Build Back Better’s Legacy – Could it Still Destroy the US Economy?

Often known as the “BBB,” Biden’s Build Back Better Plan was a cornerstone of his electoral promises in 2020. It was an ambitious social spending package meant to transform the country’s social fabric following the widespread distress brought by the COVID-19 pandemic and its related closures.

The entire plan would have officially cost $1.7 trillion, although experts quickly pointed out its actual cost was likely much higher. At a time of unprecedented inflation, a massive increase in Federal spending was a tough sell for both sides of the political arena. By the time the 2021 State of the Union address rolled around, it was clear that the bill would not get the support it needed.

As of mid-2021, the Build Back Better plan is now officially abandoned. The risk it posed to the United States’ financial stability seems to have subdued. However, some of the reforms BBB proposed have now entered the mainstream political discussion and still have the potential to harm our delicate economy.

Why BBB Was a Major Threat to the Country’s Finances

The Build Back Better Plan was paved with good intentions, but the numbers failed to provide the stairway to heaven it promised. On top of “reversing” the damage caused by the pandemic, it aimed to provide middle-class families with a more resilient welfare system.

The plan included new tax credits for child care, increased public school spending, and a series of disincentives and penalties for employers not offering full healthcare coverage to their employees.

While positive on paper, the BBB relied on many unsustainable government subsidies at a time when policy experts called for responsible government expenditure. In addition, its “disincentive” model placed much responsibility on employers and mid-sized businesses. This meant:

  • Increasing the costs attached to hiring employees
  • Increasing consumer prices for energy, manufacturing, and consumer products
  • Decreasing the ease of doing business through strict regulations and mandates
  • Adding new local, state, and federal taxes for investors and business owners.

Many of the policies introduced by Build Back Better would have provided short-term relief for struggling families. However, by attempting to make them permanent, the initiative paved the path for a less competitive economy and financial stagnation.

Could We See These Threats Resurface?

Alas, the plan did not pass, and in the process, President Biden burnt a lot of his political capital. However, his administration now seems intent on introducing the same measures through a patchwork of smaller, “more acceptable” bills. Combined, these could have the same impact on the country’s economy.

So far, we’ve seen repackaged attempts to reintroduce the following:

Subsidies and penalties around the Affordable Care Act

One of the most controversial moves in the original BBB was a significant expansion of subsidized healthcare coverage. This meant high-income earners would have accessed privileges for the poorest under the original Affordable Care Act.

At first glance, this would relieve the pressure on people whose jobs did not provide full health insurance. However, their employers would have had to cover the resulting bill by facing steep penalties for not offering said insurance.

On average, this penalty would’ve amounted to $4,000 a year per worker. For small and mid-sized businesses, the only way to compensate would’ve been through salary reductions or by postponing new hires.

Family leave regardless of employment status

The concept of “family leave” first entered the mainstream political vocabulary during the early days of COVID-19 lockdowns. The concept is simple: to compensate workers who miss out on work because they need to fulfill “unpaid caregiving activities” – mainly for a sick relative.

The proposed solution offered a cash benefit to anyone who had to care for a family member. However, the lack of checks and balances on this “family leave” policy would’ve left the door open for expensive fraud schemes.

For example, the policy did not check whether someone applying for the cash incentive was indeed employed and therefore missing out on a paycheck. It also did not check the difference between their usual amount of working hours and the current one. As a result, family leave would’ve allowed any to double-dip or to remain willfully unemployed.

Increased Cost of Job Creation

Finally, the bill included an extensive laundry list of penalties for employers who did not comply with federal safety mandates. Despite the relatively high development of Occupational Health and Safety regulations in the country, Build Back Better attempted to introduce stricter goalposts for:

  • The vaccination status of a company’s employees
  • Their carbon emissions
  • The number of workplace incidents

Many of these penalties targeted only “large” employers with 100 or more employees. Once you cross this threshold, the fines per employee can range between 50,000 to 70,000 per year. For a company that needs to expand but doesn’t want to face these costs, the answer is simple: don’t hire.

How Can We Protect the Country’s Financial Future?

As we approach the midterm election, the Democratic Party’s outlook appears grim. It’s understandable that, once they see their seats threatened, representatives and senators will try to bring back many of these populist measures to mobilize their voter base.

Yet, it’s grassroots voters who should remain vigilant. At a time of record-high fuel prices and unsurmountable inflation, it is not the time to gamble with the country’s finances.


Grassroots Pulse covers public policy and political issues aimed at engaging highly-active policy makers, donors, and grassroots leaders at the forefront of the political process in America today.

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