What is American Families Plan? How Joe Biden's $1.8 trillion financial blueprint affects YOU!
Ever since he has taken over the office of the president, Joe Biden has found himself busy, especially with financial plans to strengthen the American economy which has been hit badly by the coronavirus pandemic. On Wednesday, April 28, the Biden administration detailed yet another mega plan worth $1.8 trillion that aims to address various social issues, including access to education, child care and support for working women.
The latest package, called the American Families Plan, is another effort made by the new administration to revitalize the country as well as ensure a more equitable recovery. It came a month after the Democratic leader laid out a mega plan worth $1.9 trillion to provide immediate relief to the country’s families and communities. He initiated the American Jobs Plan to create millions of good jobs, rebuild the US’s physical infrastructure and workforce and encourage domestic innovation and manufacturing.
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What’s there in American Families Plan
What’s in the American Families Plan, which is the second part of the president’s mega financial plan (the other being the American Jobs Plan) that prompted one of the administrative officials to call them “generational investments in our future, in the future of our families and the future of our kids”?
Free education for at least 4 years
According to a fact sheet issued by the White House, the American Families Plan will make “transformational investments from early childhood to postsecondary education” to enable all children and young people to grow, learn and gain the required skills to succeed. The plan will provide universal and quality pre-school to all kids aged three and four besides two years of free community college. It will also make college study more affordable for low- and middle-income students, including those enrolled in minority-serving institutions. Biden has proposed a plan worth $109 billion to make two years of community college free.
Increasing Pell Grants
Biden would give up to almost $1,400 in additional assistance to low-income students by raising the Pell Grant award. Nearly seven million students, including those of color, rely on the grants. While the students can get up to $6,495 for the 2021-22 school year, Biden has promised to make the maximum award double.
Directly supporting children and families
The plan will provide direct support to families to see that low- and middle-income families do not have to spend more than seven percent of their income on child care and that the kind of child care they get is of high standards. The plan also aims to provide direct aid to workers and families by setting up a national comprehensive paid family and medical leave program that will enable the American system to compete with countries that offer paid-leave facilities.
It will also provide critical nutrition assistance to families who are in need for it and help students of the country to have access to healthy meals. Under the plan, families can get a tax credit for as much as half of their spending on qualified child care for kids below 13 years, up to a total of $4,000 for one child and $8,000 for two or more kids. Parents earning less than $125,000 annually are eligible for full credit while those earning between $125,000 and $400,000 will get a partial credit.
Addressing teacher shortages
The American Families Plan aims to address the issue of teacher shortages and encourage their participation, particularly teachers of color. The president is calling on the Congress to even double scholarships for future teachers from $4,000 to $8,000 a year at the time of earning their degree, strengthening the program and also expanding it to early childhood educators. Biden has also planned to invest nearly three billion in Grow Your Own programs and paid teacher residency programs. The plan also allocates $1.6 billion to help current teachers earn credentials for specialties that are in demand, including special education and bilingual education. An additional $2 billion would go toward educator leadership programs, including mentorships for new teachers and those of color.
More nutrition assistance for children
Under his latest plan, President Biden also plans to invest $25 billion to make the Pandemic Electronic Benefit Transfer or Pandemic-EBT permanent and available to 29 million children who get free and reduced-price meals. The Congress created the program last spring to provide funds to families that fall in the low-income bracket and whose children could not get meals in school because of the pandemic. The plan would also expand the free meals program for children in districts having the highest poverty rate so that more than nine million additional kids could qualify.
Making the enhanced earned income tax credit permanent
The latest financial plan also aims to make the expansion of the earned income tax credit for workers without children permanent. The maximum credit is set to be tripled while the eligibility criterion will be extended to include more childless workers. The minimum age to claim the credit will be reduced from 25 to 19 while the upper limit will be eliminated.
Unemployment insurance reform
The American Families Plan would adjust the durability and amount of the unemployment insurance (UI) benefits that workers can get, depending on their economic conditions. According to the White House fact sheet: “It has been unemployed people of color who have borne the brunt of the UI system’s weaknesses. President Biden is committed to strengthening and reforming the system for the long term. That’s why he won $2 billion in the American Rescue Plan to put toward UI system modernization, equitable access, and fraud prevention.”
Making permanent the Affordable Care Act premium tax credits
While the American Rescue Plan provided premium tax credits to reduce insurance premiums bought through the health insurance marketplace, the American Families Plan seeks to make premium reductions permanent by investing a massive $200 billion in them. According to the White House, nine million people will save hundreds of dollars of insurance premiums yearly and that will help in giving cover to four million people who are not insured.
National paid leave (family and medical)
The US is known to be the only industrialized country that doesn’t guarantee some kind of paid family leave. Under his new plan, Biden seeks to guarantee 12 weeks of paid parental, family and personal leave. The pay would equate to two-thirds of the worker’s average weekly wages, up to $4,000 a month. The aim of the plan is to allow workers to bond with their newborn children, care for sick kin or recover from an illness, adjust to a military deployment, etc.
Extend The Expanded Child Tax Credit
The rescue plan extended the Child Tax Credit (CTC) from $2,000 per child to $3,000 per minors aged between six and 17 and $3,600 for those below six. The plan also gave the option of receiving the credit monthly starting in July instead of waiting to claim the entire credit on taxes. Under the families plan, the changes would be kept intact to the CTC through 2025.