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BUILD BACK BETTER: How does the bill affect North Carolina?

Washington DC Bureau

(WGHP) — The House on Friday morning passed almost exclusively along party lines the $2 trillion Build Back Better Bill pushed by President Joe Biden.

The bill provides funds for a variety of initiatives related to education, child care, medical coverage for seniors and climate change incentives.

It also raises taxes on corporations and the wealthiest Americans as a way to pay for the bill, which Democrats say should be fully funded. The Congressional Budget Office finds it could add $367 billion to the deficit over the next decade.

All of North Carolina’s members of Congress voted with their parties. Most Republicans who opposed the bill cite its increasing the deficit and overall expansion of government.

Here are the key elements of the bill and how they might affect North Carolinians.

CHILD EDUCATION AND CARE ISSUES

There is $400 billion for child care and preschool through programs funded for 6 years, including universal preschool for all 3- and 4-year-olds. The plan also limits child care costs to no more than 7% of income for families with children younger than 6 and making less than $300,000. Parents must adhere to work requirements to qualify.

NC EFFECT: Ednc.org reports that North Carolina was ranked No. 26 in preschool access nationally in a report by the National Institute for Early Education Research at Rutgers University. The report said NC Pre-K, the state’s program for at-risk 4-year-olds, enrolled 25% of 4-year-olds in the 2019-20 school year and no 3-year-olds, and the program has reached about half of eligible children since 2008. The North Carolina Justice Center reports that the average North Carolina family spends 25% of its income on child care, and almost all families would qualify under the income cap.

The child tax credit that was expanded in the COVID-19 relief act would be continued through 2022. This calls for families to receive $3,600 per child under age 6 and $3,000 per child ages 6 to 18. Most families receive monthly payments of either $250 or $300 per child. This is available to individuals making up to $75,000 or married couples making up to $150,000.

NC EFFECT: Ednc.org reported earlier this year that 92% of children under 18 years old — about 2.09 million children statewide — could benefit from the expansion and that an estimated 137,000 children younger than 18 across the state could be lifted above the poverty line.

HEALTH CARE AND SENIOR CARE ISSUES

Medicare would be expanded to cover hearing services.

NC EFFECT: Hearinglink.org says hearing loss increases sharply with age – nearly 42% of those 50 and older have hearing loss, increasing to about 71% for those 70 and older. NCDHHS operates regional centers for the deaf and hard of hearing, one of those in Greensboro. Cost of hearing aids range from just less than $1,000 to more than $6,000, healthyhearing.com reports. As of 2018 – the latest available figures – there were 1.9 million residents of North Carolina on Medicare.

An annual $2,000 cap on how much seniors in Medicare’s prescription drug program pay out of pocket for their drugs. There is a cap of $35 per month on the price of insulin.

NC EFFECT: Kaiser Family Foundation says that more than 1 million pay more than the $2,000.

Four weeks of paid family and medical leave.

NC EFFECT: A bill in the North Carolina Senate (SB 564) introduced earlier this year would assure workers of 12 weeks of paid time off for significant life events. That bill has been referred to committee. Otherwise, North Carolinians are covered by the federal Family Medical Leave Act (FMLA) or the Pregnancy Discrimination Act.

The plan would lower premiums by an average of $600 per person for more than 9 million Americans who purchase insurance through the Affordable Care Act’s marketplace and provide coverage for up to 4 million Americans who are currently uninsured because of a lack of Medicaid expansion.

NC EFFECT: The Kaiser Family Foundation estimated earlier this year that there are 1.2 million uninsured North Carolinians and that650,000 could enroll in in the Affordable Care Act. North Carolina is one of 12 states that did not expand Medicaid under the AFCA.

The legislation adds about $150 billion for in-home services under Medicaid, including help with eating and bathing, physical therapy and nursing. This includes a permanent 6% increase the federal contributions to states for those at-home services.

NC EFFECT: NCDHHS provides home-health aides for most of those services, so the program can expand with these new income sources.

EDUCATION ISSUES

HBCUs and other minority institutions will receive $10 billion for grant funding for various projects. The HCBUs will have to compete for funding, and there are set-asides for tribal colleges and universities and other minority-based institutions.

NC EFFECT: North Carolina has 10 HBCUs that will benefit from this appropriation.

CLIMATE CHANGE ISSUES

A tax credit will provide up to $12,500 in incentives to some families to buy electric vehicles. There also are incentives for companies to make clean energy products domestically with union workers.  

NC EFFECT: Affordable fuels data center says there are 16,190 registered electric vehicles in North Carolina. Evadoption.com says there were nearly 5,400 sold in 2019.

IMMIGRATION ISSUES

The Department of Homeland Security can give an estimated 7 million unauthorized immigrants — including Dreamers, coronavirus-era essential workers and farm workers — work permits and temporary protection from deportation, similar to the Deferred Action for Childhood Arrivals (DACA), which President Obama implemented.

NC EFFECT: Estimates are that there are about 33,000 Dreamers in North Carolina. Farmworker Legal Aid of North Carolina estimates there are approximately 150,000 migrant farmworkers and their dependents in North Carolina each growing season. About 53% of them are undocumented.

AFFORDABLE HOUSING ISSUES

$150 billion to build or improve more than 1 million new affordable housing units and help with rent and down payments. There also are investments in maternal health, community violence initiatives, Native communities and supply chain resilience.

NC EFFECT: The National Low Income Housing Coalition reports that 35% of North Carolinians rent their housing, with an $18.46 hourly income required ($38,400 annually) to afford an average 2-bedroom apartment. The Census Bureau reports that the median income in North Carolina in 2019 was $28,836.

TAX ISSUES

A 15% minimum tax on corporations, plus a 1% surcharge on corporate stock buybacks.

NC EFFECT: The Institute for Taxation and Economic Policies reported there were 55 profitable companies that paid no income taxes in 2020. Many of those companies – including Duke Energy, FedEx, Lincoln National and Mohawk Industries – have large presences in North Carolina. North Carolina’s state corporate tax rate is being lowered to 0%.

A 5% tax rate above those with an income of more than $10 million, and another 3% surtax on incomes above $25 million.

NC EFFECT: Very, very few North Carolinians will be affected by this. The median income for the top 5% of wage earners is $306,900.

$80 billion for the IRS to hire more specialized agents to root out tax evasion and modernize the agency’s technology.

NC EFFECT: MarketWatch reported that the IRS completed 509,917 audits in 2020, which was down from 771,000 in 2019. That year more than $17 billion in additional taxes was paid.

Restores the state and local tax deduction for federal returns (called SALT), which had been reduced in the tax cuts of 2017. The cap, which critics say mostly helps wealthier Americans in coastal states, would rise from $10,000 up to $80,000 through 2031 and then drop back to $10,000 after that. The Center on Budget and Policy Priorities points out it would mostly benefit Americans who make over $200,000 per year. Current reductions are scheduled to expire in 2026.

NC EFFECT: Taxfoundation.org reported that in 2016, 77% of the benefit of the SALT deduction went to taxpayers with incomes above $100,000; only 6.6% went to taxpayers with incomes below $50,000. North Carolina’s new state budget reduces tax rates to 4.9% in 2022, which means fewer dollars would be available to be deducted under this provision. About 5.4% of households in North Carolina make more than $200,000 a year.

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