Why Biden’s Build Back Better Plan Falls Short
Is the reconciliation bill, which can be found here, really a chance for America to Build Back Better, or is it a massive income transfer program to favored Democratic constituency groups? Unfortunately, it appears to be the latter.
Since our inception, The New Center has offered several ambitious policy solutions to reckon with climate change, healthcare, education, and other priorities addressed in the reconciliation bill. But far too much of the bill appears to funnel money to organized groups and constituencies that have lobbied for years for more government largesse. Perhaps that is why 39% of Americans believe the Build Back Better Act will have a negative impact on their lives while only 34% think it will be positive.
The bill does have some good ideas that will benefit a broad spectrum of Americans, but far too much of it just picks winners among favored Democratic groups or funds significant expansions of federal agencies.
The biggest winner is the climate lobby, which routinely donates tens of millions of dollars to Democratic campaigns. The Build Back Better Act hands the climate lobby $555 billion in subsidies in the name of combating climate change and adopting cleaner energy sources. In reality, the reconciliation bill will forcibly green the U.S. consumer, doing more to ensure Elon Musk stays the world’s richest person than actually fight climate change. Under this bill, Americans will drive a more expensive and less practical electric car subsidized by the government. They will continue to live in the same houses with new, government-subsidized power systems. Billions of dollars will go to Environmental Justice Block Grants doled out to the exclusively Democratic constituencies that qualify.
Any serious effort to combat climate change would begin with the recognition that the United States is responsible for just 14% of global CO2 emissions. The single biggest contribution we can make, then, is developing breakthrough energy technologies that are affordable and scalable enough for developing countries like India and China to embrace. Yet the Build Back Better Act is instead full of provisions like this:
- 15003 includes $9 billion for farming programs that reduce greenhouse gas emissions, coupled with roughly $1 billion more to create climate hubs that offer technical assistance for climate change
- 30116 provides $5 billion to the EPA to dole out to localities for carbon emission reduction plans
- 30202 provides another $3 billion in “Climate Justice Block Grants” that go to projects in disadvantaged communities. There are no requirements that the selected projects actually reduce pollution
- 30412 allocates $6 billion in subsidies for homeowners to make their homes more sustainable
- 40009 provides $2 billion for climate-related improvements in rural rental housing
- 30444 sends $5 billion to the Department of Energy’s fund for “low-carbon investments in energy communities”
- 50004 provides $500 million for “sustainability and environmental programs”
- 70201 earmarks $6 billion for coastal climate resilience programs
- 70301/05 spends $181 million to save endangered species
- 71201/71301 curtails domestic oil and gas leases, increasing dependence on foreign oil and raising the price of existing government leases
- 80007 provides the GSA with $975 million for “environmental sustainability programs”
- 80008 gives the GSA another $3.25 billion to buy more expensive, low carbon construction materials
- 110019 allocates $900 million in reimbursements for higher-cost construction materials that meet new climate requirements
- 90016 is an additional $100 million of environmental research that goes only to “minority-serving institutions”
- 110010 spends $500 million for GSA green buildings retrofitting
- 110011/13 includes $1.25 billion for the replacement of facilities damaged by climate change and remediation of climate change at ports
- 26001 provides $7 billion to create new climate justice advocates in service groups like Americorps. These grants are only for projects related to “climate resilience and mitigation”
- 26002 provides another $450 million to nontraditional climate apprenticeship programs
On the positive side of the ledger, The Build Back Better Act does nearly double the budget of the Department of Energy’s Loan Program Office (LPO), a relatively successful project to give clean energy innovators access to capital. The LPO has kept pace with private lenders in terms of loan loss rates while also creating thousands of jobs and spurring technological progress. While it could use some reform to ensure it is funding earlier stage research and technologies—as opposed to picking commercial winners and losers—the LPO has carved out an important role in funding research and innovation that might be too risky or expensive for the private sector alone
Many of the Build Back Better Act’s provisions also function as handouts to unions and labor, sometimes explicitly. And given the reliably Democratic history of American unions, it is not hard to understand why. Between 2019 and 2020, labor unions spent over $80 million on political campaigns, 88% of which went to Democrats.
- 21002 provides $350 million to “rebuild” the National Labor Relations Board
- 21003 provides $321 million to “rebuild” the Equal Employment Opportunity Commission
A key group here is the teachers’ unions. The bill does little to change the failing education system. America’s K-12 students are ranked 38th in math and 24th in science globally, yet the bill mostly funds the hiring of tens of thousands of new potential members of teachers unions as well as raises for the over 125,000 unionized pre-school teachers and childcare workers.
- 23002 provides $18 billion for Universal Preschool, but $7.5 billion of it must be used for pay increases for those already working in Head Start
The bill also provides rewards to higher education. Professors and university administrators, who donated five times as much to President Biden than to former President Trump in their 2020 campaigns, will receive sizable public grants:
- 136601 gives $1 billion a year to higher education institutions (with a larger credit to minority-serving institutions) for creating environmental justice programs
Similarly, when it comes to healthcare, billions go to creating new potential members of the Services Employees International (SEIU,) the largest union of healthcare workers and an almost exclusively (97%) Democratic donor:
- 134101 establishes about $500 million in grants to create new healthcare workers from low-income communities
- 134304 spends $50 million to improve staff-to-patient ratios in hospitals
- 134201 provides $392 million to create additional nurses, with most of the funds going as wage subsidies or government-funded employee benefits
- 31005/8 allocates $850 million for training nurses and creating a new health corps, while doctor training gets just $20 million
The United Auto Workers (UAW), one of the largest unions in North America, also profits from this bill. Despite donating “only” 73% to Democrats in 2020, the UAW spent 99% of its contributions on Democrats in the previous 28 years.
- 136401 provides households making up to $800,000 per year up to $12,500 in tax credits for electric vehicles, but only if those vehicles are brand new and produced by union workers
- 80001/3 allocates $12 billion to the federal government for adding electric vehicles to existing fleets, including $7 billion for Postal Service vehicles
In addition to unions, other reliably Democratic constituencies receive hefty rewards from this bill. From subsidizing electric bikes for well-off urbanites to prioritizing race-based over needs-based funding, the Build Back Better Act is often explicitly political in its choices.
Childcare benefits in the bill are weighted toward single mothers—who vote 8 to 1 Democratic—and against married couples and people who are working.
Then there is Hawaii, which represents only 0.4% of the US population but is the third most Democratic leaning state in America. Hawaii receives more exclusively dedicated funding than the ten most populous states combined.
- 31071 special funding of nearly $275 million to upgrade the healthcare system in one state — Hawaii
- 70101/2 provides $500 million for tribal and Native Hawaii climate “resilience”
- 70301/05 $181 million to save endangered species. And add $5 million to save endangered plants in Hawaii and $5 million to save “desert fish”
- 40401 spends $1.6 billion to develop the Minority Business Development Agency
- 31051 gives $50 million for substance abuse training fellows only in communities of color
- 20006 allocates $200 million to preserve Native American Languages
- 20025 provides $6 billion in scholarships only at pre-selected HBCUs
- 12102 allocates over $1 billion in total to help provide financial assistance to people who have experienced discrimination in farm lending programs, including $10 million for “equity commissions”
- 40001/40002 provides $90 billion for public and affordable housing
- 11003 expends $4 billion to achieve “neighborhood equity” focusing on reconnecting divided communities
- 136103 expands credits for “environmental justice” solar and wind energy projects only located in low-income areas
- 50003 provides $100 million in new grants to non-profit community organizations fighting for greater security
- 136406 provides up to $1,500 for electric bike owners, who earn above-average incomes and 33% of whom make over $100,000 per year
As to more universal benefits, they are propped up by accounting gimmicks. The $400 billion in childcare and pre-school benefits is priced over ten years but expires in six. The increased child-care credit only lasts for one year. The expanded benefits to buy Affordable Care Act healthcare plans run out in 2025. If these provisions are indeed extended over the full ten years, the true cost of the bill is closer to $4 trillion than the stated $1.75 trillion.
Yet despite the massive price tag, some of Americans’ top priorities still receive only minimal attention in the Build Back Better Act. That is especially the case for Covid-19, which has taken 750,000 American lives and counting but is frequently slighted in favor of climate relief.
- 31021/23 provides for $3 billion—or 0.015% of the bill—in funding to prevent the next pandemic
- 31044/31038 dedicates $15 million to a program to monitor pregnancy risks associated with Covid-19, while over five times that amount is spent to address the risks of climate change on pregnant individuals
And even in the provisions that do address climate change, the bill’s priorities are questionable:
- 90013 spends $139 million for hurricane detection planes
Despite doling out billions for electric vehicles and “climate justice grants”, the Build Back Better Act ironically underinvests against one of the most threatening aspects of climate change. Natural disasters are becoming stronger and more common, and investments in hurricane detection could help mitigate catastrophic damage.
The opioid epidemic is also under-represented in this bill. In the 12-month period ending in March 2021, overdose deaths reached an all-time high of roughly 100,000. The actual number is likely higher than that due to inadequate data on the subject, according to the CDC. Yet:
- 70106 provides just $124 million to combat substance abuse in the US
If these top priorities are going unaddressed because the Build Back Better Act is at its maximum spending capacity, then perhaps there are some less practical provisions that funding can be drawn from:
- 30118 spends $100 million just on figuring out how to label construction materials as low carbon products
- 30412 allocates $220 million on just administering homeowner subsidies.
- 31025 provides for $50 million to train more doulas for childbirth, despite the birth rate declining six years in a row for a record low in 2020
- 110012 dedicates $350 million for a new ice-breaking ship, ironic considering the overarching climate goals of this bill
- 70501 provides $65 million to the Council on Environmental Equality to measure only the negative impacts of climate change. If deaths from cold are diminished, they would not be counted as this will not be a holistic study.
In isolation, a member of Congress could make a case for why many of the programs in the reconciliation bill are important. But it is very hard to make the case that these provisions represent any kind of thoughtful or deliberate policymaking. In ways large and small, this bill doles out benefits to Democratic constituencies at the expense of others. Much of the funds have no connection to the accountability metrics that would matter to the American people, such as better performing schools or reductions in the cost or carbon emissions of our energy. Race is often put over need as the selection criteria. Measures to fight Climate change are not paired with others to enhance energy independence, even as gas prices are soaring. Ideology on issues is often mandated and rewarded. As usual, a one-party bill rewards one party’s core interest groups.
Is this actually Building Back Better? You be the judge.