GOP Buoyed by Election Outcome; Democrats View Economic Plan as Difference Maker in 2022
By Pete Evich, AAHP Lobbyist and Vice President at Van Scoyoc Associates
Republicans touted their electoral gains across the country on Tuesday, Nov. 2, believing that voters may be rejecting the policies that Democrats are pursuing in Washington.
However, as Democrats came to terms with the statewide voting results, the party’s lawmakers in Congress shun the GOP’s post-election notions and plan to press ahead with their objective of passing roughly $1.8 trillion in spending on their domestic agenda (Build Back Better Act) and another $1.2 trillion in investments in infrastructure.
In speaking with a Congressional reporter on the day after the election, Sen. Bob Casey (D-PA) promoted family-care-related provisions of the Build Back Better Act — such as tax cuts for parents, cheaper prescription drugs, and subsidies for childcare. He emphasized that these are the types of policies that would put money in voters’ pockets in time for next year’s midterm elections. Casey stated, “Those are the kinds of things which directly impact people’s lives, and as the years go by, they’ll be even more impactful.”
While some of those policies will take years to implement, others could put concrete evidence of Democratic governance in front of voters before they seek another two years of congressional control. An important component in the House’s version of the Build Back Better plan is the inclusion of one month of paid family and medical leave benefits. Their proposal also plans to make the child tax credit permanently refundable, giving families who normally take the standard deduction on their annual tax return a smaller tax bill each year.
In addition, they will also continue the monthly payments of the tax credit that Democrats designed in the American Rescue Plan Act, the $1.9 trillion bill that passed Congress in the spring as part of the Biden administration’s fight against the COVID-19 pandemic and the resulting economic downturn. That bill provided as much as $300 per month, per child as a refundable tax credit. Payments began hitting bank accounts in July and are set to expire in December under current law. The Build Back Better Act would extend that popular provision for one year.
House members have also written a new compromise to temporarily increase the $10,000 cap on the state-and-local-tax deduction for all taxpayers, though Senate negotiators proposed permanently eliminating that existing cap for those making less than $400,000 a year.
Democrats from high-tax states have been clamoring for language eliminating or delaying the cap, instituted as part of Republicans’ 2017 tax-code overhaul. It’s a key issue for vulnerable Democratic members like Rep. Josh Gottheimer (D-NJ), who indicated he was satisfied with the plan that would allow constituents to fully write off their state and local taxes from their federal tax bill for five years.
Senate Finance Chair Ron Wyden (D-OR) has also touted the fact that parts of Democrats’ compromise agreement to reduce drug prices would go into effect next year, including provisions meant to cap pharmaceutical costs at the rate of inflation.
Large swathes of the bill ($550 billion in total) will go toward fighting climate change. While it would take years for the warming planet to see the benefits of any cuts to carbon emissions, consumers seeking cleaner and cheaper forms of energy to power their homes and cars could benefit.
Sen. Tina Smith (D-MN) said the bill’s many tax credits, like those for buying electric appliances or improving home efficiency, could take effect “pretty quickly.” And although she doubted the legislation would speed up automakers’ embrace of electric vehicles, it would drive consumer demand for those types of cars.
Other provisions will take longer to set up, and constituents won’t see the tangible effects until years down the line. Sen. Casey acknowledged that the $150 billion in grants for “transformative” home- and community-based care for elderly and disabled people wouldn’t have an immediate effect, since states would be responsible for setting up programs to administer the federal dollars. “It’s going to take a good while,” Casey said.
Sen. Mark Kelly (D-AZ) expressed his hope for passage of the bipartisan infrastructure bill. Especially important, he said, was the legislation’s water-infrastructure investment to fight the West’s historic drought. “We’re trying to do the right thing for the country,” Kelly said. “Obviously, you can’t build a ton of infrastructure in a year. But this is about our future.”
Whether voters will give Democrats any credit in next year’s congressional elections after they approve trillions of dollars in investments in the nation’s economic and physical infrastructure will remain to be seen.