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What's in the $3.5 trillion reconciliation bill?

Congressional infighting delays Biden agenda
Congressional infighting delays Biden agenda 02:57

Washington – House Democrats have taken President Biden's first-term domestic policy priorities and dropped them into one big 2,465-page bill that aims to expand the nation's social safety net and combat climate change. 

Because the $3.5 trillion bill is opposed by Republicans, Democrats are trying to enact it through a budgetary process called reconciliation, solely with Democratic support. But this would require a "yes" vote from every Senate Democrat, and two of them, Kyrsten Sinema and Joe Manchin, say they won't support it unless the price comes down. Recently, Mr. Biden floated a "realistic target" of $1.75 trillion to $1.95 trillion, according to a source familiar with the meeting the president had with progressives on October 19. Multiple sources on Capitol Hill say the president is calling it a "$2 trillion" plan. 

The 10-year Build Back Better Act would fund everything from free childcare to expanded Medicare. Here are some of the major items in the bill. This post will be updated as negotiations reconfigure it.

What's in the Build Back Better Act:

  • Two free years of community college

The legislation currently provides two years of free community college for all students, regardless of family income. It is anticipated to cost $108 billion. But it's possible community college could be cut from the legislation, as Democrats try to decrease the total size of the package. 

A source familiar with the conversation Mr. Biden had with progressives at the White House on October 19 said the subject of cutting tuition-free community college came up. Congresswoman Pramila Jayapal, the chair of the Progressive Caucus, also said free community college is "probably going to be out" of the final bill. 

  • Child care and universal pre-K

Every family that applies will be offered child care assistance for children ages 0 to 5. In all, the plan allocates roughly $450 billion to lower the cost of child care and provide two years of universal pre-K for 3- and 4-year-olds, according to the House Education and Labor Committee.

The panel estimated that this proposal would keep the cost of child care at or below 7% of most families' income.

  • Medicare expansion

This heavily debated provision would expand Medicare to include coverage of dental, hearing and vision services. 

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 now want to extend it through 2025.

Under the enhancement, families receive $3,600 per child under age 6, and $3,000 per child age 6 - 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.

But a source familiar with the conversation Mr. Biden had with progressives at the White House on October 19 confirmed the president said the child tax credit may only be extended for one year. 

While Mr. Biden has touted the tax credit's success in lifting children out of poverty, Manchin thinks Democrats' social spending package should impose work requirements for parents who qualify. 

"You want to help the children and the parents that are basically providing for those children. There's no work requirements whatsoever. There's no education requirements whatsoever for better skill sets," he told CNN in an interview. "Don't you think, if we're going to help the children, that the people should make some effort?"

The House Ways and Means Committee has also endorsed permanent expansions of the earned income tax credit and child and dependent care tax credit.

  • Cut prescription drug prices

Another key provision in the bill is 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 allows Medicare to negotiate drug prices. Medicare is currently prohibited by law from negotiating for the best deal. 

  • Paid family and medical leave 

For the first time in history, the U.S. would have comprehensive paid family and medical leave. But a source familiar with Mr. Biden's meeting with progressives on October 19 said paid family leave could be cut from 12 weeks to four weeks. The legislation would replace at least two-thirds of earnings, up to $4,000 per month, while the lowest-paid workers would receive 80% of their income. 

The White House has previously estimated the plan for 12 weeks of paid leave would cost $225 billion over the next 10 years.

  • 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.

One provision that Manchin has objected to is the  $150 billion "clean electricity performance program," which would pay utility companies that increase their renewable energy supplies by 4% per year. Companies that do not hit this benchmark would face financial penalties. The bill also provides significant funding for forest management and other wildfire control measures.

There are also measures to incentivize the buying of electric vehicles and the construction of charging stations; consumer rebates to homeowners who weatherfit their houses; and financial penalties for oil and gas producers for methane leaks, among other things. 

  • Lesser-known provisions

The massive bill has a slew of lesser-known provisions as well. 

For instance, the bill would authorize $5 million a year for the Small Business Administration for an entrepreneurial program for formerly incarcerated individuals. 

The bill also directs $2.5 billion for the Justice Department to award competitive grants or contracts to local governments, community-based organizations and other groups to support intervention strategies to reduce community violence. 

How they plan to pay for it

Democrats have also included a tax plan to pay for the provisions in the bill. 

The corporate tax rate would rise from 21% to 26%, and the top income tax rate for Americans making over $400,000 would increase from 37% to 39.6%. The top capital gains rate would also go from 20% to 25%.

Democrats are also looking to beef up tax enforcement by the Internal Revenue Service as a vehicle for paying for the package. 

The Joint Committee on Taxation estimates the tax changes spearheaded by Democrats would raise more than $2 trillion in revenue over 10 years, with roughly $1 trillion in tax increases from high-income Americans and nearly $1 trillion from corporate and international tax reforms.

A new obstacle emerges

Manchin revealed to National Review last week that he wants the social spending package to include the Hyde Amendment, a legislative provision that bars the use of federal dollars for abortions except in cases of rape, incest or when the life of the mother is in danger.

But his demand for it to be included in the sweeping plan is yet another area of tension with progressive lawmakers. Congresswoman Pramila Jayapal of Washington, chair of the Congressional Progressive Caucus, told CNN she cannot support a bill that includes the Hyde Amendment.

Asked about including the Hyde Amendment in the proposal, White House press secretary Jen Psaki told reporters Mr. Biden opposes the policy, a position he staked during the presidential campaign, but declined to further discuss the negotiations over the package.

Cara Korte contributed to this report.

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