Rebuild America Act Section by Section

8/2/2019 Rebuild America Act Section by Section

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The Rebuild America ActSection by Section Summary

Title 1: Invest in America to Create Jobs and Future Growth

Section 1: Invest in Americas Infrastructure

Part 1: Modernize Americas SchoolsToo many of our nations schools were built over a half century ago and are not equipped tomeet the needs of 21st Century students and teachers. The Act provides formula grants to statesover 10 years for competitive matching grants to local entities for the modernization, renovation,and repair of early childhood education and care facilities, k-12 public schools, and communitycolleges. Grants are distributed to states based on poverty and population and States mustdescribe how they will consider the impact of potential projects on job creation and give priorityto eligible entities that use green practices and serve the largest percentages of low-incomepopulations, among other things.

Part 2: Create 21st Century Renewable Energy Systems

Widespread transformation of our energy systems to enhance energy security and lessenenvironmental impacts will require energy systems changes by citizens and communities acrossthe country. This section establishes a program to support communities in efforts to undertakecomprehensive energy systems renovation strategies. Communities will compete for funds toanalyze current energy use, formulate strategies to increase use of energy efficiency andrenewable energy, and implement those strategies. The program will be administered by theDepartment of Energy in collaboration with State Energy Offices.

Part 3: Invest in Americas Roads, Bridges and InfrastructureOur economy rose to greatness on the back of robust federal investment in our infrastructure. Yetin recent decades, weve failed to keep up. To help overcome our infrastructure gap and toimprove the efficiency of our economy, the Act provides significant long-term investment in awide array of existing infrastructure programs, including roads, bridges, sewer-water systems,levees, and rural infrastructure. The Act provides higher spending levels for the first two years tohelp create jobs while the economy remains weak.

Section 2: Support Great Teachers

Teacher effectiveness has a greater impact on student achievement than any other in-schoolfactor. To help teachers develop the skills to prepare all children to graduate high school collegeand career ready, the Secretary of Education is authorized to offer grants to states for three tofive years to work with school districts to provide intensive professional development to teachersand other school personnel. The professional development provided through this grant programwill support teachers in teaching to the new rigorous standards states have adopted and improvestudent achievement.

Section 3: Rebuild Americas Manufacturing Power

Part 1: National Manufacturing StrategyThe section requires the President to develop a national manufacturing strategy and submit thatstrategy to Congress. The goals of the strategy are to increase the number of manufacturing jobs,to identify manufacturing sectors in which the US is most competitive, and to develop policies to


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support those sectors. The President is required to make recommendations to accomplish thegoals of the strategy and submit those to Congress.

Part 2: Sectoral Technology and Innovation CentersThis provision authorizes the Secretary of Commerce to provide grants to establish sectoral

technology and innovation centers. These nationwide centers will help small and medium sizedmanufacturers bridge the gap between research and product development and manufacturingefficiency. The Secretary will award grants to coalitions of stakeholders that partner withnational labs or institutes of higher education, with a preference for those that work closely witha successful local industry cluster.

Part 3: Enhanced Funding for Manufacturing Extension PartnershipThis section provides additional funding that will double the budget for the ManufacturingExtension Partnership (MEP). Housed in the Department of Commerce, the MEP program workswith small and mid-sized U.S. manufacturers to help them create and retain jobs, increase profits,and save time and money.

Part 4: Research & Development Tax CreditTo improve the R&D tax credit, this section of the Act increases the credit up to 20% byproviding a bonus for manufacturing companies that undertake research and increaseemployment in the United States over a select period of time. In addition, to provide greatercertainty to businesses seeking to use the credit, the Act extends the credit for 5 years.

Part 5: Access to Credit for Small ManufacturersParticularly in the wake of the recession, small manufacturers are having a difficult timeaccessing credit from financial institutions. To help small manufacturers that have work-ordersin hand get credit, the Act creates a 95% loan guarantee program for small manufacturers underthe SBA 7(a) guarantee program.

Part 6: Pursue Fair TradeThe demand created by Americas middle class is the engine of the worlds economy, but wewont have a thriving middle class if we allow our trading partner to use unfair trade practicesthat undercut American workers and manufacturers.

Trade Agreements: This section establishes a point of order against any bill implementinga trade agreement unless that trade agreement meets certain standards relating to laborrights, environmental and public safety standards, and investment, including investmentsin state-owned enterprises. Waiving the point of order requires 60 votes in the Senate andis not subject to amendment.

Trade Enforcement Funding: This provision provides permanent, mandatory funding tosupport the newly created Interagency Trade Enforcement Center. $26 million isprovided for FY2013, with subsequent years indexed for inflation.

Combat Unfair Currency Manipulation: To help address unfair currency manipulation,this section amends countervailing duty law so that unfair currency manipulation will betaken into consideration when calculating countervailing duties.


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Section 4: Prepare Americans For Jobs of the Future

Building on the model of successful sector partnerships, the Act provides for competitive grantsto regional and statewide partnerships of employers, community colleges, and other essentialeducation and training providers to support the development of career pathways and otherevidence based strategies designed to ensure that Americans obtain the skills and credentials

needed to enter into and advance in high-quality jobs in existing and emerging sectors.

Section 6: Create Middle Class Jobs and Protect Middle Class CommunitiesThis provision provides significant funding over three years to state and local governments tohelp save and create jobs for teachers, cops, firefighters, and other middle class workers. Theseinvestments protect middle class communities by ensuring that we have police and firefighters tokeep us safe and teachers to educate our children. These funds will be used to supplement stateand local funds, and cannot be used for purposes other than hiring and preventing layoffs.

Title 2: Create Financial Stability and a Better Future for Middle Class Families

Section 1: Alleviate the High Cost of Child Care

Child care costs comprise a significant portion of the annual budget for most middle classfamilies. The Act provides formula grants to states to improve the quality of child care, subsidizethe cost of child care for poor and working families, and to encourage the development of highquality child care programs and services in poor and otherwise deserving communities. A Stateapplying for a grant must use 10% of funds to enhance the skills, knowledge, and credentials ofthe child care workforce, 10% of the funds to support quality improvements, and remainingfunds to increase the quality and availability of child care throughout the state.

Section 2: Help Americans Enjoy their Golden Years

Part 1: Improve the Private Retirement SystemThe United States faces a retirement crisis. This section outlines the principles needed to create abetter private retirement system going forward. To develop solutions, the Act establishes aCommission on Retirement Security composed of 31 members. Two members will be chosen byeach of the Chair and Ranking Members of the Senate HELP, Senate Finance, House Educationand Workforce, and House Ways and Means Committees. The President will appoint 15members. The Commission will review the state of the retirement system, identify problems, andanalyze potential solutions. One year after enactment, the Commission shall submit a report tothe Congress with recommendations on how to address the retirement crisis.

Part 2: Strengthen Social SecurityTo improve benefits for current and future Social Security beneficiaries, the Act changes themethod by which the Social Security Administration calculates Social Security benefits. SocialSecurity benefits are based on a progressive formula which provides certain replacement factorsfor certain segments of earnings. That formula currently provides a 90% replacement factor forAverage Indexed Monthly Earnings (AIME) up to the first $767 in earnings. The Act expandsthe amount of earnings covered under this high replacement factor by 15% in order to increasethe amount of AIME that receives the 90% replacement rate. When fully phased in, this changewill increase Social Security benefits by approximately $60 per month, or $800 per year.


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In addition, the Act changes the way the Social Security Administration calculates the Cost ofLiving Adjustments (COLA). Currently, the annual adjustment is tied to the Consumer PriceIndex for all Urban Wage Earners (CPI-W) for the purposes of calculating inflation. To ensurethat benefits better reflect cost increases facing seniors, future COLAs will be based on theConsumer Price Index for the Elderly (CPI-E).

Social Security is not in crisis, but does face a long-term deficit. To help extend the life of thetrust fund, and decrease the 75 year actuarial deficit, the Act phases out the current taxable cap of$110,100 so that payroll taxes apply fairly to every dollar of wages. This will ensure morebalance in the Social Security system, so that all Americans contribute to Social Security taxesfairly. To preserve the progressivity and universality of the system, the Act creates a newreplacement factor of 5% for income over the current wage cap. Combined with the benefitincreases in the Act, these steps will strengthen the life of the Trust Fund to 2052 and reduce the75 year actuarial deficit by approximately 50 percent.

Section 3: Protect Overtime Pay for Working Americans

The Act ensures that workers called on to work long hours receive the fair pay they deserve. Todo so, it updates the threshold used to determine which white collar workers automaticallyqualify for time-and-a-half when they work beyond a normal workweek. This thresholdwhichis currently $455 a week, or $23,660 annuallywill be raised and indexed to inflation to ensurethat low- and mid-wage workers are not taken advantage of by being forced to work longer hoursfor meager pay.

Section 4: Prevent Americans from Having to Choose Between Their Health and Their

Paycheck

To ensure that Americans dont have to choose between their health and their paycheck, and tokeep American workplaces healthy, the Act provides Americans with paid sick days they can useto care for themselves or a family member. Specifically, the Act includes the text of S. 984, theHealthy Families Act. The Healthy Families Act allows workers to earn up to 7 days of paid sicktime annually by accumulating 1 hour of paid sick time for every 30 hours worked. Workers canuse this time to stay home and get well when they are ill, to care for a sick family member, toobtain preventative or diagnostic treatment, or to seek help if they are victims of domesticviolence.

Section 5: Establish a Fair Minimum Wage

This section increases the federal minimum wage in three annual increments to $9.80 per hourand indexes it to inflation thereafter. In addition, it also increases the minimum wage for tippedworkers to 70% of the federal minimum wage.

Section 6: Empower Hardworking Americans

The Act addresses two fundamental problems that limit workers ability to stand up for fairtreatment. First, many workers are excluded from the protections of the National Labor RelationsAct altogether, either because employers circumvent the law, or because courts have improperlynarrowed the laws protections. The Act would restore the original intent of the NLRA byclarifying that workers who are currently mischaracterized as supervisors or independentcontractors are entitled to basic workplace rights. Second, the penalties for violating workers


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rights under the NLRA are currently so weak that employers can violate the law with impunity.The Act would restore real teeth to the law, providing greater incentives for employers to respectworkers rights.

Section 7: Increase Job Opportunities for Americans with Disabilities

The employment participation rate for people with disabilities has been stagnant for over 20years. Only one-third of adults with disabilities participate in the workforce today. In order toencourage hiring of individuals with disabilities, the Act expands the Work Opportunity TaxCredit. Traditionally, the Work Opportunity Tax Credit has provided employers with a credit of40% of the first $6,000 of covered wages for select groups. This section of the Act increases theWOTC for individuals with disabilities to 40% of the first $30,000 in wages and permits theWOTC for individuals with disabilities for two years, instead of one year. In addition, it expandsthe WOTC to also include individuals with disabilities on SSDI and those who are eligible toreceive vocational rehabilitation services, but are not receiving such services. In addition to thesechanges, the Act also extends the entire WOTC through December 31, 2015 for all groups.

Title 3: Restore Fairness to the Tax Code and Ensuring Fiscal ResponsibilitySection 1: Institute the Buffet Rule

The Act incorporates legislation authored by Senator Sheldon Whitehouse, the Paying a FairShare Act of 2012, which institutes President Obamas proposed Buffett Rule. This provisionwill ensure that the highest-earning Americans, those with annual income over $1 million, payno less than a 30% effective tax rate. This proposal is estimated to raise $47 billion over 10 yearsaccording to the Joint Committee on Taxation.

Section 2: Adopt a Wall Street Trading and Speculators Tax

The section includes the text of S. 1787, the Wall Street Trading and Speculators Tax Act, whichplaces a small tax of 3 basis points (3 pennies on $100 in value or 0.03%) on trading of financialsecurities, including stocks, bonds and other debt securities, except for their initial issuance. Thetax would also cover all derivative contracts at their actual cost, rather than the notional cost oftheir underlying security. This proposal is estimated by the non-partisan Joint Committee onTaxation to generate $352 billion over 10 years.

Section 3: End Tax Breaks for Companies that Ship Jobs Overseas

The section includes four provisions similar to those proposed in Presidents budget to eliminateexcessive tax benefits that are used to lower U.S. taxes related to foreign earned income. Theseinclude deferring deductions of interest expenses related to foreign deferred income, determiningforeign tax credits on a pooling basis, limiting excess returns on intangible assets and modifyingthe rules for duel capacity taxpayers. The Joint Committee on Taxation estimates these itemswill raise about $120 billion over 10 years.

Section 4: Make Wall Street to Take Responsibility

This section includes the Administrations FY 12 request to acquire $65 billion over 10 yearsfrom large financial institutions with assets of more than $50 billion that received emergencyfinancial assistance through the Troubled Asset Relief Program or Emergency EconomicStabilization funds.


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Section 5: Make Hedge Fund Managers Pay the Same Taxes as the Rest of Us

This section includes the text of the Congressmen Levin-Rangel bill on carried interest. Itconsiders carried income that does not involve investments by the recipient to be earned incometaxable at the regular rate on which payroll taxes would be owed.

Section 6: Raise the Capital Gains RateThis section of the Act raises the rate on capital gains to 28%, effective for 2013 for those inhigher tax brackets.

Section 7: Protect PensionsPart 1: Improve the PBGCThe Pension Benefit Guaranty Corporation (PBGC) plays a critical role in helping to protect theretirement security of the 44 million workers and retirees with defined benefit pensionplans. However, the Corporation has struggled over the years to address deficiencies andimplement long-term strategies for success. The Corporation also faces long-term fiscalchallenges, which have been exacerbated by the recent financial crisis. This section takes

immediate steps to protect workers and retirees by improving the Corporations governance,guaranty, and solvency.

Part 2: Improving the Financial Stability of the Pension SystemDefined benefit pension plans are a critically important to providing retirement security tomiddle class Americans. However, the ongoing effects of the financial crisis have put enormousstress on the pension system. This section improves the financial stability of the system byreducing contribution volatility and encouraging employers to continue provide pensions. It alsoprovides participants with additional protections should their pensions be terminated inbankruptcy.

Section 8: Close Loopholes to Prevent Worker Misclassification

Many employerseither purposefully or because they lack guidanceimproperly classify theiremployees as independent contracts. As a result, the employers fail to withhold income taxes,pay the employers share of Social Security and Medicare taxes, and pay for unemploymentinsurance for millions of Americans. This section of the Act is identical to S.2145, and willprovide a fairer playing field to Americas businesses and workers by helping employers toproperly classify their workers. That will ensure that all workers are afforded the protectionsalready in the law and that employers who play by the rules are not forced to compete againstbusinesses that dont.

Documents

Rebuild America Act Section by Section