President Joe Biden and key Senate Democrats announced on Thursday that the long-delayed reconciliation bill, whose price point had been the subject of considerable debate and controversy in the Senate, had finally been put together.
The new reconciliation bill, cut from $3.5 trillion to $1.75 trillion, contains many Democratic and progressive priorities, including substantial investments in green technology, universal access to pre-K education, childcare subsidies for lower- and middle-class families, federal assistance to renters, Medicare expansion to hearing aids, and senior care. The bill also expands the Biden-era increase to the monthly Child Tax Credit, potentially allowing American parents to receive up to $3,600 per child per year, and provides $2.9 billion in funding for the ongoing costs of health care related to the September 11, 2001 attacks.
One of the most significant selling points of the bill, according to Biden, was that it would not lead to a deficit increase, as the large spending packages under the Trump administration did. Instead, the bills would be paid for by extra taxes on large corporations and the richest Americans—defined as an extra fifteen percent from corporations with $1 billion or more, and an extra five percent from individuals with incomes over $10 million (raised to eight percent for those with incomes over $25 million).
Some concessions were made to cut the bill’s cost, such as the highly sought-after twelve weeks of paid family leave—a standard practice in most developed countries—were dropped. Another tax loophole that the bill failed to close allows individuals to deduct state and local taxes against federal ones, a practice known as the SALT cap.
Even with the concessions, however, Senator Joe Manchin (D-WV), a fiscally conservative Democrat from a deep red state, has continued to voice his uncertainty about the bill, arguing that it had hidden costs that could ultimately end up substantially increasing its cost to taxpayers. Manchin also opposed the bill’s spending on clean energy, arguing that the United States would move away from fossil fuels too quickly.
Critics have noted that West Virginia is one of the largest coal-producing areas in the United States, and the coal industry remains one of Manchin’s largest donors.
Manchin also owns millions of dollars in coal stocks, which some Democrats have argued creates a conflict of interest with regard to the bill.
Trevor Filseth is a current and foreign affairs writer for the National Interest.