House passes Build Back Better Act with universal paid leave
The nearly $ 2,000 billion Build Back Better (BBB) law, passed by the United States House of Representatives on Friday, contains many elements of interest to CPAs, their clients, and their employers.
This article examines the non-tax provisions of the bill, HR 5376. A separate article covers the myriad tax elements of the bill.
The vote to pass the bill was 220-213.
The House’s passage of the BBB law came after months of negotiations between moderate and progressive Democrats in the US House and Senate. House Speaker Nancy Pelosi, D-Calif., Had hoped the House would vote on the bill on November 5, but those plans were scrapped when several moderate Democrats said they would not vote on the bill. until the Congressional Budget Office publishes its official document. estimate of the impact on the US deficit.
The CBO estimates the bill will cost nearly $ 1.7 trillion and add $ 367 billion to the federal deficit over 10 years. Adding $ 207 billion in unrecorded revenue that is expected to result from increased tax application in the bill, the total net increase in the deficit would be $ 160 billion.
The bill now goes to the US Senate, where it is expected to undergo a few weeks of evaluation to determine whether all of the bill’s provisions can be passed through the budget reconciliation process. Reconciliation allows some budget related bills to pass by only 51 votes and avoid being stopped by an obstruction, which requires 60 votes to complete.
The 100 Senate seats are split 50-50 between Democrats and Republicans, with Speaker of the House Vice President Kamala Harris representing the deciding vote. Republicans have been united against the BBB law, leaving Democrats with the chore of crafting legislation that is consistent with the rules of reconciliation and acceptable to all 50 of their senators. The legislation is unlikely to escape the Senate chambers in its current form, Senator Joe Manchin, DW.Va., telling CNN on Thursday that he had not yet decided whether to support the bill.
IMPORTANT BUSINESS IN HR 5376
Universal paid leave
In one of its most important and controversial provisions, the BBB Act would for the first time offer all American workers paid leave. Concretely, the bill guarantees four weeks of paid leave to all workers:
- New parents;
- Coping with their own serious medical conditions; Where
- Need time off to care for a loved one with a serious medical problem.
Benefits would be paid to workers in one of three ways:
- Via a public program managed by the Social Security Administration that would cover all workers in the public and private sectors, regardless of the size of the employer, including part-time workers and the self-employed.
- Via an “old state” paid vacation program already in force which offers benefits equivalent to or greater than the federal benefit, and for which the state would be reimbursed at the level of what it would have cost to cover its workers in the federal program .
- Via a plan (self-insured or via an insurer) of an employer who has voluntarily chosen to offer 100% of employees paid leave equal to or greater than the public benefit in all respects. The leave policy must include reinstatement protection in employment even if a worker is not covered by the law on family and medical leave. Employers whose plans meet these conditions would be reimbursed the lesser of 90% of the national average cost of paid leave benefits or 90% of their insurance premium.
Investments in small businesses
The BBB Act provides funding of around $ 5 billion to support small businesses.
Most of this money, $ 3.385 billion, is intended to improve the ability of small employers and entrepreneurs to access capital. Concretely, the bill allocates:
- Almost $ 2 billion in total funding over 10 years to fund direct loans to smaller businesses and government entrepreneurs under Loan Program 7 (a) administered by the US Small Business Administration (SBA) .
- $ 950 million in immediate and direct fee relief for new borrowers on SBA 7 (a) and 504 loans. Funding will be available until September 30, 2026 to reduce or waive fees for $ 2 million loans or less.
- $ 60 million to diversify and build equity within the Small Business Investment Company (SBIC) program.
- $ 275.9 million to strengthen and improve the Community Advantage program and also provide the SBA with the power to partner with nonprofit lenders to provide capital under the 7 (a) loan program.
- $ 100 million to establish a pilot program to provide capital to co-ops.
Other investments related to small businesses include:
- $ 1 billion over 10 years to establish a national network of “improvement incubators” to help new businesses and small government entrepreneurs, with the goal of stimulating economic development in under-represented communities.
- $ 200 million over 10 years to provide cash grants of at least $ 100,000 to growth accelerators to expand their capabilities and help small, tech-driven businesses.
Other business-related provisions
The BBB Act invests about $ 390 billion to fund universal preschool programs for all 3- and 4-year-olds and to improve access to affordable child care. Democrats say child care costs are too high for many families, forcing millions of Americans out of the workforce and contributing to the labor shortage that has hit millions of employers . The BBB law would ensure that almost all families of four earning up to $ 300,000 would pay no more than 7% of their income for child care. Additionally, the law would provide funding to child care providers to increase the wages of their workers and add staff to serve more families.
Other allowances related to cases scattered throughout the 2,100-page bill include:
- $ 5 billion for the Department of Commerce to identify and monitor critical vulnerabilities in the manufacturing supply chain.
- $ 1 billion in grants to help minority-owned businesses start and grow their businesses. The bill provides an additional $ 400 million to expand the Minority Business Development Agency and $ 200 million to establish rural business centers that primarily serve rural minority-owned businesses.
- $ 500 million for the Federal Trade Commission to create and operate a new office dedicated to stopping unfair and deceptive acts and practices related to privacy breaches, data security incidents, theft of identity and other data abuse.
– Jeff drew ([email protected]) is a JofA editor-in-chief.