Committee for a Responsible Federal Budget

What's in the Latest Build Back Better Framework?

Oct 28, 2021 | Budgets & Projections

We have published an full estimate of the House's Build Back Better Act based on CBO's scores of the bill here

The White House has announced an agreed framework for the Build Back Better reconciliation package that would increase spending and reduce taxes by $1.75 trillion or $1.85 trillion over ten years, offset mostly with tax increases on high earners and corporations. However, the framework includes numerous expiration gimmicks to fit all the policies into the topline number. 

The bill would provide universal pre-K for all three- and four-year-olds and cap child care costs for six years at a cost of $400 billion, extend the $3,000/$3,600 Child Tax Credit (CTC) for one year and make its full refundability permanent, extend the Affordable Care Act (ACA) subsidy expansion for three years, extend the Earned Income Tax Credit (EITC) expansion, provide ACA subsidies up to 100 percent of premiums for those in the Medicaid coverage gap for four years, provide $150 billion of funding for home- and community-based services, expand Medicare to cover hearing benefits at a cost of $35 billion, increase funding for affordable housing by $150 billion, increase higher education spending by $40 billion, expand school meal programs, and provide $100 billion to overhaul the immigration system. It would also provide $555 billion for climate change through a combination of consumer rebates for a variety of clean energy sources, funding for clean energy projects, climate resilience programs, and a new Civilian Climate Corps.

Policy Ten-Year Cost Years in Effect
Strengthen Medicaid home- and community-based services  $150 billion permanent'
Provide universal pre-K to all three- and four-year-olds  $400 billion 6 years
Establish an affordable child care program  3 years/6 years*
Provide clean energy tax credits $320 billion 10 years
Extend increased CTC $200 billion 1 year
Extend expanded EITC 1 year
Make the CTC fully refundable  permanent
Make investments and incentives to address extreme weather  $105 billion permanent'
Make investments and incentives for clean energy, technology, manufacturing, and supply chains $110 billion permanent'
Invest in clean energy procurement  $20 billion permanent'
Extend expanded ACA premium tax credits  $130 billion 3 years
Make ACA premium tax credits available to those in Medicaid coverage gap 4 years
Establish a hearing benefit in Medicare  $35 billion unknown 
Invest in housing affordability and reducing price pressures  $150 billion permanent'
Expand access to education beyond high school and invest in workforce development $40 billion permanent'
Other investments  $90 billion permanent'
Subtotal  $1,750 billion  
Immigration reform (if Byrd Rule compliant)  $100 billion unknown
Total $1,850 billion  

Source: The White House. *The House proposal would be in full effect for three years, while the Administration's proposal would be in effect for six years. 'Actual timeframe is unclear, but no expiration is mentioned. 

The framework offsets these costs with tax increases on high earners and corporations, increased Internal Revenue Service (IRS) funding, and a repeal of the Trump Administration's prescription drug rebate rule. Specifically, it would raise $325 billion over ten years from a 15 percent minimum tax on large corporations based on income reported to shareholders, $125 billion from a tax on stock buybacks, $350 billion from a global 15 percent minimum tax on foreign corporate earnings, $230 billion from a 5 percent surtax on income over $10 million and an 8 percent surtax on income over $25 million, $250 billion by closing loopholes for pass-through income and Medicare taxes, $170 billion from extending a limit on business losses for high earners after 2026, and $400 billion from increasing IRS funding to close the tax gap. It would also save $145 billion by permanently repealing the Trump Administration's drug rebate rule, which the bipartisan infrastructure bill already delays until 2026.

Offset  Ten-Year Savings
Impose a 15 percent domestic minimum tax on large corporations  $325 billion
Impose a 1 percent surcharge on corporate stock buybacks  $125 billion
Impose a 15 percent global minimum tax  $350 billion
Impose a 5 percent surtax on income above $10 million and an 8 percent surtax on income above $25 million  $230 billion
Expand 3.8 percent Net Investment Income Tax $250 billion
Limit business losses for the wealthy  $170 billion
Invest in IRS tax enforcement to close the tax gap and boost tax compliance $400 billion'
Permanently repeal Trump Administration drug rebate rule  $145 billion
Total  $1,995 billion

Source: The White House.  'Actual revenue is likely to be lower. A recent CBO estimate found $80 billion of IRS funding would produce $120 billion of net revenue, though that figure could differ based on details.

Read more options and analyses on our Reconciliation Resources page.

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