Our President, Joe Biden, has been suffering from low approval ratings over the last year, mostly for things he has no responsibility for. Like the price of gas. Or inflation. Or that Joe Biden and Kyrsten Sinema adamantly refuse to make any changes in the filibuster.
But this week has finally been a good week for Uncle Joe. First, Chuck Schumer has apparently been engaging in some secret negotiations with Joe Manchin, who apparently got some blowback from his colleagues for being the only one standing in the way of moving forward Biden’s agenda. Then Sinema — whose endgame is often mysterious and unclear — also got on board.
This is all part of a spending bill, and therefore not subject to the filibuster, under the Senate’s obscure rules with respect to budget reconciliation.
Majority Leader Schumer, D-N.Y. called the Senate into a rare Saturday session, so they could get this done before the August recess.
Somewhat shockingly — as in not shocking at all — Republicans are united against the bill. They claim that the spending will make inflation worse, and that the provisions on health care will hamper pharmaceutical innovation.
- Initially, this is a watered-down version of the “Build Back Better Act.” As such, most of the revenue-generating provisions of prior proposals have been eliminated, with the exception of the corporate alternative minimum tax. A new provision closing the carried interest loophole, has been added to the latest proposal.
- It resurrects the Corporate Alternative Minimum Tax which was eliminated by the Tax Cuts and Jobs Act passed in 2017, in a slightly altered form.
- It closes the “carried interest loophole” that has allowed favorable tax treatment to managers of hedge fund and certain other private equity funds.
- It invests in IRS service to close the service’s “tax gap” (which is the difference between what should be collected what is actually collected by the IRS).
- It allows Medicare to negotiate drug prices, and caps out-of-pocket costs at $2,000.
- It also extends certain provisions of the Affordable Care Act having to do with expansion of affordability percentages used in calculating the premium tax credit.
- It provides or extends substantial tax credits having to do with various aspects of green energy, including (1) a credit of .3¢ per kilowatt-hour for energy produced from a zero-emission nuclear power facility; (2) a credit for sustainable aviation fuel sold or used; and (3) a credit for the production of clean hydrogen after 2022.
In other words, it’s complicated.
As these kind of bills always are.
What is not included, most notably, is an extension of the COVID-era expansions of the child tax credit and earned income tax credit. Finally, it also does not include changes to the business interest expense deduction or any of the proposed changes for international taxpayers that were included in the Build Back Better Act the House passed in 2021.
All in all, this is a big Biden win, and should be acknowledged as such.