Build Back Better Act Summary

Build Back Better Act (Budget Reconciliation Bill) Summary – Updated November 15th 

Negotiations continue between the U.S. Senate and U.S. House on President Biden’s ambitious Build Back Better Act agenda, which can be passed by simple majorities in each chamber using a tool called budget reconciliation. With a looming December 3rd deadline to complete the work (the date in which the initial federal budget deadline of September 30th was extended to nearly two months ago), it became clear that the $3.5 trillion price tag was too high for some centrist Senate Democrats to support.

As a result of ongoing discussions, the White House released an agreed-to framework in late October of its new proposal coming in at $1.7 trillion to garner support in the Senate. The revised proposal has resulted in deep reductions, and in some cases elimination, of funding from what was in the original plan.

House Progressive Democrats held their support for the $1 trillion Bipartisan Infrastructure Bill in an attempt to gain assurances from all 50 Democratic Senators that they would support the pared-down plan until recently when the House passed the infrastructure proposal by a vote of 228-206. With the Senate passing that bill with 19 Republican members supporting it in August, it now becomes law.

That leaves congressional leadership returning to the bargaining table to create a final budget reconciliation bill that will receive enough support from Democrats in the House and Senate to pass finally. Current ranges for the final package’s cost are likely between the announced $1.7 trillion and $1.85 trillion, primarily impacted by whether or not paid family leave is inserted back into the language by House leadership.

While the House of Representatives is back in Washington as of mid-November, the latest estimates are that it may be one-to-two weeks after Thanksgiving until the proposal will be brought up for a final vote.

Below is an accounting of the latest proposal by subject and section in the new bill according to U.S. House Rules Committee staff.


Early Care and Education

Child Care

  • Birth Through Five Child Care and Early Learning Entitlement Program – Provides over $100 billion to support high-quality child care during the first three years and such sums in the following three years via a new child care and early learning entitlement program to provide high-quality, affordable child care for children ages birth to five, increase wages for the early childhood workforce, and invest in child care quality and supply (including facilities). Caps families’ child care copayments to ensure that no eligible family pays more than 7% of their income on child care by creating a sliding scale fee system. Eligible families earning under 75% of State Median Income (SMI) would pay nothing for child care. After a three-year phase-in period, families earning no more than 250% of SMI and with a parent or parents engaging in an eligible activity would qualify for, and be entitled to, child care assistance through a child care subsidy or grant-funded child care slot. The program ends at year six.

Pre-K

  • Universal Preschool – Provides over $18 billion during the first three years and such sums as may be necessary for the following three years for the HHS Secretary in collaboration with the ED Secretary to carry out a universal, high-quality, free, inclusive, and mixed delivery preschool program. Eligible providers include licensed child care programs, Head Start grantees; LEAs; or a consortium of those entities. Requires states to develop and implement state preschool standards and ensure all eligible providers meet such standards. Additionally, states must identify high-need communities within the state and roll out universal preschool programs in those communities before expanding throughout the state. For the first three years of the program, the federal share is equal to 100% of the state’s expenditures for preschool services, and no state match is required. In subsequent years, the federal/state share changes to 90/10, 75/25, and 60/40—reserves $2.5 billion annually to improve the compensation of Head Start staff. The program ends at year six. Provides funding for the HHS Secretary to expand Head Start and award universal preschool grants to localities located in states that have made it apparent that they will not participate in the program. Eligible localities include a Head Start agency, a local education agency (LEA), or a city, country, or other unit of general local government.

Health Care

Medicaid

  • Strengthening CHIP – This section makes comprehensive improvements to the Children’s Health Insurance Program (CHIP) for low-income children. It authorizes permanent funding for CHIP. It provides permanent funding for several programs related to CHIP, including the pediatric quality measures program and the child enrollment contingency fund to provide states with additional funding if its CHIP allotment is insufficient. It also closes a longstanding loophole and ensures that all CHIP programs can receive low-cost prescription drugs. Finally, this section provides states with the option to increase CHIP income eligibility levels above the existing statutory ceiling.
  • Further Increasing FMAP for Newly Mandatory Individuals – This section increases the Medicaid expansion FMAP to 93% through 2025.
  • Ensuring Access to Health Care for Children, Pregnant Individuals, and Others – This section makes several improvements to expand access and continuity of care to some of our most vulnerable citizens, including low-income children and new moms. It requires that state Medicaid programs provide 12 months of continuous Medicaid and CHIP eligibility to postpartum women; 12 months of continuous eligibility to children enrolled in Medicaid and CHIP; and coverage to justice-involved individuals 30 days prior to their release. It also allows states to smoothly transition out of the coverage requirements put in place during the public health emergency. This section also permanently extends the state option to simplify children’s enrollment in Medicaid and CHIP. Finally, it authorizes a new option for states to provide coordinated care for pregnant and postpartum women through a healthy home.

Perinatal Health

  • Maternal Mortality Grants to Address Social Determinants of Health and Inequity – These sections provide over $1 billion in grant funding to various programs addressing social determinants of health in maternal and postpartum health, reducing racial/ethnic disparities in maternal health outcomes, growing and diversifying the public health workforce – including doulas – for maternal health, serving maternal mental health needs, and improving maternal morbidity/mortality outcomes.

Lead Remediation

  • Lead-Based Paint Hazard Control and Housing-Related Health and Safety Hazard Mitigation in Housing of Families with Lower Incomes – This section provides $5 billion to address lead paint and other health hazards in the housing stock of the United States.
  • USDA Rural Water Grants for Lead Remediation – This section provides $970 million to the Secretary to make grants under sections 306C(a)(1)(A) and 306(a)(2) of the Consolidated Farm and Rural Development Act to replace service lines that contain lead.

Nutrition

  • Expanding Community Eligibility – Invests in free school meals by allowing nearly 9 million more children to access meals through the Community Eligibility Provision (CEP). This section: (1) increases the CEP multiplier, which is used to determine the federal reimbursement rate to schools, from 1.6 to 2.5; and (2) lowers the participation threshold for schools to elect CEP from 40% to 25% of identified students. Additionally, it allows for the statewide election of CEP. These changes are in effect through FY26.

K-12 Education

  • Career and Technical Education – Provides $700 million to ED over a six-year period through September 30, 2027, to carry out activities related to Career and Technical Education, of which $600 million is for State grants authorized under the Carl D. Perkins Career and Technical Education Act of 2006 (Perkins CTE Act) and $100 million is provided for innovation and modernization grants authorized under that Act.

Other Provisions

Tax Credits

  • Child Tax Credit – Provides a one-year extension of the increase in the child tax credit (CTC) as enacted in the American Rescue Plan and a continuation of advance payments through 2022. Thus for 2022, the CTC is $3,000 ($3,600 for children under age 6) – and for most taxpayers – the credit is advanceable. However, in 2022, unlike 2021, only taxpayers with incomes below $150,000 (in the case of a joint filer), $112,500 (in the case of a head of household), and $75,000 in the case of any other filer will receive advance payments. The eligibility for advance payments will be based on the taxpayer’s prior tax return information.