Senate Talks Reconciliation Bill

December 1, 2021

Following House passage of the Build Back Better reconciliation bill (H.R. 5376) that includes more than $1.5 trillion in business and individual tax increases, the Senate is poised to take-up the bill before the Christmas break. The House-approved bill appears certain to be modified in some form once it crosses the Rotunda, which means an amended bill will need to be sent back to the House for another vote before the legislation can be finalized and sent to the White House for President Biden’s signature.

Because the measure is moving under budget reconciliation protections it can pass in the Senate with a simple majority rather than the 60-vote supermajority typically required for legislation to clear procedural hurdles in that chamber. Despite that advantage, however, Majority Leader Charles Schumer (D-N.Y.), will be under pressure to keep his members united in the face of what is expected to be unified Republican opposition. Democrats control only 50 seats in the Senate and will need all those votes, plus the tie-breaking vote of Vice President Kamala Harris, to secure the bill’s passage, so Schumer likely will have to accommodate members of his caucus who demand changes to various provisions.

The House’s proposed change to the SALT deduction cap, for example, has prompted pushback from Sens. Bernie Sanders (I-Vt.), and Robert Menendez (D-N.J.), who have decried the provision as one that would primarily benefit wealthy taxpayers. Sens. Sanders and Menendez have said they are crafting their own proposal that would be permanent but would apply only to households earning less than about $550,000 a year.

Sen. Joe Manchin (D-W.Va.), meanwhile, has criticized several provisions in the House bill, including one that would provide a higher tax credit for new qualified plug-in electric vehicles if the final assembly is at a facility located in the U.S. that operates under a union-negotiated collective bargaining agreement.

On the nontax side, Manchin has spoken out against a provision in the House bill calling for paid family and medical leave. More generally, he also has expressed concern that the legislation could exacerbate the recent spike in inflation and that some of the temporary provisions obscure the full cost of the package if they are extended by a future Congress.

Schumer has said he hopes his chamber can complete work on the Build Back Better legislation before Christmas. That proposed timetable means the tax-and-spending package will be competing for floor time with two other time-sensitive fiscal priorities: addressing the federal debt limit for the long term and funding government operations for fiscal year 2022.

Click here for more details on the bill.