House Passes Build Back Better Act – Will Senate Follow Suit? – DTN

    U.S. Capitol building - Washington D.C. Photo: Licensed image.

    The House of Representatives on Friday passed President Joe Biden’s $2 trillion package of social agenda items that includes a boost in spending for climate-smart agriculture through conservation, forestry and rural development initiatives.

    Culminating after months of a partisan split in House committees over its provisions and spending, the House narrowly passed a broad budget reconciliation bill, dubbed the Build Back Better Act — referring back to Biden’s campaign platform. The bill passed 220 to 213 with Republicans in unanimous opposition and a lone Democrat opposing the bill. One GOP member did not vote. The Democratic side of the chamber erupted in applause as the final votes were cast.

    Still, passage of the bill in the equally divided Senate remains uncertain.

    The legislation includes more than $1 trillion in tax provisions, while boosting spending programs for climate change and renewable energy, as well as health care, childcare, education and immigration. The House voted after months of inner-party debate among Democrats that scaled back the plan. The Congressional Budget Office (CBO) projected the bill would increase the federal budget deficit $367 billion over 10 years. The White House took a different view, citing that new IRS provision would generate $400 billion more in revenue.

    The House vote comes after Congress completed its work on a $1.2 trillion bipartisan, wide-ranging hard infrastructure bill Biden signed into law earlier this week. Unlike the infrastructure package, which had broad support from the business community, the Build Back Better Act has proven more divisive. For more details, see “Infrastructure Bill Heads to President” here.

    The House initially was expected to vote Thursday night, but House Minority Leader Kevin McCarthy, R-Calif., took advantage of a leadership privilege giving him unlimited floor time to talk for more than eight hours against the bill, repeatedly criticizing “one party rule” and maintaining the bill would lead to socialism. Among McCarthy’s points in his wide-ranging speech, he said the spending in the bill would further fuel inflation around the country. Republicans have increasingly tied the country’s inflation to policies by Biden and Democrats.

    “You are spending so much money!” McCarthy said, saying the country spent less to fight World War II. “You’re celebrating it when inflation is at a 31% high!” he said, pointing to higher gas prices and food prices for Thanksgiving dinner.

    McCarthy’s strategy forced Democrats to push the vote into Friday. House Speaker Nancy Pelosi, D-Calif., then briefly defended the bill before the round of votes began, noting its $2 trillion total cost over 10 years was less than the amount of deficit that came from the 2017 tax cuts bill.

    Among farm groups, the American Farm Bureau Federation had called on House members earlier this week to oppose the bill, pointing to concerns about inflation and indirect tax increases that could affect farmers. Farm Burau said the country could not afford to raise taxes and spend more taxpayer dollars. (here)

    Grain News on AgFax


    Other agricultural groups have backed the bill. The National Farmers Union in October had urged lawmakers to pass the bill to help farmer address climate change. NFU noted other provisions in the bill would help rural America, including improving the quality and affordability of health care, and helping more children gain access to healthy meals. The National Sustainable Agriculture Coalition and 62 other groups in August had supported the bill’s climate-smart agricultural provisions as well.

    Beyond spending, the bill would give legal status to undocumented workers who have worked in the country since at least 2011, giving them renewable five-year visas.

    CBO pegged the overall agricultural provisions in the bill at $81.7 billion over 10 years. The bill would spend roughly $27.1 billion on conservation with funds divvyed up among the major farm-bill programs. The funds would primarily pay farmers to increase climate-smart practices on their farms that sequester carbon and lower greenhouse emissions.

    That includes $9 billion for the Environmental Quality Incentives Program (EQIP); $7.45 billion for the Regional Conservation Partnership Program (RCPP); $4.1 billion for the Conservation Stewardship Program (CSP); and $1.7 billion for the Agricultural Conservation Easement Program. The White House stated “at its peak” the climate-smart programs could reach as many as 130 million crop acres.

    Another $25.3 billion would go toward USDA Rural Development programs. Within that area would come $9.7 billion in aid for rural electric cooperatives and $2.9 billion in loans for renewable energy. Another $1.96 billion for the Rural Energy for America Program (REAP) and $960 million for biofuel infrastructure. The bill also includes a new $970 million Rural Partnership Program that will establish competitive rural grants for states and tribes.

    The bill also extends the $1-a-gallon Biodiesel and Renewable Diesel Tax Credit through 2026, projected to generate $14.17 billion in tax credits for the biodiesel and renewable diesel industries.

    One potential boon for biofuels comes through provisions for “sustainable aviation fuels.” The bill includes research and development funds for renewable aviation fuels that reduce greenhouse gas emissions by 50%. The bill also creates a $1.25-per-gallon tax credit for the sale and use of sustainable aviation fuels, plus 1 cent per gallon for every extra percentage points of emission reduction beyond 50%.

    Forestry provisions would cost $27.2 billion. That would include $17.1 to rebuild the National Forests system and programs to “reduce wildfire fuel.” Another $6 billion would go to similar projects with non-federal forests. State and private conservation programs would receive $3.8 billion.

    The bill also would pay off nearly $7 billion in direct Farm Service Agency loans for underserved ranchers and farmers. The provision rescinds language that created 13 lawsuits from the American Rescue Plan over debt relief for minority farmers but seeks to offer comparable relief.

    On taxes, the bill changes the current 21% rate and provides a tax cut to 18% for corporations with taxable income below $400,000. The tax is increased to 26.5% for corporations with incomes higher than $5 million. The bill also sets a minimum 15% corporate tax for companies that zero out their tax liability, which would generate $318.9 billion in revenue over 10 years.

    The bill also increases taxes on higher income people and limits deductions of qualified business income (Section 199A) for married couples with more than $500,000 taxable income on a joint return.

    For families, the bill extends the $3,600 Child Tax Credit and expands the Earned Income Credit for low-wage workers without children.

    A tax provision that drew criticism would expand the State and Local Taxes (SALT) deduction from $10,000 to $72,500. Republicans have repeatedly pointed to the provision largely helping wealthier people because most people now take advantage of the $24,000 standard deduction now.

    Education programs in the bill would create new universal childcare and pre-school, costing $307 billion over 10 years. Other big-ticket items include universal paid leave at $213.5 billion over a decade. Green energy tax credits would cost $111.6 billion. The ability to negotiate drug prices also would lead to $262.2 billion in budget savings over 10 years as well.

    Overall, the tax provisions in the bill are projected to generate about $997 billion in revenue over 10 years.

    Eyes will now turn to the U.S. Senate, where Democrats cannot afford to lose any votes in the 50-50 chamber and two Democratic senators — Sens. Joe Manchin of West Virginia and Kyrsten Sinema of Arizona — have thrown up roadblocks to Biden’s social package.

    House Agriculture Committee details on provisions in the bill: here.

    Chris Clayton can be reached at Chris.Clayton@dtn.com

    Follow him on Twitter @ChrisClaytonDTN

    The Latest


    Send press releases to Ernst@Agfax.com.

    View All Events


    Send press releases to Ernst@Agfax.com.

    View All Events