Congressional Update: $3.5 Trillion Budget; Debt Ceiling; EVs; Tax Changes
U.S. House Committees continue to markup their respective portions of the Build Back Better Act, the $3.5 trillion reconciliation package that includes Democratic priorities not included in the Senate-passed infrastructure bill.
Clean Electricity/Electric Vehicles
The House Energy and Commerce (E&C) Committee released details about its planned portion of the bill, which will invest $150 billion in a Clean Electricity Performance Program (CEPP).
The CEPP, which will complement clean energy tax incentives, will issue grants to and collect payments from electricity suppliers based on how much qualified clean electricity each supplier provides to customers.
The E&C bill will also invest $13.5 billion in electric vehicle (EV) charging infrastructure in publicly accessible locations and will support electrification of industrial and medium-heavy duty vehicles.
Also this week, Rep. Don Beyer (D-VA) proposed a new tax credit for electric vans and trucks. Beyer’s bill, which he said will hopefully be considered as part of a larger EV incentive package, would offer a 30 percent tax credit for qualifying commercial vehicles.
The House Ways and Means Committee has not yet released details about the tax provisions of the bill.
House and Senate Democrats continue exploring ways to raise revenue by increasing corporate and capital gains rates, along with changing the taxation of American multinational corporations.
Another plan circulated by the Ways and Means Committee this week would automatically enroll workers for IRAs or 401(k)-type retirement plans.
The draft legislation, which is bipartisan, would direct 6 percent of each employee’s pay into a retirement savings plan, gradually escalating to 10 percent, unless they took action to opt out or change their contribution rate.
The politics of reconciliation remain tricky, with House and Senate Democrats internally divided over tax policy changes and the overall cost of the package.
It was reported last week that Senator Joe Manchin (D-WV) is open to a $1.5 trillion package, though some close to the Senator believe Senator Manchin would go closer to $2 trillion.
The one certainty is that the reconciliation process will not conclude any time soon, and many expected protracted negotiations that will continue into the fall.
As a reminder, House progressives have pledged not to support the Senate-passed infrastructure bill until the Senate passes its reconciliation package.
An additional challenging dynamic is the debt ceiling. Last week, Secretary of the Treasury Janet Yellen said that the Department will exhaust extraordinary measures to continue financing the government if the debt ceiling is not raised in the month of October.
Senate Republicans have pledged not to support a stand-alone debt ceiling increase and have instead urged Congressional Democrats to include a debt-ceiling raise in the reconciliation package.