Biden to announce “family plan” seven major benefits to see first

President Joe Biden holds a microchip as he speaks before signing an executive order to secure key supply chains at the White House on Feb. 24, 2021.

President Joe Biden will formally introduce his “The American Families Plan” to a joint session of Congress on Wednesday evening (April 28), which would include paid family leave, child care subsidies, expanded family tax cuts, universal preschool and free community college. The total value of the plan is expected to reach $1.8 trillion.

This is the second element of the Biden administration’s “Build Back Better” economic agenda, following the $2.3 trillion infrastructure and jobs plan released earlier this month.

The family plan, described as an “investment in future generations,” emphasizes the need to outpace China (the Communist Party) and transform the U.S. economy, with $1 trillion in spending and $800 billion in tax breaks for the middle class expected over the next 10 years, senior officials said.

At the same time, Biden would raise the top capital gains tax rate for the wealthy to 39.6 percent to raise some of the budget; the tax would affect families with annual incomes of more than $1 million. Media reports indicate that Biden will ask the IRS to step up enforcement, end preferences for hedge fund partners and real estate investors, or impose an estate tax to pay for the rest of the massive budget.

But the legislative path for the plan remains unclear and is likely to face strong opposition from Republicans.

Here’s what the Families USA plan would contain

  1. Paid leave and child care program

The plan would provide $225 billion to the Paid Family and Medical Leave program, which would provide three months of partial employment assistance to workers to spend time with a newborn child, recover from an illness, care for a disabled loved one, handle a partner’s military deployment or deal with an emergency.

Individuals applying for paid leave can receive up to $4,000 per month in assistance, or as low as two-thirds of the average weekly wage. Workers on minimum wage may receive 80 percent during paid leave.

In addition, $225 billion would be allocated for child care costs for low-income and middle-class parents with children 5 years old or younger. According to a study cited by the White House, the U.S. lost $57 billion in income and productivity during last year’s epidemic due to a lack of child care options.

The program would pay for all child care costs for families most in need. Those earning 1.5 times the state median (1.5 times) would pay no more than 7 percent of their income for child care.

The program requires that the minimum hourly wage for child care workers be raised to $15.

  1. Free preschool for all families

Biden proposes to invest $200 billion to provide free preschool to all children between the ages of 3 and 4, regardless of family income. The federal government would seek to work directly with preschool providers in states that do not participate.

The White House says a national preschool expansion would benefit 5 million children and save the average family $13,000.

In addition, the plan aims to address teacher shortages and meet the expected growth in preschool education by increasing funding for educator scholarships and professional training, as well as raising salaries for certain groups in the federal program.

  1. Free community college

The plan also calls for $109 billion to make community college in the United States free, so that all first-time students and workers would not have to pay tuition for two years of community college study. The program would also apply to Dreamers, undocumented immigrants who were brought to the United States as children.

As with the preschool program, states would have to work with the federal government to receive federal funding. If every state did so, an estimated 5.5 million students would benefit.

However, in places like Tennessee, New York, Oregon and Rhode Island, their community colleges have transitioned to free college.

  1. Child tax credit extended to 2025

The plan would extend the child tax credit, previously passed under the American Rescue Plan, through 2025. It would also provide permanent American Rescue tax credits for families with child care needs and workers without children.

Under the program, families can receive tax credits to cover half of the cost of qualifying child care for children under age 13, totaling $4,000 for one child and $8,000 for two or more children.

Parents earning less than $125,000 per year are eligible for the full credit, while parents earning between $125,000 and $400,000 will receive a partial credit.

  1. Income tax credit for childless persons

The latest program will make the earned income tax credit for childless workers permanent. The minimum age to claim the credit would be reduced from 25 to 19, and the age cap would be eliminated.

  1. Health insurance premium reduction made permanent

The proposal would not lower Medicare’s age eligibility requirements to expand coverage, nor would it take steps to lower prescription drug prices.

White House officials said the president remains “fully committed” to the negotiations, even though the package does not mention lowering prescription drug prices.

The main health care program in the plan is to make permanent the health care premium reductions in the Affordable Care Act (ACA, also known as Obamacare).

  1. Pell Grants, Advanced Business Schools, and School Lunch

The program will take steps to make college more affordable for low-income students, including: Pell Grants, which will provide an additional $1,400 in aid to low-income college students; an enhanced grant program for low-income students to complete college; and tuition subsidies for at least two years for students who attend black colleges and universities and earn less than $125,000 per year.

In addition, free and reduced-price lunches for low-income children may be extended through the summer; and free meals will be expanded to high-poverty areas.