Summary of House-passed Build Back Better Act
November 22, 2021
Below is a brief summary of a number of the key provisions of the House-passed Build Back Better Act (BBBA).
Housing & Community Development: The measure would provide:
- $65 billion for formula and needs-based public housing programs.
- $25 billion for the HOME Investment Partnerships Program to construct and rehabilitate affordable homes for low-income families, and $750 million for a new Housing Investment Fund to leverage private-sector investments to create and preserve affordable homes.
- $24 billion for Housing Choice Vouchers and support services, including for individuals at risk of homelessness and for survivors of domestic violence and sexual assault.
- $10 billion to offer down payment assistance to first-generation homebuyers, and $5 billion for the Home Loan Program to subsidize 20-year mortgages for first-generation homebuyers.
- $3.05 billion for the Community Development Block Grant (CDBG) program.
- $3 billion for a new Community Restoration and Revitalization Fund offering competitive grants to local partnerships led by nonprofits for accessible housing and neighborhood revitalization initiatives.
- $2 billion for rural rental housing to support new construction, the removal of safety hazards, and energy efficiency improvements.
- $2 billion for a new grant program to make energy efficiency upgrades to affordable housing.
- Affordable Housing Access Program: The BBBA includes nearly $10 billion for this new competitive grant program. Local public transit agencies and other entities would be eligible to compete for funding, which could be used for a variety of purposes aimed at expanding accessibility to affordable housing options.
- Community Climate Grants: The bill includes $3 billion in competitive grant funding that counties and other entities could use to carry out key carbon reduction activities, including a variety of projects designed to reduce transportation-related GHGs.
- Neighborhood Access and Equity Grants: The legislation includes $2.37 billion in competitive grant funding for eligible entities to carry out projects that, among other things, improve neighborhood safety and expand affordable transportation options, including the construction of complete streets.
ACA Premium Tax Credits: The measure would extend through 2025 the temporary expansion of Affordable Care Act (ACA) health insurance premium tax credits that were provided under ARPA.
Medicaid: The legislation would make inmates eligible for Medicaid coverage 30 days before their release. It also would increase the federal match (FMAP) by 6 percentage points for states that expand home and community-based services and would provide an 80 percent FMAP for administrative costs.
Children’s Health Insurance Program: The measure would permanently authorize the Children’s Health Insurance Program (CHIP). It would also require states to extend continuous CHIP and Medicaid coverage to all pregnant and postpartum individuals for one year after birth and to all children for one year after enrollment.
Health Funding: The measure would provide:
- $7 billion for public health infrastructure and $2 billion for community health center grants.
- $2.5 billion for community violence and trauma prevention grants or contracts.
- $1.3 billion for public health preparedness research and development for public health emergencies.
Child Nutrition: The legislation would provide funding for child nutrition programs, including:
- Expanding eligibility for free school meals, allowing entire states to participate, and increasing the reimbursement rate schools are paid for the meals.
- Providing additional funding for the Summer Electronic Benefits Transfer (EBT) for Children program. The program would provide children eligible for free or reduced-price school meals with $65 per month in food benefits when school is out of session for the summer.
Child Care: The measure would establish a new child care entitlement program, which would expire after fiscal 2027. It would cap child care costs at a maximum of 7 percent of family income, using a sliding scale that would apply to those up to 250 percent of the state median income.
Universal Pre-school: H.R. 5376 would provide free pre-school to all three- and four-year-old children. States would be directed to begin rolling out the programs in high-need and low-income areas first before expanding to other areas. It should be noted that federal funding would cover 100 percent of state expenditures in the first three years, then it gradually decreases to about 64 percent of costs by 2027.
Child Tax Credit: The measure would extend the American Rescue Plan Act’s (ARPA; P.L. 117-2) expanded child tax credit for one year and limit advance payments to taxpayers with income below $150,000 for joint filers and $75,000 for single filers. It also would make the credit fully refundable.
Earned Income Tax Credit: H.R. 5376 would extend an expanded version of the earned income tax credit for childless workers for one year.
Adult Protective Services: The bill would provide $415 million for each of fiscal years 2023-2025 for state and local APS programs.
State and Local Tax Deduction: H.R. 5376 would increase the cap on the state and local tax (SALT) deduction to $80,000 – up from $10,000 – through 2030. Thereafter, the cap would return to $10,000 in 2031 and then expire. The current cap, which was established under the 2017 tax law (P.L. 115-97), is scheduled to end in 2025. For his part, Senator Bernie Sanders (I-VT) is pushing his own compromise provision that would restrict SALT deductions to only those who earn up to a certain level – roughly $400,000 to $550,000.
Immigration: The legislation would direct the Department of Homeland Security to grant applications for “parole” to undocumented immigrants who arrived in the U.S. prior to January 1, 2011. Individuals paroled under the bill would receive employment and travel authorization and would be eligible for driver’s licenses or other state-issued identification cards. The legislation also includes provisions that would recapture unused visas, expedite status adjustment applications for legal immigrants, and help address visa processing backlogs.
Paid Leave: The bill would establish a new federal program to provide as many as four weeks of paid family and medical leave for the birth or adoption of a child, to care for a family member with a serious health condition, or for an employee’s own serious health condition. The benefit, which would start in 2024, would be tied to an individual’s average weekly earnings and hours. States with preexisting paid leave programs would receive federal funding to cover the equivalent costs of the benefits, and employers would receive grants to cover 90 percent of their paid leave benefits.
Prescription Drugs: The measure would direct the Department of Health and Human Services to establish a “Drug Price Negotiation Program” to negotiate prices on high-cost prescription drugs for Medicare Parts D and B beginning 2025. Pursuant to the legislation, HHS would be required to identify 100 drugs without competition that have been on the market for seven years and biologics that have been on the market for 11 years, and that have the highest spending under Medicare. HHS would then select as many as 10 drugs from that list for negotiation in 2025 and as many as 20 drugs by 2028, plus insulin. Beginning in 2023, the measure would require private health plans to cover at least one of each type of insulin, with copays not to exceed $35 a month.
Medicare Hearing Benefits: H.R. 5376 would expand Medicare coverage to provide hearing benefits beginning in 2023. The benefit would include hearing assessment services and hearing aids.
Clean Energy and Climate-Focused Programs: The measure would establish or extend a number of renewable energy tax credits. The credits could accelerate investments in both utility-scale and residential clean energy as well as electricity transmission, power storage, and clean-energy manufacturing. In addition, the BBBA would provide funding for clean energy and environmental initiatives, including:
- $29 billion to support non-federal financing to deploy zero-emission technologies, including solar rooftop systems and zero-emission vehicles.
- $9 billion to replace lead water service lines in disadvantaged communities and install lead filtration equipment in schools and child care centers that serve those areas.
- $6.3 billion for rebates for high-efficiency electric home appliances like HVAC systems, stoves, ovens, and clothes dryers.
- $5.9 billion for a new Home Owner Managing Energy Savings (HOMES) rebate program to support home energy efficiency retrofits.
- $5 billion for grants supporting the creation and implementation of state greenhouse gas air pollution reduction plans.
- $5 billion for grants and rebates to replace school buses, garbage trucks, and other heavy-duty vehicles with zero-emission vehicles and to train workers to operate them.
- $3.5 billion for grants supporting domestic production of plug-in and hydrogen fuel cell electric and hybrid vehicles.
- $3 billion for block grants and technical assistance for community-led pollution and emissions reduction activities, mitigating urban heat islands and wildfire effects, and reducing indoor air pollution.
- $2 billion for grants and loans for new and upgraded electric transmission lines to integrate clean energy and improve the grid’s resilience. An additional $800 million would be provided for grants to facilitate siting of transmission lines across state lines.
- $1 billion for grants to states supporting electric vehicle infrastructure deployment.
Electric Vehicles: The measure would establish new incentives for electric vehicles, including:
- A refundable tax credit for new electric vehicles through 2031 that would phase-out beginning at $500,000 for joint filers and $250,000 for single filers. The base credit amount would equal $4,000, plus an additional $3,500 for vehicles with a higher battery capacity. The credit would be increased by $4,500 for domestically assembled, union-made electric vehicles. Beginning in 2027, the credit would apply only to vehicles with final assembly occurring in the U.S.
- A refundable credit for purchasing a used electric motor vehicle through 2031. It would phase out at $150,000 for joint filers and $75,000 for single filers.
- A 30 percent credit for the cost of commercial electric vehicles through 2031, or 15 percent for hybrid vehicles.
- A 30 percent refundable credit for electric bikes through 2026 that would also phase out at certain income levels.
Methane Fee: The legislation would establish a fee on methane emissions from the oil and gas industry. It would apply to emissions from onshore and offshore production, processing, transport, and storage operations that exceed thresholds for each segment of the industry.
Hazardous Fuels Reduction: The bill would provide $14 billion to reduce hazardous fuels in National Forest System lands near developed areas, $4 billion of which could be used in other areas in certain circumstances. More than $3 billion in additional funds would be available for grants to reduce wildfire risks on non-federal land.
Workforce Support: The measure would provide funding for several workforce development initiatives, including:
- $6.9 billion to support climate resilience and mitigation projects funded by the Corporation for National and Community Service
- $4.3 billion for employment and training activities in jobs related to climate resilience and mitigation.
- $2 billion for dislocated worker grants under the Workforce Innovation and Opportunity Act (WIOA).
- $1.5 billion for WIOA state grants for youth workforce investment activities and $1 billion for adult worker employment and training activities.
- $1 billion for grants to support the direct care workforce through competitive wages, child care, and training.
Rural Partnership Program: The bill would establish a new Rural Partnership Program that aims to enhance rural communities’ access to federal community and economic development funding by providing flexible grants and technical assistance.
Flood Insurance: The measure would wipe out $20.5 billion in debt owed by FEMA for money it borrowed to pay claims through the National Flood Insurance Program. It also would provide $600 million for flood mapping and $600 million for FEMA to offer flood insurance discounts to certain policyholders.
Conservation: The BBBA would provide $3.75 billion for competitive grants to promote conservation and tree planting by state, local, and tribal governments and nonprofit organizations. It also includes $1.25 billion for conservation/resiliency projects on federal lands, as well as an additional $750 million for ecosystem and habitat restoration.
Historically Black Colleges and Universities: The measure would provide $6 billion to support historically Black colleges and universities (HBCU’s) and minority-serving institutions (MSI’s), as well as $3 billion for a grant program for HBCU’s and MSI’s to improve research and development infrastructure.
USPS: H.R. 5376 would provide $6 billion for the U.S. Postal Service to purchase electric delivery vehicles and related infrastructure.
Supply Chains: The measure would provide $5 billion to support the Commerce Department’s manufacturing supply chain resilience efforts. Funding would be used to map and monitor supply chains, establish best practices, deploy advanced technology, and provide grants to boost supply chain resilience.
Community Violence Reduction: The legislation would provide $2.5 billion to the Justice Department for grants and contracts to support community violence reduction programs.
Older Americans Act: The bill would provide $1.2 billion to fund Older Americans Act programs, including home and community-based supportive services, nutrition programs, and family caregiver support.
Tax Provisions: The legislation imposes a 15 percent minimum corporate tax, as well as a one percent excise tax on companies when they buy back their own stock. It also includes a 15 percent minimum tax on corporations’ foreign profits and a series of changes that would increase taxes on companies that shift their profits offshore. In addition, the measure would place a 5 percent levy on individual incomes in excess of $10 million and an additional 3 percent tax on those over $25 million.
Increased IRS Enforcement: The bill would provide an additional $80 billion to the Internal Revenue Service to hire more auditors, improve customer service, and modernize technology.