medicaid, but their states have not embraced ACA’s Medicaid extension, leaving these people in so-called the Medicaid coverage gap. The BBB law would fill this gap by establishing the federal Medicaid program in states that have not expanded the program by 2025.
What is the hold-up?
The BBB law is ambitious. It has the potential to be one of the most significant investments in American society to date. And with its original price hitting $ 3.5 trillion, not everyone wanted to get on board.
Senators Kyrsten Sinema (D-Ariz) and Joe Manchin (D-WV) are two vocal opponents of the passage of a bill at such a high price. Manchin said it would open at an aggregate price of $ 1.9 to $ 2.2 trillion, which would satisfy Progressive Democrats, who had previously turned down his offer of a package worth $ 1.5 trillion. of dollars.
Neither has been willing to vote for the BBB act as is, but every Democratic senator must vote yes to secure passage.