Moneybox

There Are at Least Two Extremely Good Things to Celebrate in Biden’s New Build Back Better Plan

Joe Biden raises his arms at his sides next to Nancy Pelosi both standing among other staff inside a hallway with neoclassical columns
President Joe Biden and Speaker of the House Nancy Pelosi at the U.S. Capitol on Thursday. Nicholas Kamm/AFP via Getty Images

The Biden administration finally released its new, whittled-down framework for the Build Back Better Act on Thursday morning after a series of crash negotiating sessions with key Democratic moderates. Team Biden is now spending its day cajoling the rest of the party to back what they came up with.

At $1.75 trillion, the package is about half the size originally envisioned. So, suffice to say, the politics around this new and very obviously not-improved bill are still quite messy and generally evolving by the hour. Progressives spent the past several weeks essentially rending their garments in agony and dismay as their favorite provisions have been shrunk or dropped from the proposal entirely. And Sens. Joe Manchin and Kyrsten Sinema haven’t even clearly said they’d support Biden’s framework, even though the whole thing was basically designed to satisfy all their various (often conflicting) red lines. We’re still very much in the “can this thing even pass?” phase, and only just now is anybody getting to see actual bill text. But while we’re here, we might as well talk content. Is there anything in this legislative mishmash to actually celebrate?

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There’s good news and bad news on that front. While details continue to emerge and negotiations are ongoing, it seems we’re ending up with a shockingly good climate bill attached to a somewhat depressing everything else bill.

Progressives have largely been in a state of mourning over the bill’s climate section, ever since the Biden administration dropped its original flagship proposal, the Clean Electricity Performance Program, in the face of opposition from Manchin. But what’s emerged in its place looks impressive. To start, there’s the sheer size of the investment: $550 billion to deal with global warming. The money flies in lots of different directions, from green lending to remediation to building out green-tech manufacturing in the U.S. But most importantly, it will fund the full package of tax credits for clean energy development and electric vehicles that climate hawks had been hoping for. Those financial incentives haven’t gotten a lot of attention from the media, because they fundamentally aren’t that novel or flashy, but as I wrote at length last week, experts think that they alone could lead to major emissions reductions simply by channeling a huge river of subsidies toward a green transition.

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Climate groups will obviously analyze the bill in depth to figure out how far it will actually get the U.S. toward the Biden administration’s goal of cutting emissions in half from 2005 levels by 2030. But insta-reactions have been positive. Case in point: Jesse Jenkins, head of Princeton University’s ZERO Lab, which specializes in climate modeling, thinks that combined with the bipartisan infrastructure bill, the new framework may be sufficient to meet its climate ambitions.

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So we at least have a serious climate bill in here. It is within the realm of plausibility that it will actually get us to our Paris Accord targets despite the fact that it was negotiated with a literal coal broker from West Virginia, which is not a result I think many anticipated. But life is weird that way.

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As for the rest? To be charitable, you could call it a mixed bag. The bit that may get progressives most excited is the extension of the child tax credit. As part of the American Rescue Plan, the Biden administration increased the CTC’s value, and made it available as a simple cash payment to parents even if they had no income or tax liability—a change that wonks call “full refundability.” The Build Back Better plan will extend the full, souped-up version of the credit for just one year—doing it for longer would have been incredibly expensive—but it will become fully refundable on a permanent basis. It’s a true milestone in the history of America’s social safety net that Democrats should be proud of: Going forward, the United States will extend unconditional cash support to even the poorest kids. According to the Jain Family Institute, the move could reduce future child poverty by 19 percent. Elsewhere in the bill, there are also big investments in elder care ($150 billion) and affordable housing ($150 billion), including public housing that could do immense good. It also creates hearing aid coverage for Medicare beneficiaries—which is small potatoes compared with the new dental benefit Bernie Sanders hoped to create, but a nice addition nonetheless.

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Now the bad stuff: Democrats are about to make massive but only temporary investments in expanding child care, early education, and health insurance in this country, all of which could easily vanish in a few years if Republicans grab control in Washington. Lawmakers chose this path because they wanted to include as many new programs as feasible in the legislation, and sunsetting their funding brought down the cost on paper. But it’s essentially an act of faith that somehow these initiatives will be renewed down the line, which is an iffy political calculation that could also have negative policy consequences.

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For instance, the bill extends the bulked-up Affordable Care Act subsidies included in the American Rescue Plan, and makes poorer residents of states that refused to expand coverage eligible for zero-premium coverage on the exchanges to finally fill that gap (total cost: $130 billion). This is watery thin gruel compared with the sorts of health care reforms Democrats discussed during the primaries. But making matters worse, it all goes poof after 2025, and it seems deeply unlikely Republicans would go along with re-upping an expansion of a program they fundamentally hate. At a cost of $400 billion, the bill would create a universal pre-K, as well as an affordable child care program that, without getting into the nitty-gritty of it, would probably benefit the vast majority of working families . But the programs are only slated to last for six years; given that states and localities would have to agree to participate and put up some funding as well, it was already an open question how many Republican governors would choose to take part even if the programs were permanent. With temporary funding that might not get renewed, it seems entirely possible that both red and some blue states will sit it out, making a potentially huge accomplishment less effective and less politically durable.

So Biden is serving up a major climate initiative, a permanent attempt to alleviate child poverty, and some big new social spending programs that are set to self-destruct. It could always be worse.

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