The House of Representatives on Friday approved a roughly $2 trillion social-spending and climate-change bill backed by President Joe Biden, sending the measure to the Senate, where it is expected to face significant changes.
Lawmakers in the Democratic-controlled House passed what’s known as the Build Back Better plan on a vote of 220 to 213. The sprawling package would create universal preschool, extend more-expansive Affordable Care Act subsidies, fund clean-energy programs and provide tax credits for electric vehicles
F,
GM,
of as much as $12,500.
“Too many Americans are just barely getting by in our economy,” House Majority Leader Steny Hoyer, a Maryland Democrat, said before the vote. “And we simply can’t go back to the way things were before the pandemic.”
Final passage was delayed to Friday morning from late Thursday as House Minority Leader Kevin McCarthy, a California Republican, spoke for over three hours criticizing the legislation, Biden and Democrats, drawing sporadic boos and groans from Democratic lawmakers. McCarthy is in line to become House speaker if the GOP takes back control of the chamber in next year’s midterm elections.
Also see: House Democrats plan EV tax credits of up to $12,500, as Republicans, Tesla, Toyota voice objections
Some major portions of the legislation — such as paid leave and immigration policy — are expected to undergo removal or changes in the Senate, where Democrats have no votes to spare. West Virginia Sen. Joe Manchin, a moderate Democrat, has raised concerns about the paid leave program, as well as the cost of the overall package. In the 50-50 Senate, the bill will need the backing of every Democrat to pass, since no Republicans support it.
Another controversial provision: the $10,000 cap on the state and local tax deduction would be raised to $80,000 beginning in tax year 2021. That higher cap would be extended over nine years. Sen. Bernie Sanders, the Vermont independent who leads the Senate Budget Committee, on Thursday called that provision “wrong,” and said it amounts to a tax break for the wealthy.
Biden, fresh off a victory from the $1 trillion bipartisan infrastructure
PAVE,
bill’s enactment, has talked up the bigger package in public appearances this week, and touted reports that showed his agenda will not worsen inflation pressures. Republicans have pointed to the highest inflation in three decades and charge that Biden’s plans will add to it.
Biden has said the 10-year legislation would pay for itself, including by raising taxes on high-income Americans and a new corporate minimum tax.
Late Thursday, however, the nonpartisan Congressional Budget Office said the legislation would increase the deficit by $367 billion over a decade. That estimate doesn’t include revenue that could be generated from increasing enforcement by the Internal Revenue Service.
In a key area of disagreement, the CBO said beefed-up IRS enforcement would bring in $207 billion in revenues — while the White House had estimated $400 billion over a decade.
Now read: Would a beefed-up IRS bring in more tax revenue, as Biden says? Experts are divided
Democrats are looking to deliver another legislative win as Biden is struggling with falling approval ratings, and with the party facing potentially tough midterm elections next year.
Senate Majority Chuck Schumer, a New York Democrat, told reporters earlier this week that his chamber is aiming to pass the Build Back Better Act before Christmas.
The main U.S. stock benchmarks
SPX,
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on Friday traded mixed.
MarketWatch’s Victor Reklaitis and the Associated Press contributed to this report.
This post was originally published on Market Watch
