Tax Reform 2021 - Build Back Better: Status Update as of December 22, 2021

It appears that the Build Back Better legislation is, at best, being put on hold until after January 1, 2022 after Senator Joe Manchin’s announcement on Sunday that he “cannot vote to continue with this piece of legislation.”  He continued by stating, “(t)his is a no on this piece of legislation. I have tried everything I know to do.”  He cited concerns over inflation, the national debt, and the COVID-19 pandemic for his decision. 

A symbolic vote may be held in January, as Senate majority leader Chuck Schumer promised to put the bill to vote in early 2022, saying every member would have the opportunity to make their position known on the Senate floor.  Schumer also discussed a path forward, stating that Democrats would hold a special caucus meeting and that the Senate would “keep voting on it until we get something done.”  “We simply cannot give up,” he said. “We must and we will keep fighting to deliver for working families.”

It is possible that a smaller version of the bill could still be negotiated.  House Speaker Nancy Pelosi, for example, said that she was hopeful lawmakers could reach an agreement on the Build Back Better Act so that the legislation comprising President Joe Biden’s economic agenda can pass “as soon as possible next year,” according to a letter to colleagues. “First and foremost, our work for the People demands that we stay at the table to pass the Build Back Better Act,” she noted.   She cited the most critical provisions in the measure as being the child tax credit, investments in family care, universal pre-kindergarten, and childcare, expanding home health care, strengthening Affordable Care Act, and climate provisions. 

The White House and Senator Schumer need to determine whether they can salvage some of the tax-and-spending bill to address Senator Manchin’s demands while maintaining the support of the rest of the fractious Democratic caucus.  Several moderates suggested trimming the bill by cutting the number of programs, but such a bill could be a tough sell with individual lawmakers fighting for their own competing priorities to be included.

Senator Manchin, in an interview on Monday, provided an outline that would earn his support for a revived slimmer version of Build Back Better legislation.  Senator Manchin indicated he would support a bill in the $1.7 trillion dollar range.  He indicated that the current proposed legislation was “very far-reaching piece of legislation which changes so many categories in American culture and American society” that would revamp the tax code, energy policy, and the social platforms used to support people.  (Clip of interview can be found here Manchin explains position on Build Back Better in "Talkline" interview - WV MetroNews)

So – paraphrasing Yogi Berra — it may not be over until it’s really over, and it appears that it may not be over.  It seems very unlikely that anything will happen in 2021, but we will continue to follow the action in 2022. 

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at [email protected].

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2023 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

our thoughts on
Automobile, Tax BY Brett Cubellis
Explaining the Transfer/Advance Payment of Clean Energy Credits and Energy Credits Online Registration
New Research and Development Capitalization Requirement Shuffles System
Contractors May Benefit From SALT Cap Workaround
2023 Legislative & Regulatory Update
Tax BY Kirk Mitchell
Can “Moore” Tax be Refunded from IRS? How to Protect Your Potential Claim for Refund of §965 Foreign Corporation Transition Tax
Fraud, Tax BY Charlotte Garraway
5 Red Flags of Fraudulent ERC Providers
Register to receive our weekly newsletter with our most recent columns and insights.
Have a question? Ask us!

We’d love to hear from you. Drop us a note, and we’ll respond to you as quickly as possible.

Ask us
contact us

This site uses cookies to ensure that we give you the best user experience. Cookies assist in navigation, analyzing traffic and in our marketing efforts as described in our Privacy Policy.