WASHINGTON (AP) — A divided House moved toward passage Thursday of Democrats’ expansive social and environment billas new cost estimates from Congress’ top fiscal analyst suggested that moderate lawmakers’ spending and deficit worries would be calmed, moving President Joe Biden closer to a badly needed victory.
Final debate on the long-delayed legislation came after the nonpartisan Congressional Budget Office said the bill would worsen federal deficits by $160 billion over the coming decade. It also recalculated the measure’s 10-year price tag at $1.68 trillion, though that figure wasn’t directly comparable to a $1.85 trillion figure Democrats have been using.
House approval would ship the legislation to the Senate and end — though just for now — months of battling between Democrats’ progressives and moderates over its costs and policies. While significant Senate changes are likely due to cost-cutting demands by moderate Sen. Joe Manchin, D-W.Va., House passage would edge Biden closer to winning more of his domestic priorities at a time when his public approval is faltering badly.
The 2,100-page bill’s initiatives include bolstering child care assistance, creating free preschool, curbing seniors’ prescription drug costs and beefing up efforts to slow climate change.
“Too many Americans are just barely getting by in our economy,” said House Majority Leader Steny Hoyer, D-Md. “And we simply can’t go back to the way things were before the pandemic.”
An initial batch of key figures released by the nonpartisan Congressional Budget Office showed that its projections were aligning closely with earlier estimates from the White House. That included tax credits to spur clean energy development, bolstered child care assistance and extended tax breaks for millions of families with children, lower-earning workers and people buying private health insurance.
The measure would provide $109 billion to create free preschool for 3- and 4-year-olds. There were large sums for home health care for seniors, new Medicare coverage for hearing and a new requirement for four weeks of paid family leave. The family leave program, however, was expected to be removed in the Senate, where it’s been opposed by Manchin.
In one major but expected difference, CBO estimated that by spending $80 billion to beef up IRS tax enforcement, the agency would collect $207 billion in new revenue over the coming decade. That meant net savings of $127 billion, well below the White House’s more optimistic $400 billion estimate.
In a scorekeeping quirk, CBO formally estimated that the legislation would drive up federal budget deficits by $367 billion over the coming decade. The agency’s budget guidelines technically require it to not count IRS savings when measuring a bill’s deficit impact. But it acknowledged that the measure’s true impact would produce added shortfalls of the lower figure — $160 billion — when counting added revenue the IRS would collect.
Biden and other Democratic leaders have said the measure would pay for itself, largely through tax increases on the wealthy, big corporations and companies doing business abroad.
Republicans said the legislation would damage an economy already racked by inflation, give tax breaks to some wealthy taxpayers and make government bigger and more intrusive. Drawing frequent GOP attacks was a provision boosting the limit on state and local taxes that people can deduct from federal taxes, which disproportionately helps top earners from high-tax coastal states.
Minority Leader Kevin McCarthy, R-Calif., railed against the package and recited problems the country has faced under Biden, including inflation, large numbers of immigrants crossing the Southwest border and the chaotic U.S. withdrawal from Afghanistan. “Yeah, I want to go back,” he said in mocking reference to the “Build Back Better” name Biden uses for the legislation.
Democrats booed as he spoke, prompting McCarthy to glare and say: “It’s OK. I’m here all night.”
Two weeks after centrists’ objections forced Democrats to delay the measure, the party’s divisions seemed all but resolved, for now. Facing uniform Republican opposition, Democrats can lose no more than three votes to prevail in the House.
In a significant sign of movement, Florida Democratic Rep. Stephanie Murphy, a leading House centrist, said she would back the measure after the latest budget figures persuaded her the legislation “is fiscally disciplined.” She said the bill is flawed but “has a lot of positive elements.”
Biden this week signed a $1 trillion package of highway and other infrastructure projects, which he’s spent recent days promoting around the country. But he’s been battered recently by falling approval numbers in polls, reflecting voters’ concerns over inflation, supply chain delays and the persistent coronavirus pandemic.
After months of talks, Democrats appeared eager to wrap it up, shelving lingering differences to begin selling the package back home. House Democrats said they were planning 1,000 events across the country by year’s end to pitch the measure’s benefits to voters. They face 2022 midterm elections in which Republicans have strong hopes for capturing control of the House and Senate.
House passage of the social and environment bill would send it to the 50-50 Senate, where Democrats have zero votes to spare. That’s given enormous leverage to Manchin.
Senate talks could take weeks, and the prospect that Manchin or others will force additional cuts in the measure was making it easier for House moderates to back the legislation Thursday. The altered bill would have to return to the House before going to Biden’s desk.
When moderates delayed House passage of the bill two weeks ago, they said they wanted to make sure the CBO’s projections for its costs were similar to White House numbers, which showed the measure essentially paid for itself.
But some moderates said projections about IRS savings are always uncertain and would not cause them to oppose the measure. Others said the measure’s roughly $555 billion in tax credits and other costs to encourage cleaner energy need not be paid for in the bill because global warming is an existential crisis.
CBO estimated that language helping the government curb prescription drug costs would save $297 billion over 10 years. The savings would come from new constraints on pharmaceutical companies’ pricing, but also by blocking a rule on drug company rebates that was initiated by President Donald Trump but never took effect.
The bill also would let the government issue work permits to millions of immigrants that would let them stay in the U.S. temporarily. That seemed likely to be changed or eliminated in the Senate, where rules limit provisions allowed in budget bills.
The nonpartisan Committee for a Responsible Federal Budget, which preaches fiscal constraint, estimated that the bill’s overall cost would be nearly $5 trillion if Democrats hadn’t made some of its programs temporary. For example, tax credits for children and low-earning workers, top party priorities, are extended for just one year, making their price tags appear lower, even though the party would like those programs to be permanent.
AP Congressional Correspondent Lisa Mascaro and reporter Farnoush Amiri contributed to this report.