On April 28, 2021, President Joseph Biden unveiled his proposal for the American Families Plan, a massive bill that the Biden administration says will help revitalize the economy and ensure rapid and fair recovery from the COVID-19 pandemic. The breakdown of the American Families Plan is below.
CHILDCARE, THE CHILD TAX CREDIT, AND EARLY EDUCATION
The Plan proposes a wage increase for childcare providers, up to $15 per hour. The plan also calls for a 7% cap on childcare expenses for low-income families to keep childcare costs affordable for working-class families.
The President has been pressuring Congress to make permanent changes to the child and dependent care credit in the relief package. Under this plan, families earning less than $125,000 could receive up to $4,000 for one child or $8,000 for two or more children. Families earning between $125,000 and $400,000 will receive a partial credit.
The proposed bill also calls for universal preschool for all American children. According to the Biden administration, universal preschool would save the average American family approximately $13,000 per year, and positively impact 5 million children. While this provision is accessible to families of all income levels, this plan is supposed to prioritize children in high-need areas.
COMMUNITY COLLEGE
The proposal allocates $109 billion to make two years of community college free for American students. According to a senior-level administrative official, 75% of the cost of free college would be covered by the federal government, while the remaining 25% would be paid for by the respective States. If all states and territories participate, approximately 5.5 million Americans would receive a community college-level education for free.
Progressive Democrats have argued that Biden’s plan doesn’t go far enough. While Biden’s plan would help a lot of people, it backpedals on the campaign promise Biden made. During his campaign, he argued for making four year public education free and canceling student loan debt.
PELL GRANTS
Pell Grants are financial aid funds provided by the federal government to students from low-income families, up to $5,000 per semester per student. This plan would increase the Pell Grant award by up to $1,400 in additional assistance.
PAID FAMILY AND MEDICAL LEAVE
The paid family and medical leave provision was passed in a limited capacity as part of the first pandemic package in March 2020. It provided up to two weeks of paid leave for sick or quarantined workers and an additional 10 weeks of paid family leave to allow employees to care for sick children at home. This provision expired in December 2020.
The American Families Plan would provide workers with a total of “12 weeks of guaranteed paid parental, family and personal illness/safe leave by the 10th year of the program.” The plan would ensure three bereavement days.
EDUCATOR WORKFORCE
To address America’s shortage of teachers, the plan proposes that Congress double its scholarships for prospective teachers from $4,000 to $8,000 per year. The plan also calls for an investment of $400 million in “teacher preparation programs at historically Black colleges and universities (HBCUS), tribal colleges and universities servicing minorities, $900 million in development for special education teachers, and $2.8 billion in year long paid teacher residency programs.”
The American Families Plan would allocate $1.6 billion to help teachers earn credentials for special education and bilingual education programs. $2 billion would be invested in educator leadership programs, such as mentorship programs for new teachers and teachers of color.
According to the White House, all teachers teaching in preschools and Head Start -- a federal health and education program for low-income children -- would earn at least $15 an hour.
NUTRITION ASSISTANCE FOR CHILDREN
In March 2020, as a response to the pandemic, Congress created the Pandemic EBT program. It provides low-income families with money to buy food. These benefits were distributed to more than half of school aged children last year. The Plan makes this program permanent to provide for the 29 million children who receive free or reduced meals. The Plan expands the program to include children who are in the highest poverty districts. If implemented, this program would feed an additional 9.3 million children.
OBAMACARE
To bolster the Affordable Care Act (“the ACA” or simply “Obamacare”), the American Families Plan makes it so that participants in the program spend no more than 8.5% of their income on health insurance, down from about 10%. Low-income enrollees would be entitled to subsidies that could potentially eliminate their premiums completely.
MAKING THE ENHANCED EARNED INCOME TAX CREDIT PERMANENT
This plan would make the expansion of earned tax credit permanent for workers without children. The relief package bolstered the credit by almost tripling the maximum credit and extending eligibility to more childless workers. The minimum age to claim the credit will be reduced to 19, down from 25, and the maximum age will be eliminated. If passed, this will be the largest expansion to earned income tax credit since 2009.
For a fact sheet on the plan, directly from the Biden administration click here.
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