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