Tax Update Blog

State of Play on Build Back Better

January 5, 2022 | Blog
By Jay Heflin

Senators have returned to the Capitol from their holiday break without a solid plan for advancing the tax and spending reconciliation bill that the House passed shortly before Thanksgiving.

Originally, Senate Majority Leader Chuck Schumer (D-N.Y.) planned to pass an amended-version of the House-passed bill before Christmas. That plan was torn asunder in December after Senator Joe Manchin (D-W.Va.) said he could not support the package as it is currently written.

Manchin’s statement came as a shock to some because Senate Democratic leaders were in the process of amending the bill to ensure it passage. Manchin was the key hold-out for supporting the legislation, so presumably the bill was likely being rewritten to garner his support. 

Senator Manchin doubled down on his opposition to the legislation when he told reporters on January 4th that he is not speaking with Senate leaders about amending the bill and doesn’t expect those discussions to occur.

“I’m really not going to talk about Build Back Better anymore because I think I’ve been very clear on that,” he told reporters.

Manchin’s position raises serious questions about whether the Senate will ever vote on the legislation, which is President Joe Biden’s primary economic agenda item.  

Best Case Scenario for a Potential Vote:

Quick recap: The tax and spending reconciliation bill (aka: Build Back Better) has protections so it can’t be filibustered. It can also pass the Senate with a majority of support (51 votes) instead of the usual 60 votes.

No Senate Republicans are expected to support the legislation, which means that all 50 Democratic Senators and Vice President Kamala Harris must support it to pass the chamber. Manchin being a “no” vote means the bill will not pass the Senate and it will not become law.  

The following scenario assumes that Manchin’s support is getable and that no other Senate Democrats oppose the bill.

Senate Leader Schumer has repeatedly said that he will hold multiple votes on the tax and spending reconciliation bill until it passes his chamber.  This strongly suggests that Senate Democrats would amend the legislative text between those votes in the hopes of garnering enough support (from Manchin and the other Senate Democrats) to eventually pass it.    

But before that process begins, the Senate is expected to vote on two pieces of legislation, one dealing with voting rights and the other changing the chamber’s filibuster rules. These two issues are expected to occupy the Senate's time through January. At that point, the federal government will be just a few weeks away from running out of money. Congress has until February 18th to approve additional funding or a partial shutdown of the federal government will ensue.

This means that mid-February is likely the earliest that the Senate embarks on passing the tax and spending reconciliation bill. Once this process begins, there are time-consuming procedural hurdles that must be cleared, which could take weeks to accomplish. Under this scenario, a final vote on the legislation in the Senate could occur in late February or early March.

Again, Manchin and all other members within his Caucus must support this bill for it to pass the upper chamber. The House would then have to approve any Senate changes to the bill before it could be signed into law.

Currently, it is wholly unclear when a signing ceremony would occur on this legislation, given all the unknowns associated with this bill. 

Possible Changes to Win Democratic Support:

The Senate was in the process of amending the House-passed tax and spending reconciliation bill before Manchin put the kibosh on voting on the legislation.

Those changes included amending the $80,000 cap on the State and Local Tax Deduction that passed the House to something that makes the tax break unlimited for taxpayers earning less than $400,000 but caps the break at $10,000 for those earning above this amount. It is not clear what the Senate will eventually propose regarding this issue.

Senator Manchin reportedly favors adding to the bill a tax on billionaires. However, the Senator opposed this idea a few months earlier. House Speaker Nancy Pelosi (D-Calif.) opposes this tax, which likely means that it will not be in the bill.

There has also been reporting that provisions in the bill related to climate change could be deleted. This could mean that energy-related tax provisions are on the chomping block.

Overall, the Senate is expected to reduce the number of provisions in the bill and lower its cost. Senate Democratic leaders have yet to publicly release the details of their bill, so it is not clear what changes have occurred to the legislation. The legislative text will likely only be publicly released if the Senate holds a vote on the bill.

Other Potential Roadblocks:

Senators have priorities beyond the tax and spending reconciliation package and those bills could take precedent when it comes to legislation hitting the Senate floor.

One such bill, from Senators Ben Cardin (D-Md.) and Roger Wicker (R-Miss.), is a rescue plan to combat the outbreak of Omicron infections. Their spending plan would provide roughly $70 billion in aid to restaurants, gyms and other venues negatively affected by the latest rash of increased infections.

Legislation reforming the Electoral Count Act, which is the process for certifying presidential elections, could come to the Senate floor.

Lawmakers are also mulling a stand-alone bill extending the enhanced Child Tax Credit that expired in December.

If any legislation gets floor time, that means there will be less time for the Senate to debate and pass the tax and spending reconciliation bill.

Bottom Line:

If the tax and spending reconciliation bill passes Congress, it will become law. Currently, it is expected that the legislation will be smaller than what passed the House. However, it is not clear what provisions will remain in the legislation.

Some prognosticators think that if the Senate fails pass the tax and spending reconciliation bill by April then its chance for becoming law is greatly reduced. During an election year, Spring is when lawmakers start to focus more on their re-election bids and less on the legislative agenda.  


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