The US House of Representatives approved this Friday morning (19) the package of social and environmental investments proposed by the government of Joe Biden. The plan, which foresees a total of US$ 1.85 trillion (R$ 10.30 trillion) in expenses, still needs to be approved by the Senate, where it could undergo alterations.
As a comparison, Brazil’s GDP (gross domestic product) in dollars was US$1.44 trillion in 2020.
The vote was scheduled for Thursday night, but was postponed because Representative Kevin McCarthy, leader of Republicans in the House, gave an eight-and-a-half-hour speech in a move to hinder the proposal’s progress. He started speaking at around 8:30 pm (10:30 pm BrasÃlia time) and left the microphone just after 5:00 am on Friday.
Representatives took a break after that, reconvened at 8 am, and approved the package at 9:46 am. The measure had 220 votes in favor and 213 against. Only one Democrat was against the measure, and no Republican supported it.
Dubbed BBB (Build Back Better), the package approved by the Chamber is part of Biden’s main agenda in this beginning of government: increase public spending to generate jobs, lower the cost of living for the middle class and make the US more competitive in the scenario global. The text also aims to help reduce social inequality, one of the themes of the Democratic election campaign in 2020.
The other half of that agenda, a $1.2 trillion ($6.68 trillion) package of infrastructure spending, was approved in early November and sanctioned on Monday (15). The two plans are the largest set of federal investments in the social and structural area in the country in at least 50 years.
“We have a Build Back Better that is historic, transformative and bigger than anything we’ve had before. If you’re a parent, an elderly person, a child, a worker, if you’re an American, this law is for you.” , said Nancy Pelosi, Speaker of the House, before the vote.
The advance of this Thursday also signals a relaxation in the internal stalemates between Democrats, which paralyzed the progress of Biden’s proposals for months. Moderate parliamentarians (who wanted less public spending) and progressives (advocates of more ambitious programs) struggled to reach a compromise.
These discussions also relativize the size of Biden’s victory in the Chamber: the approved package, after all, is much smaller than initially planned, in the order of US$ 3.5 trillion — the cut was made to meet the demands of congressmen more than the center. And the issue will only be closed when the text is approved in the Senate.
The current version of the BBB provides a total of $1.75 trillion in social and environmental investments and another $100 billion in immigration-related spending. Of the initial total, US$ 555 billion will be allocated to combating climate change, as incentives for less polluting energy sources (see the details of the packages at the end of this text).
On the social side, there will be US$ 400 billion for universal access to pre-school for children aged three and four and expansion of children’s access to health plans. The measure is expected to benefit 6 million families and help women have more free time to work and study, since the high cost of early childhood education means that many mothers have to stay at home taking care of their children.
The package will also allocate funds to expand access to health care and housing for low-income Americans.
To defray the new expenses, the government proposed adopting 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 American multinationals that moved their headquarters to paradises. tax.
The plan also calls for a five percentage point increase in personal income tax over $10 million a year and a further three percentage points for those earning over $25 million.
With this, the expectation is to raise US$ 640 billion more from very rich individuals and US$ 814 billion from corporations, between 2022 and 2031, according to an estimate by the Congress’ Tax Commission.
The White House argued that the BBB would not affect public debt, but a report by the House Budget Committee, released on Thursday, estimates that it will generate a deficit of $367 billion in federal accounts over the next ten years. After the release of the report, the Biden administration reaffirmed that the increase in the deficit will not occur, and that the commission did not take into account future measures by the government to strengthen the fight against tax evasion.
Biden also argues that packages are a way to lower inflation. In October, the price increase in the last 12 months reached 6.2%. The government’s expectation is that the measures will reduce spending for poor and middle-class families, by subsidizing day-to-day expenses. And that the new expenses will not generate imbalance in the public accounts as they are supported by new taxes.
The president hopes that the expansion of access to preschool will make more women able to return to work, as many do not because they have nowhere to leave their children. Thus, there would be more people available to fill the vacancies open in the country.
Critics point out that the lack of workers registered since last year is also related to the fact that many people have chosen not to return to low-paid jobs while receiving emergency aid. So, in their view, giving more support now could discourage job search and cool the economy.
ËœAs our economy faces the highest inflation in 31 years, supply chain challenges and a shortage of workers, the multi-trillion dollar package passed by the House will only make things worse. It will create uncertainty for businesses and families and undermine our fragile recovery, the US Chamber of Commerce, which brings together business sector entrepreneurs, said in a statement.
Opponents also say that the excess of social benefits paid by the government brings the US closer to socialism and that, with more money in their pockets, Americans will spend more, increasing pressure on prices. They also believe that raising taxes on companies and millionaires could lead them to invest less in the country and to take their fortunes to other markets.
Criticism comes especially from Republicans, but some moderate Democrats also have doubts, including Democratic senators Joe Manchin and Kyrsten Sinema. Their opposition to the plan delayed the proposal for months and led to a substantial reduction in values.
The two are empowered to define the direction of the administration because the Democratic majority is very narrow: 50% of the senators plus the tiebreaker (from Vice President Kamala Harris, who chairs the sessions). Thus, if a single member of the party opposes it, it stops the advancement of agendas — considering that republicans, in the case of the social package, closed an issue against the text.
The expectation is that the vote in the Senate will take place before Christmas. The BBB must be included in the legislative mechanism called reconciliation, which allows the approval of measures related to the Budget with a simple majority. However, it will be necessary to define what other proposals and measures will be included to be processed with him.
One of the points is the extension of the country’s debt ceiling, which, if not increased or canceled, will leave the US with no money to honor commitments from December 15th. The problem received a palliative solution months ago.
The new investments could also boost Democratic candidates in midterm elections, scheduled for November 2022. Biden currently has a 40 percent approval rating, and there are fears the Democrats could fare poorly at the polls. This could lead the party to lose control of the Chamber and Senate, which is now assured with narrow margins.
THE BIDEN PACKAGES
BBB (Build Back Better)
Status: approved by the Chamber. Awaits Senate analysis
Proposal foresees:
- $555 billion to combat climate change, such as incentives for less polluting energy sources and funds for reforestation
- $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
- $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
Infrastructure
Status: already approved and sanctioned by the president, is beginning to be implemented
Includes:
- $110 billion for new projects and repairs to roads, bridges and road structures
- $66 billion for rail transport, cargo and passengers
- $39 million for public transport in cities
- $11 billion for traffic safety, such as the prevention of being run over
- $7.5 billion to expand the charging network for electric vehicles
- $5 billion to buy new electric school buses
- $1 billion to recover communities that were degraded by the proximity to roads
- $25 billion for the airport sector
- $17 billion for the ports sector
- $50 billion for combating and preventing droughts and floods
- $55 billion to modernize the water supply
- $73 billion to improve electricity transmission networks
- $65 billion for new fast internet networks
- US$21 billion for environmental recovery of degraded areas, such as former industrial districts
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