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.