What’s inside Joe Biden’s $1.85 trn social and climate measure

President Joe Biden’s USD 1.85 trillion plan to boost social and education programmes as well as protect against global warming has passed the House, pushing it one step closer to law.

The 2,135-page bill includes universal preschool, funding to limit child care costs, expanded health care programs and a one-year continuation of a child tax credit, among many other provisions.

But Democrats are scaling back some investments and shortening the timeframe for some programs to whittle down the cost. Some proposals have been dropped entirely.

The bill will still have to clear the Senate, where revisions are nearly certain. But Democrats are aiming to get it to Biden’s desk by Christmas. Republicans are lock-step against the measure, leaving Democrats to pass it on their own.

Here’s what’s in the package, based on summaries provided by the White House and the House.

FAMILY/CHILD CARE

Eligible workers would receive up to four weeks of paid leave to reimburse them for time taken to care for a new child or other family members or to recover from illness. Biden had initially proposed 12 weeks of paid family leave.

Federal subsides would ensure that parents earning up to 250% of a state’s median income would pay no more than 7% of their income on child care. Parents must be working, seeking a job, in school or dealing with a health issue to qualify.

EDUCATION

Universal prekindergarten would be established for all 3- and 4-year-olds and child-care subsidies would be provided for poorer and middle-income Americans. But the programs are funded only for six years.

USD 40 billion would be provided for higher education and workforce development. This includes raising the size of Pell Grants and providing funding for historically Black colleges and universities as well as institutions that largely serve Hispanic students or tribal communities.

ENVIRONMENT/CLIMATE CHANGE

Clean energy tax credits would receive USD 320 billion worth of funding. These credits over 10 years would help businesses and homeowners shift to renewable energy sources for electricity, vehicles and manufacturing.

USD 105 billion would be spent to improve communities’ ability to withstand extreme weather events, which have been worsened by climate change. The funding would also create a Civilian Climate Corps that focuses on conserving public lands and bolstering community resilience to flooding, drought and other weather emergencies.

USD 110 billion would help develop new domestic supply chains and develop new solar and battery technologies. Support would also be given to existing steel, cement and aluminum industries.

USD 9 billion would be allocated for lead remediation projects, such as the replacement of water lines or the replacement of school drinking water fountains that may contain lead.

HEALTH CARE

Medicare would be expanded to cover hearing aids, costing an estimated USD 35 billion over 10 years.

Out-of-pocket Medicare Part D costs for older Americans would be capped at USD 2,000 per year and the price of insulin reduced to no more than USD 35 a dose.

A Medicare drug negotiation program would be established. Each year, the secretary of Health and Human Services would identify 100 brand-name drugs that lack price competition and from that list negotiate the price of up to 10 drugs in 2025, 15 in 2026 and 2027, and 20 thereafter.

Expanded tax credits to help cover insurance premiums under the Affordable Care Act would be extended through 2025. The White House says that would help 3 million uninsured people gain coverage.

USD 150 billion would be given to a Medicaid program that supports home health care, helping to clear a backlog and improving working conditions.

USD 90 billion would go toward investments that would include funding maternal health, community violence initiatives, disadvantaged farmers, nutrition and pandemic preparation.

HOUSING

USD 150 billion would be committed toward housing affordability with a goal of building more than 1 million new rental and single-family homes. The goal would be to reduce price pressures by providing rental and down payment assistance.

TAX BREAKS

An expanded child tax credit would continue for another year. As part of a COVID relief bill, Democrats increased the tax credit to USD 3,000 per child ages 6-17 and USD 3,600 per child 5 and under. Households earning up to USD 150,000 per year get the credit paid to them on a monthly basis.

The expanded Earned Income Tax Credit that goes to 17 million childless, low-wage workers would continue for one year.

TAXES

Biden’s plan bolsters the IRS to improve collections and close the gap between taxes owed and taxes paid.

A 15 per cent minimum income tax would be applied to large corporations. The U.S. would also be aligned with an agreement reached by more than 100 countries designed to deter multinational companies from stashing profits in low-tax countries.

The bill would create a new surtax on multimillionaires and billionaires and close a provision that allows some wealthy taxpayers to avoid paying the 3.8% Medicare tax on their earnings.

A USD 10,000 cap on state and local tax deductions would be raised to USD 80,000. Tax analysts say the change would largely benefit high-income households.

A 1 per cent surcharge would be imposed on corporate stock buybacks, which Democrats said are often used by corporate executives to boost their finances rather than investing in the business and its workers.

IMMIGRATION

Those who entered the United States prior to Jan. 2, 2011, and have continuously resided there since would be eligible for renewable parole grants for five years after paying an administrative fee and completing security and background checks.

The parole status gives recipients authorisation to travel and work in the U.S. and deems them eligible for a Real ID-compliant driver’s license or a state identification card.

WHAT’S OUT OF THE BILL

Democrats removed a proposal to expand Medicare to cover dental and vision care because of concerns about the cost.

A proposal to allow for up to two years of free community college is also out.

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