Late Friday the House passed the $1.2 Trillion Infrastructure Bill which includes additional spending for roads, bridges, public transit, and other projects in addition to the already planned infrastructure spending over the next eight years. President Biden is expected to sign the legislation. The Infrastructure Bill provides for $550 billion of additional spending including:
- $285 billion for various transportation initiatives such as roads, bridges and major infrastructure projects, rail, airports, ports
- $265 billion for other infrastructure such as broadband internet, power, water
Although this bill does not contain tax specific provisions, this bill was used as a negotiating piece for the progressive democrats in the House. As you may recall, the progressive democrats in the House were demanding that both the Infrastructure Bill and Reconciliation Bill be linked together which provided them more leverage on the Reconciliation Bill. Therefore, on Friday in advance of the vote of the Infrastructure Bill, in order to appease some of the progressive democrats, Speaker Pelosi offered progressive and moderate democrats a deal on the Reconciliation Bill allowing the House to pass a procedural measure that will lead to a vote on the Reconciliation Bill after the Congressional Budget Office (CBO) scores the bill.
So where does this leave us on the Reconciliation Bill and the process for it becoming law? First, the House will need to finalize the Reconciliation Bill (H.R. 5376) and pass the bill. According to reports, this is likely to happen after the CBO scores the bill which is expected by November 15, 2021. Then, because the bill is being passed as part of the reconciliation process, the bill will have to go through the process known as “vote-a-rama” which allows Senators to offer amendments to the legislation.
Once the bill with amendments is completed, the Senate will need to pass the bill by simple majority since the bill is structured under the reconciliation process. After the Senate passes the bill, the bill goes back to the House for a vote. If the House passes the Reconciliation Bill with amendments passed by the Senate, the Reconciliation Bill would go to President Biden for his signature.
The current version of the House Bill does not include any of the capital gain increases or estate tax changes previously in the proposal, i.e.
- Increased capital gains taxes
- Decrease in estate tax exemption
- Grantor trust changes
- Elimination of discounts for non-business entities
Note that the previous tax change proposals could be added back into the bill during the reconciliation process.
We will continue to monitor the legislative process and provide updates as applicable.
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