House Adopts Biden’s Build Back Better Spending Plan, Here’s How It Can Impact Your Finances
House Democrats on Friday passed the Build Back Better Act, President Joe Biden’s signature spending plan that includes an estimated $ 1.75 trillion in investments to expand child care programs, reduce care costs health, fight climate change and increase affordable housing, among others.
This version of the Build Back Better plan has the potential to directly impact the finances of millions of households with a series of new and expanded tax credits, as well as a new surtax on the richest Americans with income. staff over $ 10 million, according to the White House.
The bill is now heading to the Senate where it faces opposition from Republicans and moderate Democrats, like West Virginia Senator Joe Manchin, who want to limit spending and avoid increasing federal debt. This will likely be a point of contention after the Congressional Budget Office (CBO) found that passing the legislation would add $ 367 billion to the deficit between 2022 and 2031.
Read on to learn more about the financial implications of the Build Back Better spending plan, and visit Credible to compare interest rates on a variety of financial products, from personal loans to student loans.
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What is included in the Build Back Better Act?
The Build Back Better program includes a host of historic investments that will “put the United States on track to meet its climate goals, create millions of well-paying jobs, allow more Americans to join and stay on.” the job market and develop our economy. from the bottom up and from the middle out, “according to the White House.
Here are some major investments included in the bill that can impact your finances:
Learn more about each policy in the sections below.
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Expanded child tax credit
Build Better extends the expanded Child Tax Credit (CTC) under the American Rescue Plan Act until 2022. This brings the current cap of $ 2,000 per child to $ 3,000 per child ages 6 to 17 years and $ 3,600 per child 5 and under.
It also makes the full repayment permanent, meaning low-income families who typically don’t earn enough money to file a tax return will continue to be eligible for the full credit. This will permanently reduce child poverty by up to 40%, according to the Center on Budget and Policy Priorities (CBPP).
In addition to expanding the CLC, Build Back Better caps the cost of child care services for young children at 7% of a family’s income. The bill also establishes a framework for a free universal preschool for more than 6 million American children aged 3 and 4.
Families who are struggling to afford child care and other necessary expenses may consider borrowing a fixed rate loan to cover the costs. You can compare personal loan interest rates for free on Credible.
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Increased Pell Grants and HBCU Funding
Pell scholarships are awarded to undergraduate students who have extreme financial need. Biden’s spending plan will increase the maximum Pell grant amount by $ 550 for more than 5 million students enrolled in public and private non-profit colleges.
Additionally, Build Back Better includes tuition assistance for historically Black college and university (HBCU) students with family incomes below $ 125,000, as well as increased funding to improve research and development programs. development in these schools.
However, one higher education offering was cut from Biden’s economic program: a tuition-free community college. Learn more about how to pay for your education, including private student loans, on Credible.
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Tax incentives for electric vehicles
As part of the bill, the White House called its Build Back Better plan “the biggest climate change effort in American history.” Part of this investment in clean energy comes in the form of tax credits for electric vehicles.
The current reconciliation bill could reduce the cost of electric vehicles made in the United States by up to $ 12,500. It also includes investments in electric vehicle infrastructure that could make charging stations more widely accessible to drivers.
One thing to note, however: EVs can still be more expensive to buy and more expensive to insure than traditional gasoline vehicles. To make sure you get the lowest possible auto insurance rate for your situation, compare quotes from multiple insurers on Credible.
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Affordable Housing Arrangements
Build Back Better would fund the construction, rehabilitation and improvement of more than one million affordable housing units with the aim of boosting housing supply and lowering housing costs for tenants and landlords.
It will also extend housing bonds to hundreds of thousands more families and invest in down payment assistance programs for first generation homebuyers. In total, the framework includes a $ 150 billion investment in affordable housing, according to the National Association of Realtors (NAR).
Prospective buyers and current owners should also consider borrowing a home loan or refinancing their current mortgage before rates inevitably rise. Visit Credible to compare mortgage offers from multiple lenders at once.
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Medicaid and ACA Extensions
While data shows that medical bills are the number one cause of bankruptcy in America, some aspects of Build Back Better target healthcare, including expanded Medicaid programs and expanded tax credits on insurance premiums.
The White House estimates that the current framework will reduce the premiums of more than 9 million Americans by extending the premium tax credit, which is available to eligible people who have purchased health care coverage through Affordable Care Act (ACA).
According to CBPP, Build Back Better would also improve Medicaid by reducing coverage gaps for the Children’s Health Insurance Program (CHIP), adding 12 months of postpartum coverage for pregnant women, and improving the quality of health care services. community housing for the elderly and people with disabilities.
If you are struggling to cope with growing medical debt, consider borrowing a debt consolidation loan to pay off overdue hospital bills at a low fixed interest rate. You can learn more about debt consolidation and see if this option is right for you by contacting a knowledgeable loan officer at Credible.
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