House Democrats passed the $1.75 trillion Build Back Better (BBB) Act Friday, sending the social spending bill to the Senate where it will likely be revised again.
The bill, which is the largest expansion of the social safety net in decades, includes provisions on universal pre-K, climate change, health care and immigration, among others. There are some key differences between the House's version of the bill and a framework endorsed by President Joe Biden and Senate Democrats at the end of October.
One major difference: The House bill includes four weeks of paid parental and medical leave, where the Senate bill included none. That is likely to be a sticking point in negotiations, as Sen. Joe Manchin, D-W.V., has objected to including the provision in the bill, and Democrats need all 50 senators on board to pass their legislation, as no Republicans will vote for it.
Additionally, president Joe Biden signed a separate bipartisan infrastructure bill into law earlier this week. It includes funds for roads, bridges, public transit, airports, clean water, high-speed internet infrastructure and more.
Here are some other provisions of BBB that might affect your wallet.
Child tax credit
Democrats are extending the enhanced child tax credit (CTC) for one more year. The credit was increased this year, to be worth up to $3,000 per child 6 to 17 and $3,600 per child under 6. Additionally, families have received half of the credit in monthly payments since July. BBB makes the expansion amounts advanceable.
The bill would also provide over $18 billion in the first three years to create universal pre-kindergarten. Then, the program would be funded by a mixture of federal and state funds.
The House's bill provides for four weeks of paid parental, sick or caregiving leave, at a cost of around $200 billion.
That is one-third of the 12 weeks Biden and Democrats originally wanted, and may not end up in the final legislation at all.
To pay for the bill, House Dems are proposing increasing some taxes on businesses and the wealthiest Americans. It includes a 5% surtax on adjusted gross income (AGI) over $10 million for individuals and an additional 3% on AGI over $25 million.
At the same time, the bill also raises the cap on the state and local tax deduction from $10,000 to $80,00 in 2021, which will benefit the richest households in the country, according to the Tax Foundation.
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