Skip to main content

TAX TAKE: BBBA Negotiations: Don't Call It a Comeback

Tax Alert

Your friends at Tax Take are back on Build Back Better Act (BBBA) watch since early signs of a potential comeback have been detected from current reconciliation negotiations. According to reports, Senator Joe Manchin (D-WV) and Senate Majority Leader Chuck Schumer (D-NY) are engaged in active discussions on a scaled-back reconciliation package focused on climate change, prescription drug pricing, tax, and potentially enhanced insurance subsidies under the Affordable Care Act (ACA). This is the most momentum BBBA has had all year.

While there is still a long road ahead for BBBA to get across the finish line, here are three reasons why the package still has a chance to pass Congress and its prospects should not be dismissed. 

  • Discussions seem to be heating up. Reports from inside the Capitol are that Senators Manchin and Schumer are discussing line by line the details of a potential deal, and Senator Schumer has begun discussions with the Senate Parliamentarian, the all-important office that ultimately decides what is included in a budget reconciliation bill. There also reports of a key proposal that was in last year's BBBA package that is now out, which was corroborated by a senior Democrat. All this signals that the negotiations are real and Democrats are working toward a consensus package.
  • There is still time. The current reconciliation instructions for this potential BBBA package do not expire until September 30, 2022. And while Democrats would prefer to not be legislating a final package in September, there is still time (in theory) to consider a bill in July and August. Recall that after the July 4th recess, the Senate is scheduled to be in session for at least four weeks before the August recess, and the House of Representatives is scheduled to be in session for three weeks – although Congressional leadership would extend that should they be close to a final deal.
  • Political necessity. As we get closer to the midterm elections in November, both parties are viewing pending legislation through the lens of the impact on their electoral prospects. Democrats are facing challenging political headwinds this fall, but a prominent Democratic pollster is giving Democrats hope that parts of a BBBA package could help them in key Senate battleground states that could determine whether Democrats retain a Senate majority. This political dynamic could be a significant motivator for Democrats to band together and pass a scaled-back BBBA bill. Additionally, since Democrats are predicted to lose the majority in the House in November, this could be their last opportunity to enact a significant piece of legislation before next year.

Although Congress is in recess this week and next, be sure to monitor the active Senate negotiations on BBBA and its newfound momentum. July will be pivotal for the bill's prospects and we expect negotiations to continue to heat up. #TaxTake

Upcoming Speaking Engagements and Events

Loren will speak on the "Transfer Pricing Debate" panel at the 2022 NABE Transfer Pricing Symposium on July 19.

The information contained in this communication is not intended as legal advice or as an opinion on specific facts. This information is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. For more information, please contact one of the senders or your existing Miller & Chevalier lawyer contact. The invitation to contact the firm and its lawyers is not to be construed as a solicitation for legal work. Any new lawyer-client relationship will be confirmed in writing.

This, and related communications, are protected by copyright laws and treaties. You may make a single copy for personal use. You may make copies for others, but not for commercial purposes. If you give a copy to anyone else, it must be in its original, unmodified form, and must include all attributions of authorship, copyright notices, and republication notices. Except as described above, it is unlawful to copy, republish, redistribute, and/or alter this presentation without prior written consent of the copyright holder.