Build Back Better plan can come back better

President Joe Biden’s signature economic legislation isn’t dead. In fact, if Democratic Party leaders could only bring themselves to make a few hard choices, Build Back Better could even get better.
Momentum for the nearly $2 trillion bill has seemingly collapsed, with talks between Senator Joe Manchin and the White House breaking down and Senate Majority Leader Chuck Schumer’s self-imposed Christmas deadline looking impossible. But it’s never a good idea to take congressional deadlines seriously. And Democrats should realise that Manchin’s red lines leave them plenty of room to enact a major piece of legislation that all factions of the party can be proud of.
To see how to fix the bill, though, it’s necessary to understand how the current mess came to pass.
It all starts with the arcana of Senate procedure, in particular the budget reconciliation process. Most bills need 60 votes to pass, due to another bit of Senate arcana, but a budget reconciliation bill needs only 50 — which is exactly the size of the Senate Democratic caucus. (The bill would pass when the vice president breaks the tie.) So any Democrat who wants their legislative proposal to have a chance will try to include it in the reconciliation bill.
That helps explain why Build Back Better has always been a grab bag of progressive ideas rather than a thematically coherent piece of legislation. Democrats basically have one shot to legislate. So they started out with a giant $3.5 trillion bill that doled out goodies to every element of the party’s coalition. They paid for it all with increased taxes on the wealthy, but moderates revolted at some of the revenue proposals, so the whole thing got cut down to $1.75 trillion.
That’s still a lot of money. But Democratic leaders didn’t want to disappoint anyone in their coalition by telling them “no.” So the legislation they passed in the House is full of weird phase-ins and mid-decade expirations in order to limit the total cost.
When this deal reached the Senate, Manchin threw a wrench in the works. He regards these provisions as budget gimmicks, since his House colleagues clearly intend for the programs to be made permanent.
On the facts, Manchin is wrong: It’s unlikely that the expiring programs would be extended. But that only underscores the foolishness of the House’s bonanza of expiring provisions. The $1.75 trillion headline number is a large sum of money — substantially bigger than the 2010 Affordable Care Act — and Democrats ought to be able to accomplish a lot of good with it. To spend $273 billion on a subsidised child-care program that only lasts for a few years, for example, would be a wasted opportunity when the money could be used on a smaller but permanent and durable program.
The problem here is simple to describe, if not solve: Nobody in the party wants to make tough choices and tell some groups that they aren’t going to get what they want.
Since Manchin and Senator Kyrsten Sinema were responsible for cutting the bill’s overall price tag, the White House and congressional leadership would like them to break the bad news to individual members and interest groups about which programs are getting killed. So far they have been unwilling to play that role. The result is a pointless and frustrating exercise for everyone — but it shouldn’t be hard to come up with a good bill here.
Start with child poverty. The Tax Cut and Jobs Act of 2017 increased the child tax credit from $1,000 to $2,000 per year and made some of its benefits available to the lowest income families — but also scheduled these enhancements to expire in 2025. Then this year’s American Rescue Plan boosted the credit (for one year) to $3,600 for children under 6 and $3,000 for kids between 7 and 17. It also made the tax credit fully refundable, so even families with no income could get the full benefit. Progressives want to make this bigger child tax credit permanent, which it should be.

—Bloomberg