An Update for My Constituents on Negotiations on the Build Back Better Act

With negotiations continuing to reach agreement on a reconciliation bill, I wanted to take the opportunity to update you on the state of those conversations, where I have seen progress, and what I am pushing to address as negotiations proceed.

Last Thursday, House Democratic leaders released updated text of the draft Build Back Better Act legislation. To be clear, this legislation does not reflect a final agreement between congressional Democrats and the White House, but instead is something of a placeholder as negotiations continue. Even so, I think it’s important to share with you my reflections on the direction this legislation has taken relative to prior concerns I have shared with you and give you a sense of how I am continuing to push for the legislation to improve.

Previously, I raised concerns that the legislation as drafted did not sufficiently target working- and middle-class families and made use of too many budget gimmicks to make the numbers work. While this new draft makes some positive steps towards addressing those concerns, there are still many areas that remain unaddressed. Below I outline those positive developments and outline some additional areas of concern or potential for improvement that I am working with the White House to address.

Positive Improvements

One area where I previously called out the bill for not targeting working- and middle-class families was the bill’s child care proposal. Initially, this section was written by the House Education and Labor Committee Chairman Bobby Scott to have a household eligibility cap at 200 percent of state median income, but that cap was completely eliminated by an amendment in the bill’s committee markup. So as passed out of committee, the proposal had no income cap at all.

After I raised these concerns, the updated bill text released by House leadership Thursday included a household eligibility cap at 250 percent of state median income. This is progress, but I am still pushing for a return to Chairman Scott’s original 200 percent cap. In Maine, 200 percent of the median income for a four-person household is approximately $180,336, while 250 percent is $225,420. The difference is significant when you look at it across all 50 states.

The bill’s elimination of substantial and regressive tax increases on tobacco products is a good move. While I support the successful public health efforts in Maine and across the country to reduce tobacco use, I do not think that proposed tax increases that fall disproportionately on lower-income people are fair. While the rest of the bill’s tax proposals rightly seek greater shares of revenue from wealthy individuals, this proposal would result in lower-income people paying the highest percentage of their income towards these taxes of any income group. So I am glad that this proposal was removed from last Thursday’s version of the bill.

Generally, last Thursday’s bill text is a step towards the correct approach of doing a narrower set of priorities well. I still believe the bill should become even more focused, rather than depending on a future Congress and future president to act to extend the many temporary programs in the current proposal.

Ongoing Areas of Concern

One of the best parts of the proposal is the expanded Child Tax Credit. Unfortunately, the version of the credit in last Thursday’s bill continues to miss the mark. Extending the current version of the credit has the potential to cut child poverty by 40 percent, helping to keep millions of children housed and fed. So while I am glad that the bill text continues to include permanent full refundability for the credit, it cuts the extension of the increased maximum benefit to only one year. If we are serious about making this provision last, we should reform the credit to focus on working- and middle-class families and use the resulting savings to extend the benefit improvements further into the future. It remains unacceptable to spend billions on families earning as much as $400,000 when those funds could be repurposed to give certainty to children that most need the help.

Unfortunately, Congress is poised to make one of the worst possible additions to this bill: eliminating the $10,000 cap on the state and local tax (SALT) deduction. Ending the SALT cap would be a senseless waste of hundreds of billions of dollars on rich people, with 98 percent of the benefit going to those in the top 20 percent of the income distribution. The astonishing scale of this reverse-Robinhood provision could flip the overall impact of the Build Back Better Act into a tax cut for the top 1 percent. This goes entirely against the spirit and purpose of this legislation and should be left out of any final bill. In claiming that this proposal is intended to give tax relief to the middle class, proponents of this provision are glossing over the extreme windfall that would go to households making millions of dollars. If our goal is to target SALT cap relief to the middle class, there are more tailored changes available aside from fully repealing the cap.

I shared the frustration of many Maine people at the complete lack of prescription drug pricing reforms in last Thursday’s version of the bill. As I have stated many times, this issue is both exceedingly important to Maine seniors and people with chronic health conditions as well as something that is an obvious choice for inclusion in this legislation. Thankfully, negotiators are making progress towards adding some version of these reforms back in. I look forward to reviewing the text of this deal to better understand if the proposal is sufficient to meaningfully lower prescription medication costs for seniors.

Areas of Opportunity for Maine’s Second District

Our state’s coastal communities and the commercial fishing industry that supports thousands of jobs have felt the impacts of climate change more acutely than ever before. The Gulf of Maine has been warming faster than ninety-nine percent of the world’s oceans, causing dramatic shifts in fish stock distribution and marine mammal migration patterns. For North Atlantic right whales, this has forced them to travel further north into Canadian waters where their interaction with fishing gear and large shipping vessels has dramatically increased. It is no surprise then that more than a dozen right whale deaths since 2017 have been attributed to Canada. Despite this reality, Maine lobstermen will soon be forced to adhere to new gear modifications and a seasonal closure off the coast of Maine as required by a new federal rule to protect the remaining right whale population. Compliance with these new regulations could cost Maine’s lobster industry hundreds of millions of dollars over the next ten years. Absent more stringent regulations in Canada, the right whale population will continue to be at risk of further decline and the misguided regulatory pressure on Maine lobstermen will continue to grow. There is a widespread fear in the coastal communities I represent that the fishery may not be operationally sustainable within a decade without significant regulatory or economic relief. The Build Back Better Act is an opportunity to provide federal resources to help our lobster fishery pay for these new regulations and bring a degree of economic relief to Maine’s fishing communities. I am advocating for some action on this front.

I am also concerned that as a state whose economy and communities are highly dependent on wood and wood-derived fuels, the current proposal does not provide businesses with an investment tax credit if they install biomass thermal systems. The advanced use of wood as an energy fuel can and should play a significant role in helping decarbonize our economy. Expanding the use of biomass thermal energy can help mitigate the emission of greenhouse gases, reduce dependency on imported energy, and increase demand for domestic fuel, creating jobs and promoting further economic development. Congress recognized these benefits when it created a residential biomass thermal system installation tax credit at the end of last year, and extended this benefit in the draft bill. As the details of the tax provisions continue to be negotiated, I am pushing to expand these benefits to the commercial sector.

The Build Back Better climate and energy proposals omit key opportunities to reduce carbon emissions and invest in the future of Maine’s forest economy. Using harvested timber for energy can reduce fossil fuel dependency and wood products such as cross-laminated timber or wood fiber insulation are known to sequester carbon. Indeed, Europe has been using wood fiber insulation solutions for more than two decades. North America has yet to broadly adopt this energy efficiency technology, which could help to reduce the consumption of oil and gas with an environmentally friendly product; however, there are new manufacturers that are beginning production here in the United States. Expanding the 25C tax credit to include households or commercial buildings that install wood fiber or other demonstrably carbon sequestering insulation made in America would encourage the adoption of this proven environmentally-friendly technology across the country.

Mainers know that our paper mills, saw mills, and biomass facilities are key to the survival of the forest products industry and many thousands of jobs in our state and throughout rural America. While I am glad to see that the draft bill creates a new Department of Energy grant program to provide funding to manufacturing facilities — including paper and pulp — that install carbon emissions and pollution-reduction upgrades, I believe this program could be made stronger and more beneficial to Maine’s economy by creating a specific set-aside of $1 billion within the program for all forest products manufacturers. Doing so would help to address climate change while protecting important jobs for our state’s rural economy.

In broad legislation like this, there will inevitably be drafting errors that risk unintentional problems if not caught prior to enactment. One of these errors surfaced in the bill’s extension of the section 25C residential energy efficiency tax credit. While efficient oil-fueled home heating boilers and furnaces are currently eligible for the credit, the first version of the bill would have accidentally made them ineligible by tying them to the wrong efficiency standard. Given that so many homes in Maine use oil-based heating systems and that Maine is well-positioned to produce wood-based biofuels, I have been working with other members of the New England congressional delegation to fix this provision and make sure that Maine homeowners will be able to qualify for the credit when they upgrade their heating systems’ efficiency with biofuel-compatible systems. I will continue this work as the final bill develops.

The Path Ahead

Importantly, while getting the specifics of the legislative text right is a significant part of the challenge before us, it is not the only one. How Congress takes up and considers this language on the floors of its respective chambers will determine the degree to which lawmakers have the information and time to fully review and analyze specific provisions and understand the bill’s impact on our constituents, the federal budget, and the broader economy. A reasonable process will also help us avoid mistakes and errors in the legislative text that could be difficult to fix further down the road.

To that end, I believe that the House must proceed responsibly and not take up the final text of the Build Back Better Act until three conditions are met. First, we must have the official scoring information from the nonpartisan Congressional Budget Office (CBO) to be able to review the bill’s impact on spending and revenues and determine if it meets its reconciliation targets and is fully paid for. This information is a precondition for the Senate to take up the bill in the first place, so there is no reason to advance the legislation without it. Second, and to the extent possible, congressional leaders should vet relevant provisions with the Senate Parliamentarian to ensure that any bill passed by the House complies with the Senate’s complex reconciliation rules. Finally, lawmakers and the public should be afforded at least 72 hours from when the final bill text is released to review and vet the legislation. Anything less amounts to an implicit admission that party leaders do not want members to be able to fully analyze the bill before having to take a vote.

Thank you for taking the time to read my thoughts. I am glad to keep you apprised as this process continues to move forward, and I welcome your input.

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Congressman Jared Golden

Jared Golden represents Maine’s 2nd District in the U.S. Congress. He serves on the House Small Business Committee and the House Armed Services Committee.