Build Back Better Plan

President Biden speaks about the American Job Plan in Pittsburgh in March 2021.

On March 31, 2021,[14] Biden unveiled details of his $2.3 trillion American Jobs Plan (which, when combined with the American Families Plan, amounted to $4 trillion in infrastructure spending),[15] which he pitched as "a transformative effort to overhaul the nation's economy".[16] The plan aimed to create millions of jobs, bolster labor unions, expand labor protections, and address climate change.[17][18]

The plan called for $621 billion of spending on transportation infrastructure. That included $115 billion towards highways and roads, $80 billion to improve American railways, $85 billion to modernize public transportation, $25 billion for airports, $174 billion to incentivize adoption of electric vehicles (including $15 billion for the construction of 500,000 electric vehicle charging stations by 2030), and $17 billion for inland waterways, coastal ports, land ports of entry and ferries.[14] It also called for electrifying at least 20% of the country's yellow school bus fleet.[14]

The plan called for $100 billion in funding for American energy infrastructure, aiming to transition the country to 100% carbon-free electricity production by 2035. It intended to establish a "Grid Deployment Authority" within the Department of Energy to support the construction of high-voltage transmission lines.[2]

The plan included $213 billion for building and retrofitting more than 2 million homes and $40 billion to improve public housing.[14] It also sought to end exclusionary zoning.[18] The plan included $111 billion for modernizing drinking water, wastewater, and storm water systems. $45 billion of that was intended to replace 100% of the country's lead water piping.[2] The plan aimed to deliver universal high-speed broadband coverage.[14]

The AJP proposed a $16 billion investment in plugging "orphan wells", abandoned wells that continually release methane emissions.[19] The plan contained $100 billion to construct and upgrade public schools, $25 billion to upgrade childcare facilities, and $12 billion to spend on community colleges.[14]

The AJP contained a proposal for a Civilian Climate Corps modeled loosely after the Civilian Conservation Corps (CCC) created during the New Deal.[20][lower-alpha 1] It proposed that $10 billion be allocated for the program, which the White House stated would create somewhere between 10,000 and 20,000 jobs.[19] In contrast, during its nine years in operation, around three million people participated in the original CCC.[24]

The plan would have spent $180 billion on research and development, including substantial expenditures in clean energy and basic climate research.[14] It would also have spent $50 billion on semiconductor technology.[14] The plan set aside $300 billion for manufacturing expenditures.[2]

The plan included $400 billion to expand access to home- or community-based care for seniors and people with disabilities.[14]

The passage of the proposed Protecting the Right to Organize Act (PRO Act) was included as part of the proposal.[25] The legislation would bolster unions by overriding state right-to-work laws[26][27] and safeguarding union elections.[28]

The funding was planned to come from raising the corporate tax rate as a part of a proposed "Made in America Tax Plan".[2] This would have partially reversed the Tax Cuts and Jobs Act of 2017. The corporate tax rate would have been raised from 21% to 28%, bringing it closer to the pre-2017 rate of 35%. The plan aimed to raise over $2 trillion by 2036,[18] with other methods including ending subsidies for fossil fuel companies, increasing the global minimum tax from roughly 13% to 21%, and deficit spending.[14][29]

Also planned was an increase of the global intangible low-taxed income (GILTI) from 10.5% to 21%.[30] GILTI taxes target intangible assets like patents, copyright, and trademarks that can sometimes be used by companies for tax avoidance.[31] This tax was created in 2017 to discourage U.S.-based companies from shifting profits to corporate tax havens.[31]

On July 28, Senate negotiators announced that a $1.2 trillion agreement for physical infrastructure had been reached.[32] According to NPR.org, this included:

• $110 billion for roads, bridges and other major projects;
• $11 billion in transportation safety programs;
• $39 billion in transit modernization and improved accessibility;
• $66 billion in rail;
• $7.5 billion to build a national network of electric vehicle chargers;
• $73 billion in power infrastructure and clean energy transmission" and
• $65 billion for broadband development.[32]

The bill also made the Minority Business Development Agency a permanent agency.[33] On August 10, The Senate voted 69–31 to advance the bill.[34][35] On November 5, the House of Representatives passed it, 228–206.[36] Biden signed the legislation into law on November 15.[37]

The Center for American Progress (CAP), a liberal think tank, lauded the original AJP for its focus on climate justice.[38] The program also received support from organized labor, with AFL–CIO president Richard Trumka praising the plan for its inclusion of the PRO Act.[39] Senator Bernie Sanders spoke favorably of the plan while arguing that the White House should go even further.[40]

Political conservatives dismissed the original legislation as costly and challenged the inclusion of policy areas not traditionally considered "infrastructure".[41] Republican Senator Ted Cruz criticized the plan, arguing that it would lead to job losses and served as a "Green New Deal-lite masquerading as an infrastructure plan".[42] Republican House minority leader Kevin McCarthy called the plan "[m]ajor expansions of government agencies and even more inflation that will lead to higher costs for all Americans."[43]

The third part of the original Build Back Better agenda, the American Families Plan, set aside $1 trillion in new spending and $800 billion in tax credits (both over ten years).[44] This included:

• $200 billion in spending on childcare, ensuring that no family has to pay more than 7% of their income on childcare,
• ~$200 billion to make pre-kindergarten universally available for free,
• >$200 billion towards government-subsidized paid family and medical leave,[45]
• ~$300 billion towards making community college free for all Americans, and
• ~$200 billion on health insurance subsidies available through the Affordable Care Act healthcare exchanges.[46][44][47]

It would have extended the boost to the child tax credit made in the American Rescue Plan, which effectively turned the credit into a child allowance.[48][49] It would also revoke a federal restriction on people with felony drug convictions from obtaining food benefits through the Supplemental Nutrition Assistance Program (SNAP).[50]

The bill was to have been at least partially funded by a number of tax hikes on high-income Americans and investors,[46] including restoring the top marginal income tax rate to its pre-2017 level of 39.6% and nearly doubling the capital gains tax for people earning more than $1 million, as well as eliminating a provision in the tax code that reduces capital gains on some inherited assets, like vacation homes.[44] It would also have raised revenue by boosting the Internal Revenue Service's budget by $80 billion (over ten years), which the White House estimated could raise over $700 billion in revenue that otherwise would have been lost to tax evasion.[51][52] It would also have required banks to report total account outflows and inflows to the IRS to help detect tax evasion.[53]

A $3.5 trillion reconciliation bill that included measures related to climate change, family aid, and expansions to Medicare was rolled out, but failed to win the support of Republicans or conservative Democrats.[54][55] On October 28, 2021, the White House released a new $1.75 trillion framework, and the House of Representatives passed the bill on November 19, 2021, but it still struggled to win Democratic Senator Joe Manchin's support for using the reconciliation process.[56] After it ultimately failed to match his envisioned cost, Manchin rejected the bill, dooming its passage.[6]

In July 2022, revived negotiations between Manchin and Senate Majority Leader Chuck Schumer yielded a deal on a slimmed-down and reworked version of the original bill, the Inflation Reduction Act of 2022. This bill would raise $737 billion in revenue while spending $437 billion. The remaining $300 billion would go toward deficit reduction. The bill's main goals include reducing current and future inflation, reforming corporate taxing, lowering prescription drug prices for consumers, extending health insurance subsidies through the Affordable Care Act, and curbing greenhouse gas emissions while boosting domestic energy production.[57][58]

The Senate passed the Inflation Reduction Act on August 7, 2022, on a 51–50 vote, with a tie-breaking vote from Vice President Kamala Harris,[59] returning the amended bill to the House. On August 12, the House passed the bill on a 220–207 vote,[60] and President Biden signed it into law on August 16.[61]