The nearly $2 trillion Build Back Better (BBB) Act, passed Friday by the U.S. House of Representatives, contains many items of interest to CPAs, their clients, and their employers.
This article examines nontax provisions in the bill, H.R. 5376. A separate article covers the myriad tax-related items in the bill.
The vote passing the bill was 220-213.
The House's passage of the BBB Act came after months of negotiations between moderate and progressive Democrats in the House and the U.S. Senate. House Speaker Nancy Pelosi, D-Calif., had hoped to have the House vote on the bill on Nov. 5, but those plans were scrapped when several moderate Democrats said they would not vote on the bill until the Congressional Budget Office released its official estimate of the impact on the U.S. deficit.
The CBO estimates the bill will cost almost $1.7 trillion and add $367 billion to the federal deficit over 10 years. Adding in $207 billion of nonscored revenue that is estimated to result from increased tax enforcement in the bill, the net total increase to the deficit would be $160 billion.
The bill now goes to the U.S. Senate, where it is expected to undergo a couple of weeks of assessment to determine if all provisions of the bill qualify to be passed through the budget reconciliation process. Reconciliation allows certain budget-related bills to be passed by as few as 51 votes and avoid being stopped by a filibuster, which requires 60 votes to end.
The 100 Senate seats are split 50-50 between Democrats and Republicans, with the chamber's president, Vice President Kamala Harris, representing the tie-breaking vote. Republicans have been unified against the BBB Act, leaving Democrats with the chore of crafting legislation that adheres to reconciliation rules and is palatable to all 50 of their senators. The legislation looks unlikely to escape the Senate chambers in its current form, with Sen. Joe Manchin, D-W.Va., telling CNN on Thursday that he has not yet decided whether to support the bill.
BUSINESS ITEMS OF NOTE IN H.R 5376
Universal paid leave
In one of its most significant and contentious provisions, the BBB Act would provide all U.S. workers with paid leave for the first time. Specifically, the bill guarantees four weeks of paid leave to all workers who are:
- New parents;
- Dealing with their own serious medical conditions; or
- In need of leave to care for a loved one with a serious medical issue.
The benefits would be provided to workers in one of three ways:
- Via a public program run by the Social Security Administration that would cover all public- and private-sector workers without regard to employer size, including part-time and self-employed individuals.
- Via an already-enacted "legacy state" paid leave program that provides benefits equivalent to, or better than, the federal benefit, and for which the state would be reimbursed up to what it would have cost to cover their workers in the federal program.
- Via a plan (self-insured or via an insurer) from an employer that voluntarily chose to offer 100% of employees paid leave equal to or better than the public benefit in every respect. The leave policy must include job reinstatement protection even if a worker is not covered by the Family and Medical Leave Act. Employers whose plans meet these conditions would be reimbursed for the lesser of 90% of the national average cost of paid leave benefits or 90% of their insurance premium.
Small business investments
The BBB Act includes around $5 billion in funding to support small businesses.
Most of that money, $3.385 billion, is designated to improve the ability of small employers and entrepreneurs to access capital. Specifically, the bill allocates:
- Almost $2 billion in total funding over a 10-year period to fund direct loans for the smallest businesses and government contractors under the 7(a) lending program administered by the U.S. Small Business Administration (SBA).
- $950 million in immediate, direct fee relief for new borrowers of the SBA 7(a) and 504 loans. The funding will be available until Sept. 30, 2026, to reduce or waive fees for loans of $2 million or less.
- $60 million to diversify and create equity within the Small Business Investment Company (SBIC) program.
- $275.9 million to enhance and improve the Community Advantage program and also provide the SBA with authority to partner with not-for-profit lenders to deliver capital through the 7(a) loan program.
- $100 million to establish a pilot program for providing capital for cooperatives.
Other small business-related investments include:
- $1 billion over a 10-year period to establish a national network of "uplift incubators" to assist new businesses and small government contractors, with the goal of sparking economic development in underrepresented communities.
- $200 million over 10 years to provide cash grants of at least $100,000 to growth accelerators to expand their capabilities to assists small businesses focused on technology.
Other business-related provisions
The BBB Act invests about $390 billion to fund universal pre-kindergarten programs for all 3- and 4-year-olds and to improve access to affordable child care. Democrats assert that child care costs are too expensive for many families, forcing millions of Americans out of the workforce and contributing to the labor shortage that has affected millions of employers. The BBB Act would ensure that nearly all families of four earning up to $300,000 would pay no more than 7% of their income on child care. In addition, the act would provide funding for child care providers to raise wages for their workers and add staff to serve more families.
Other business-related allocations scattered through 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 launch and expand their operations. The bill provides another $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 bureau dedicated to stopping unfair and deceptive acts and practices related to privacy violations, data security incidents, identity theft, and other data abuses.
— Jeff Drew (Jeff.Drew@aicpa-cima.com) is a JofA senior editor.