President Biden’s American Families Plan; Addresses Child Care, Paid Leave, Nutrition, Education; Makes Permanent ACA Premium Tax Credit Increase; No Drug Pricing
In advance of President Joe Biden’s address to a Joint Session of Congress this evening, the White House unveiled the American Families Plan, the “human infrastructure” component of the Administration’s broader infrastructure plan (fact sheet). The roughly $1.8 trillion proposal calls for investments in child care, paid leave, nutrition, and education as well as various tax reforms. The American Families Plan is intended to complement the approximately $2 trillion American Jobs Plan focused on traditional infrastructure and workforce development (fact sheet).
Health Care and Prescription Drug Pricing
Regarding health care, Biden proposes a $200 billion investment to make permanent the temporary increase in ACA premium tax credits for 2021 and 2022 that were included in the American Rescue Plan Act (ARP) (P.L. 117-2). The American Families Plan does not include other health care proposals, despite pressure from congressional Democrats to prioritize health care. On Sunday, Sen. Bernie Sanders (I-VT) and 16 Senate Democrats sent a letter to Biden urging him to include structural reforms to Medicare in his plan – lowering the eligibility age of Medicare and allowing drug price negotiation, among other proposals.
Notably, in the fact sheet on the American Families Plan, the White House states that “President Biden has a plan to build on the Affordable Care Act and lower prescription drug costs for everyone” through various reforms described at a high-level. In the table below, we pair those reforms with related legislative solutions formally introduced by Democrats in the 117th Congress. As demonstrated by Democrats’ comments and legislation, they are eager to address health care reform ahead of the midterm elections in November 2022.
Timing and Next Steps
We expect lawmakers will continue to draft the multi-trillion-dollar infrastructure package over the next few months, transforming Biden’s American Jobs Plan and American Families Plan into legislative language. Since many components of Biden’s plans mirror proposals introduced by Democrats, they will likely use these bills as a starting point for their legislation.
The White House will likely continue to push for a bipartisan deal on infrastructure. To gain Republican support, however, such a modified approach would likely represent a dramatic departure from Biden’s proposals to such a degree that he would risk losing the support of congressional Democrats.
Additionally, we foresee House Democrats forging ahead with including substantive health care reforms in their infrastructure package, despite Biden leaving them out. “Lowering health costs and prescription drug prices will be a top priority for House Democrats to be included in the American Families Plan,” said Pelosi at the reintroduction of H.R. 3. In addition, House Energy & Commerce Committee Chair Frank Pallone (D-NJ) asserted he would include drug pricing legislation in the forthcoming infrastructure package regardless of whether the White House includes these measures in its initial proposal. This approach further signals congressional Democrats’ intention to use budget reconciliation to advance their broad policy priorities beyond traditional infrastructure.
If budget reconciliation is pursued, congressional Democrats will either have to amend the FY 2021 budget resolution (an unprecedented move authorized by the Senate parliamentarian) or adopt an FY 2022 resolution, either of which would provide reconciliation instructions to individual committees (i.e., report date, dollar amount of budgetary change).
In terms of sequencing, we could see congressional Democrats follow the process used for ARP. House Democrats could advance the American Jobs Plan and American Families Plan in a single package or separate packages. The packages may include provisions that the Senate may remove or revise due to budget reconciliation. Some of the House-approved provisions may not comply with the requirements of budget reconciliation. The Byrd Rule prohibits the inclusion of “extraneous matters” in budget reconciliation, such as those that do not have a substantial impact on federal spending. In addition, Senate Democrats may modify the legislation to ensure passage (e.g., compromises with potential holdouts like Sens. Joe Manchin (D-WV) and Kyrsten Sinema (D-AZ)).
Based on Democratic leaders’ statements thus far, we foresee the following tentative timeline under which they will pursue their infrastructure goals:
- May – Lawmakers will continue to draft legislation and may hold hearings on various aspects of Biden’s plans. House Transportation and Infrastructure Committee Chair Peter DeFazio (D-OR) said he expects his committee will complete its markup of the American Jobs Plan legislation in May, possibly the week of May 24 when the House is scheduled to conduct committee work and before the one-week Memorial Day recess scheduled for May (May 31-June 4).
- July-August – Speaker Pelosi intends to pass the American Jobs Plan by July 4 but signaled floor action in the House on both the American Jobs Plan and American Families Plan could slip to after that and potentially conclude closer to the August Recess.
- August-September – As noted, Congress is scheduled to adjourn in early August, but the infrastructure work could delay or cut short the recess. The Senate will likely vote on the two infrastructure packages in late summer/early fall. Any amendments to the expected House-passed packages would have to be approved in the House.