Summary: Last week, the House Committee on Rules issued updated reconciliation legislation as H.R. 5376, Build Back Better Act (available here). PWBM estimates that the proposal would cost $2.1 trillion, offset by $1.8 trillion in new revenues and other savings.
In order to provide additional context as part of the current reconciliation debate, PWBM has also estimated an illustrative scenario where all spending and revenue provisions in the Build Back Better Framework are permanent. These estimates are neither PWBM’s estimate of any current legislation nor PWBM’s estimates of the Build Back Better Framework released by the House of Representatives. PWBM estimates that making all provisions of the proposal permanent would cost an additional $2.5 trillion.
| Provision | Budget effect, FY2022-2031 | |
|---|---|---|
| Proposal | Illustrative: Additional budget cost if permanent | |
| Child care and pre-school | 400 | 394 |
| Paid family leave | 195 | - |
| Home care | 150 | - |
| Child & earned income tax credits | 200 | 1,763 |
| CTC | 188 | 1,650 |
| EITC | 12 | 113 |
| Clean energy and climate investments | 555 | - |
| Clean energy tax credits | 320 | - |
| Resiliency Investments | 105 | - |
| Clean energy Investments | 110 | - |
| Clean energy procurement | 20 | - |
| ACA subsidies including Medicaid expansion gap | 136 | 250 |
| Medicare hearing benefits | 89 | - |
| Housing | 150 | - |
| Higher education and workforce development | 60 | - |
| Equity and other investments | 90 | - |
| Modification to the state and local tax deduction | -65 | 60 |
| Immigration reform | 124 | - |
| Total | 2,084 | 2,467 |
Source: Penn Wharton Budget Model
Corrected total sums on November 11, 2021.
Updated Child care and pre-school on November 15, 2021.
| Provision | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | Budget window |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Minimum tax on corporations’ book income | -7 | -20 | -23 | -25 | -27 | -28 | -30 | -32 | -35 | -38 | -264 |
| Tax on share repurchases | -4 | -5 | -5 | -5 | -5 | -5 | -5 | -6 | -6 | -6 | -51 |
| Modifications to international taxes | 0 | -31 | -35 | -39 | -27 | -27 | -29 | -31 | -31 | -32 | -282 |
| Delay of R&E expenditure amortization | 0 | 11 | 16 | 17 | 14 | -9 | -16 | -13 | -8 | -3 | 11 |
| Other business tax provisions | -5 | -11 | -11 | -10 | -9 | -9 | -10 | -10 | -10 | -11 | -96 |
| Extension of excess noncorporate losses limitation | 0 | 0 | 0 | 0 | 0 | -27 | -35 | -36 | -38 | -40 | -175 |
| AGI surcharge on high-income households | -18 | -25 | -26 | -28 | -27 | -26 | -26 | -28 | -30 | -32 | -267 |
| NIIT base harmonization | -16 | -22 | -24 | -26 | -21 | -21 | -23 | -23 | -24 | -26 | -226 |
| Modifications to retirement plan taxes | 0 | -1 | -1 | -1 | -1 | -1 | -1 | -1 | -1 | -1 | -9 |
| Other tax provisions | 0 | 1 | 1 | 1 | 0 | -1 | -1 | -1 | -1 | -1 | -2 |
| Expand nicotine taxes | 0 | -1 | -1 | -1 | -1 | -1 | -1 | -1 | -1 | -1 | -10 |
| IRS funding 1/ | 1 | 1 | -3 | -10 | -17 | -26 | -32 | -34 | -35 | -35 | -190 |
| Prescription drug price reforms | -1 | -2 | -2 | -10 | -29 | -35 | -39 | -41 | -43 | -46 | -250 |
| Total | -50 | -104 | -115 | -137 | -151 | -215 | -247 | -257 | -262 | -270 | -1,810 |
Source: Penn Wharton Budget Model
1/ Budget estimate is net of proposed outlays.