The White House announced this Thursday (28) a new version of the Build Back Better plan, which includes social and environmental programs, worth US$1.75 trillion (R$9.83 trillion). The initial proposal foresaw spending of US$ 3.5 trillion (R$ 19.62 trillion), in other words, almost double the reformulated plan.
The retreat is an attempt to resolve internal clashes in the Democratic Party, the same as President Joe Biden, which has been going on for months. The progressive wing wants more comprehensive programs, while two centrist senators advocate less public spending. Since the Democratic majority in the Senate is tight (50% plus the tiebreaker), plans cannot be passed without full union of the party.
The new figure is within what Senator Joe Manchin, one of those who disagreed with the original plan, had said he considered acceptable. Late in the afternoon, he said the value of the new proposal “is not too high” and called the text “a negotiated case”.
The progressive wing also looks at next steps. In addition to the removal of items, one of the issues is that the White House released a basic structure of the plan, not the bill itself, which brings details of the programs. House Speaker Nancy Pelosi said the final text is under review at the House.
The progressive group adopted the strategy of forcing the government to move forward with the social package, using as a form of pressure blocking the approval of another plan, worth around US$ 1.2 trillion in infrastructure investments, which has already been approved in the Senate. in August and depends only on the approval of the House, a House in which the Democrats have a majority.
During the day, there was an expectation that at least the infrastructure package could be approved by night, but there was no progress, as the progressives maintained their position: they will only vote in favor of the plan if it is certain that Build Back Better also passes. . Thus, there is no scheduled date for the analysis of the themes.
If approved, the packages will be the largest set of social investments made in decades in the US and could help reduce social inequality, one of the themes of Biden’s presidential election campaign. The plan calls for a total of US$1.75 trillion (R$9.83 trillion) in social and environmental investments and another US$100 billion (R$560 billion) for immigration-related spending.
​The current Build Back Better proposal includes US$400 billion to universalize access to preschool for children ages three and four and expand children’s access to health plans.
The advance of access to preschool, which is expected to benefit 6 million families, will help women have more free time to work and study, as the high cost of early childhood education means that many mothers have to stay at home taking care of them. of children all day.
“This is the first legislative package in the country’s history that emphasizes the central role of women, especially non-whites, in the economy, by linking economic recovery to their advancement in work”, says Patrick Gaspard, director of the think tank Center for American Progress.
There will also be funds to increase access to housing, health plans and benefits for low-income workers. In the environmental area, there will be US$ 555 billion (R$ 3.1 trillion) for investments in the transition to clean energy, such as the adoption of electric cars, which will help the US reach the goals to reduce the emission of pollutants in the coming years .
On the other hand, ideas such as substantially expanding free access to universities, reducing the price of medicines and guaranteeing paid sick leave for workers were left out.
“Nobody got everything they wanted, including me. But that’s compromises and consensus, the only way to do great things in a democracy,” Biden said, speaking at the White House after meeting with lawmakers in Congress this Thursday morning. .
“Build Back Better will create millions of jobs, grow the economy, invest in our nation and turn the climate crisis into an opportunity to compete and win the 21st century competition against China and every other country in the world.”
Biden spoke shortly before leaving for Europe, where he will participate in the G20 and COP26 meeting. The president seeks to speed up approval of the package before the start of the environmental conference.
One of the controversial points is how to pay for the expenses. The government proposes an increase in taxes on large companies and millionaires. The expectation is that the new rates will generate a new collection of around US$ 2 trillion (R$ 11.2 trillion), which, in theory, will prevent the country from increasing its deficit.
There will be a 15% minimum tax on the profits of large corporations, a 1% tax on the repurchase of shares made by the company that issued them, and penalties for US multinationals that have moved their headquarters to tax havens. The plan also provides for a five percentage point increase in the tax on personal income above US$ 10 million (R$ 56 million) per year, and by another three percentage points for those earning over US$ 25 million (R$ 140 million) .
The increase in charges, as well as the lack of details on how this will be done, generates criticism from businessmen. “We remain concerned that multi-trillion-dollar fees and projects could lead to high short-term inflation, reverse our economic recovery and put US companies at a competitive disadvantage,” said Neil Bradley, vice president of the US Chamber of Commerce, which represents businesses in Washington.
There will be parliamentary elections in November 2022, and some representatives don’t want to be branded for raising taxes or upsetting campaign donors.
At the same time, the delay in advancing the proposals is reducing the Democrats’ chances of having clear results to present to voters in next year’s vote. A poor election result could cause Democrats to lose the narrow majorities they have, which would make it even more difficult to pass bills in the final two years of Biden’s term.
New version of the social and environmental package provides for:
- $555 billion to combat climate change, as incentives for less polluting energy sources
- $400 billion to universalize access to school for children aged three and four; the measure should serve more than 6 million children and guarantee resources for the first six years of the program
- $200 billion in rebate or tax credits for families with children; valid for one year
- $165 billion to reduce health care spending and expand access to free, low-cost plans (Medicaid and Medicare)
- $150 billion to expand access to care for the elderly
- $150 billion to expand access to affordable housing; includes the construction of 1 million homes
- $100 billion for immigration services, to be used to speed up the analysis of visas and asylum applications, among other measures
- $40 billion for worker training and higher education grants
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