With 19 Republicans joining all Democrats, the Senate has passed the bipartisan $1.2 trillion Infrastructure Investment and Jobs Act by a 69-30 vote on Tuesday, August 10, 2021. It includes billions for improving broadband, roads, bridges, rail, ports, airports, public transit, power and water systems, adding electric school buses and electric vehicles to municipal fleets as well as adding EV charging ports in cities and highways nationwide, and much more. The bill changes taxation of cryptocurrency and delays implementation of a drug rebate rule which the Biden administration in February had already agreed to delay until 2023.
The bill does not include improvements to VA hospitals, corporate tax hikes, and many other measures President Biden was hoping to include in his American Jobs Plan. But immediately following passage of the bill, the Senate voted to begin movement on a single-party $3.5 trillion budget reconciliation agreement to encompass some of his other priorities as well as his American Families Plan proposals like universal paid family leave, extended child tax credit enhancements, tuition free pre-K for 3- and 4-year old children, tuition free community college, and many other initiatives outlined in their memo. The concurrent resolution to move forward with this passed 50-49 around 4am Eastern time Wednesday, August 11, after 14 hours of vote-a-rama amendments. There are roughly $1 trillion dollars in health related provisions, climate change and immigration initiatives, along with numerous other measures impactful to employers and their employees (all subject to change):
- $400 billion home and community-based care expansions
- Medicare expansions ($238 billion to add dental coverage, $89 billion to add hearing coverage, $30 billion to add vision coverage, and $200 billion to lower eligibility to 60) coupled with anticipated savings by allowing Medicare to negotiate drug prices
- $50 billion to address provider shortages (Graduate Medical Education)
- $30 billion for pandemic preparedness
- Long-term care (HCBS)
- Health equity (maternal, behavioral, and racial justice health investments)
- Paid Family and Medical Leave (total of 12 weeks of paid parental, family and personal illness/safe leave by the program’s tenth year)
- Extension of the ACA tax credit expansions that have helped an additional 2.5 million individuals enroll in public Marketplaces, and filling the Medicaid gap in states that have not yet expanded Medicaid
- Extension of child tax credit, earned income tax credit, and child and dependent care tax credit (CTC/EITC/CDCTC) expansions (including the monthly direct payments of up to $250 or $300 per child based on age)
- $726 billion to provide:
- Child care credits for working families earning up to 1.5 times the median state income so they do not pay more than 7% of their income for child care under age 5
- Universal no-cost pre-K for 3- and 4-year old children for all income levels (potentially 50% funded by states)
- Two years of tuition-free community college (potentially 25% funded by states)
- And many education investments to prepare the future workforce
Corporate and international tax reform, more taxes on high-income individuals, IRS tax enforcement, and a Carbon Polluter Import Fee are some of the ways Democrats aim to pay for at least half of the cost of their budget reconciliation initiatives. Again, none of this is set in stone as it’s just instructing committees to draft up their proposals, but these are the directives they’ve been given to aim for.
The bipartisan bill and concurrent resolution will now go to the House, where leadership will begin deliberations in about two weeks (after returning a month early from August recess on August 23). Since House Speaker Nancy Pelosi has announced her intention to not bring the bipartisan bill to a vote until the budget reconciliation measure is secured, the bills will likely not come to a vote for many weeks or even months.
IMA will continue to monitor regulator guidance and offer meaningful, practical, timely information.
This material should not be considered as a substitute for legal, tax and/or actuarial advice. Contact the appropriate professional counsel for such matters. These materials are not exhaustive and are subject to possible changes in applicable laws, rules, and regulations and their interpretations.