As lawmakers frantically try to reach an agreement before the end of the year on the $1.7 trillion Build Back Better Act, the chairman of the Senate Finance Committee released a nearly 1,200-page Senate amendment to the House-passed version Dec. 11.
According to Senate Finance Committee Chairman Ron Wyden (D-OR), the updated text includes both technical and policy changes, as well as modifications to ensure compliance with Senate budget rules.
The retirement plan provisions—such as the limits on “mega” Roths and in-plan Roth conversions—appear to track with the changes that were included in the version (H.R. 5376) approved by the House of Representatives on Nov. 19. They also still include the same effective dates, meaning the policymakers are still attempting to approve the legislation by year-end. A Dec. 10 post by Brian Graff, CEO of the ARA and Executive Director of NAPA, noted that final action on the legislation may be pushed back to 2022 and that several of the effective dates for the various retirement policy changes could be pushed back as well.
One area in which this version differs from Wyden’s proposal is a fix to a corporate alternative minimum tax provision to address concerns that defined benefit pension plan asset gains would be subject to the tax and deductions would be denied for sponsor contributions to pension plans. Like the House bill, however, Wyden’s draft still includes the underlying 15% minimum tax on certain large corporations with income in excess of $1 billion.
Work in Progress
Wyden’s proposed amendment and the underlying legislation are still very much works in progress and are likely to change in the coming days. Part of the impetus for him releasing the proposal was so the Senate’s parliamentarian could begin reviewing the draft to make sure that it complies with the arcane budget reconciliation rules that allow the Senate to approve legislation by a simple majority instead of a 60-vote threshold.
“The Finance Committee has made targeted improvements to the Build Back Better Act, and is ready to move forward in this process,” Wyden said in a statement. “The package is fully paid for by ensuring profitable mega-corporations and wealthiest Americans pay their fair share. While conversations are continuing, the committee is prepared for bipartisan meetings with the Senate parliamentarian next week.”
Senate Majority Leader Charles Schumer (D-NY) continues to maintain that he wants the legislation approved before the Christmas holiday. But time is running short and apparently there are several ongoing policy differences among House and Senate Democrats, including whether to lift the current $10,000 cap on deducting state and local taxes (SALT). Wyden’s draft currently does not include such a provision, but several House Democrats say they will not support the final legislation unless the SALT cap on itemized deductions is lifted. In addition, after approving the debt ceiling increase early Dec. 15, the House has now recessed until next year.
Fully Paid For?
Meanwhile, Sen. Joe Manchin (D-WV) (whose vote will be needed to pass the bill) and others continue to express concern over the scope and cost of the Build Back Better Act. Two recent Congressional Budget Office analyses have supported their concerns, contradicting the claim made by Wyden and President Biden that the bill is fully paid for:
- a Nov. 18 estimate that as currently written, it would increase the deficit by $367 billion over the 2022–2031 period; and
- a Dec. 10 analysis requested by Senate Republicans showing that it would increase the deficit by $3 trillion over the 2022–2031 period if the provisions in the legislation that are scheduled to be phased out are subsequently made permanent.
