Update: Budget Reconciliation Bill
Democrats remain undecided on the pending budget reconciliation bill to either include most of the programs for a shorter period of time, or fund a few programs permanently and/or for a longer timeframe. On Tuesday, many meetings were held attempting to achieve some common ground and President Biden met separately with groups of moderate and progressive members of Congress, along with the entire Senate Democratic Caucus, hashing out their differences. Lowering the bill’s price tag will require key components of the legislation to be either eliminated or greatly reduced as follows:
- Education: President Biden’s proposal for two years of free pre-K looks like it will survive, but the two years of tuition-free community college will probably be eliminated. The fallback position could be to expand community college scholarships.
- Childcare: Making the Child Tax Credit (CTC) permanent (monthly payments totaling $3,600 a year for children under 6 years old and $3,000 a year for children from 6 to 17 years old) will probably be scaled back to include payments for one or two more years, along with a means test.
- Climate: Talks are continuing with Senator Manchin, but Biden’s Clean Energy Performance Program, which would have rewarded utility companies that switch to using renewable energy sources, will be either greatly reduced or eliminated.
- Paid leave: The U.S. is the only developed country without any national paid family leave. Under the original Democratic proposal, the government would have provided 12 weeks of paid leave for workers. Democrats are now looking at cutting that down to four weeks.
- Elder care: Under President Biden’s original plan, the package would have included $400 billion to support home-based care for elderly and disabled Americans. That initiative will remain in the bill, but is now likely to receive something more in the neighborhood of $250 billion.
- Public housing: The package is still expected to include around $200 billion to fund the development of new affordable housing units and retrofitting of existing units.
- Health care: Coverage for dental, vision and hearing under Medicare will probably not make it into the final package because of the cost, but a “pilot program” could offer some dental coverage to seniors.
- Immigration: Senate Democrats are preparing a third immigration proposal for Parliamentarian MacDonough to review aimed at protecting undocumented immigrants from deportation. The plan would allow immigrants who have resided in the U.S. at least since January 1, 2011, to apply for protections known as "parole-in-place." Immigrants would get five-year work and deportation protection, which could then be renewed for another five years.
- Capital Gains Taxes: Thus far, we have been successful in protecting the current tax policy known as “stepped-up basis” from elimination. Concerns persisted throughout the summer that the measure might eliminate this policy, and we continue to have conversations with the hill on this issue, but we appear to be in a good position on this item at the moment.