Congressional Update: House Works On Burdensome Biden Budget Package

Last week, all U.S. House Committees of jurisdiction advanced their portions of the Build Back Better Act– the Democratic-led budget reconciliation package.

The House Ways and Means Committee approved a host of significant tax increases to pay for the package, which as of now would cost in excess of $3 trillion.

The burdensome legislation takes direct aim at EMA members by doubling the excise tax on tobacco and nicotine products and expands the current subsidization of electric vehicles (EVs).

Additionally, the partisan Democratic legislation would raise the top personal income tax rate to 39.6 percent from 37 percent; increase the capital gains rate to 25 percent from 20 percent (well below President Biden’s request of a capital gains increase to 39.6 percent); rolls back President Trump’s corporate-tax rate – bringing the top rate to 26.5 percent from 21 percent; reduces the threshold of eligibility for estate taxes to $12 million for married filers, down from the current $24 million; and phases out Section 199A deduction.

Separate from tax, the House Transportation and Infrastructure Committee approved additional investments in transit, high-speed rail, reduction in carbon pollution in the surface transportation sector, projects to develop low-emission technologies and sustainable aviation fuels, and funding for local surface transportation projects.

The next steps for reconciliation remain uncertain as Senators Joe Manchin (D-WV) and Kyrsten Sinema (D-AZ) continue expressing reservations about the policies and price tag of the House’s package.

To avoid making vulnerable members vote for more than one package, Speaker Nancy Pelosi (D-CA) may wait to hold a final vote on the House-version of the bill until determining what can pass in the Senate.

As a reminder, Democratic margins in the House and Senate are extremely narrow.

Progressive House Democrats have promised to withhold their vote from the Senate-passed bipartisan infrastructure package until the Senate passes a reconciliation package.

The reconciliation process is far from over as it will face significant hurdles in the Senate where moderate Democrats will push back on social policies and the overall price tag.

Click Here to act now – EMA needs you to contact your Congressional members and urge them to oppose the House reconciliation package.

Opposition To Tobacco FET Increase

Last week, EMA joined NACS, NATSO and SIGMA in expressing opposition to the substantial increase in the federal excise tax on tobacco and nicotine products that has since been included in the House Ways and Means Committee mark-up language that is part of the reconciliation package. Click Here to read the letter.

            Opposition To Heat Pump Incentives

Last week, 14 groups including the American Council for an Energy-Efficient Economy, Earthjustice, Rewiring America and League of Conservation Voters, sent a letter to Democratic Congressional leadership insisting that the HOPE for HOMES Act and the Zero Emissions Homes Act be included in the final reconciliation package.

The two bills focus on improving home energy efficiency by replacing or retrofitting appliances. Click Here to read the letter.

Earlier this year, EMA and its state heating fuel associations expressed their concerns to Senator Martin Heinrich (D-NM) regarding the Zero-Emissions Homes Act of 2021, a bill which would incentivize the purchase of new energy efficient heating appliances through federal rebates and tax credits.

Unfortunately, the tax credits are limited to purchasers of new heating appliances powered by electricity while not recognizing clean renewable biodiesel used for heating which can achieve far greater reductions in greenhouse gas emissions than any alternatively powered heating appliance on the market today, including heat pumps.

EMA opposes both bills.  Click Here to read the letter.

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