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What's in Democrats' new $1.75 trillion social spending and climate bill?

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Washington – After protracted negotiations between congressional Democrats and President Biden over the details of his domestic policy agenda, the White House on Thursday rolled out a revamped framework that aims to expand the nation's social safety net and combat climate change.

The cost of the package has been whittled down from its original $3.5 trillion price tag to $1.75 trillion over a decade. Despite the drop in cost, it is opposed by Republicans, so Democrats are trying to enact the plan through a budgetary process called reconciliation, which would allow it to clear the Senate solely with Democratic support. 

Democratic leaders have spent weeks haggling with their colleagues over the size and scope of the package, working to bridge the gaps between a pair of moderate Democratic Senators, Joe Manchin of West Virginia and Kyrsten Sinema of Arizona, and progressives in the House.

But after releasing the trimmed-down framework, President Biden expressed confidence it would win support from all Democrats. Whether the plan does, indeed, garner the backing from all corners of the Democratic Party remains to be seen, as cut from the framework were key priorities for some lawmakers.  

Here are some of the major items in the framework for the bill, according to the White House, as well as some initiatives that have been dropped over the course of talks. This list will be updated as negotiations continue.

What's in the Build Back Better Act framework

  • Fighting climate change 

Combating climate change and slowing the rate at which Earth warms will mean transitioning away from fossil fuels, the major source of greenhouse gas emissions. The new framework unveiled by the White House contains $555 billion for climate and clean energy investments.

As written, the plan would cut more than a gigaton of greenhouse gas emissions by 2030 — a roughly 50% reduction compared to 2005 levels, according to the White House. 

The legislation would provide tax credits to Americans buying new electric vehicles that could provide up to $12,500 in incentives to some families to drop gas-guzzling vehicles. New tax incentives designed to encourage the installation of solar panels on American homes will also be offered.  

Manchin objected to a $150 billion "clean electricity performance program" contained in the original proposal, which would pay utility companies that increase their renewable energy supplies by 4% per year and fine companies that don't hit this benchmark. He has argued that companies are already doing this, so there's no need to incentivize them to augment their use of renewables. However, climate advocates say private enterprise isn't moving quickly enough, and this provision would speed up the transition away from fossil fuels.

  • Child care and universal pre-K

Mr. Biden's framework includes $400 billion for child care and preschool through programs funded for six years. In addition to expanding access to universal preschool for all 3- and 4-year-olds, the plan also limits child care costs for some families to no more than 7% of income. Parents must adhere to work requirements to qualify.

  • Medicare expansion

This heavily debated provision would expand Medicare to cover hearing services, but the framework eliminated a proposal for Medicare to also include dental and vision benefits, a key priority for Senator Bernie Sanders.

Manchin believes the program's solvency should be addressed before it is expanded.

  • Extended child tax credit

Democrats expanded the child tax credit for 2021 in their $1.9 trillion COVID-19 relief plan and wanted to extend it through 2025. But Mr. Biden's updated framework extends the child tax credit for one year, for 2022, which the White House said will provide more than 35 million households up to $3,600 in tax cuts per child.

Under the enhancement, families receive $3,600 per child under age 6, and $3,000 per child ages 6 to 18. Most families receive monthly payments of either $250 or $300 per child.

The full expanded child tax credit is available to individuals making up to $75,000 or married couples making up to $150,000.

  • Housing, health care and immigration provisions

Mr. Biden's framework includes $150 billion to build or improve more than 1 million new affording housing units and help with rental and down payment assistance. 

It also makes investments in maternal health, community violence initiatives, Native communities and supply chain resilience.

For health care, the plan would lower premiums by an average of $600 per person for more than 9 million Americans who purchase insurance through the Affordable Care Act's marketplace, and provide coverage for up to 4 million Americans who are currently uninsured.

The proposal also includes an additional $100 billion to reform the nation's immigration system, which, if included, would raise the price tag from $1.75 trillion to $1.85 trillion. But previous attempts to tuck immigration reform into the package were knocked down by the Senate parliamentarian, who is tasked with ensuring the legislation's provisions comply with the rules governing the reconciliation process.

It's unclear whether this latest proposed investment in the immigration system will pass muster.

What got cut from the bill

  • Two free years of community college

While Mr. Biden's domestic policy proposal initially included two years of free community college for all students regardless of income, the plan was dropped from the framework unveiled by the White House.

Instead, the measure increases the maximum Pell Grant for more than 5 million students by $550 and expands access for "Dreamers," the name given to millions of undocumented immigrants who came to the U.S. as children, according to a fact sheet from the White House.

  • Cutting prescription drug prices

A key provision in a bill from House Democrats was aimed at helping to slash prescription drug prices. Americans on average pay two to three times as much as people in other countries for prescription drugs, according to the White House. Among other things, the legislation would have allowed Medicare to negotiate drug prices, but the new framework did not include this proposal. Medicare is currently prohibited by law from negotiating for the best deal. 

  • Paid family and medical leave

Mr. Biden initially proposed 12 weeks of paid family and medical leave, but the benefit was then scaled down to four weeks during negotiations. In the end, though, paid family leave was cut out entirely of the compromise proposal put forth by the White House.

This is likely to rankle some Senate Democrats, who had been pushing hard for its inclusion.

How Democrats plan to pay for it

Under Mr. Biden's proposal, a 15% minimum tax will be imposed on corporate profits that large corporations report to shareholders, as well as a 1% surcharge on corporate stock buybacks. Those provisions would raise $450 billion in new revenue, according to the White House.

The framework also calls for a global minimum tax and new surtax on the wealthiest Americans' income, as well as bolstered IRS enforcement. The bill would impose a 5% tax rate above those with an income over $10 million, and another 3% surtax on income over $25 million. The White House estimates the new surtax would raise an additional $230 billion from the nation's highest earning taxpayers.

The total new revenue under the proposal would total nearly $2 trillion, the White House said.

Cara Korte, Ed O'Keefe and Sara Cook contributed to this report.

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