Breaking it down: What’s in Biden’s $1.8T American Families Plan and how could it impact Florida?

National

TAMPA, Fla. (WFLA) – The White House released details on President Joe Biden’s American Families Plan on Wednesday in a fact sheet that details the intent and budget expectations for Biden’s third step to shift America’s infrastructure and socioeconomic outlook ahead of his first joint address of Congress.

Earlier predictions and plans had given the American Families Plan a $1.5 trillion price tag, on top of a proposed $2.3 trillion for the American Jobs Plan and the already-passed American Rescue Plan’s $1.9 trillion. The White House fact sheet on the American Families Plan shows that instead of a $1.5 trillion effort, they now are planning for nearly $2 trillion, with $1 trillion in spending and $800 billion in tax credits aimed at investing in America beyond simply restoring the United States to its pre-pandemic status.

“It is not enough to restore where we were prior to the pandemic. We need to build a stronger economy that does not leave anyone behind – we need to build back better. President Biden knows a strong middle class is the backbone of America,” the American Families Plan fact sheet says.

The scope of the American Families Plan is objectively ambitious. While the Jobs Plan focuses on creating jobs and rebuilding physical infrastructure, the Families Plan attempts to invest not only in children and families, but in health care, education and pulling more of the public out of poverty.

For Florida, agreeing to the plan would mean more funding for college, allowing low and middle-income students a more affordable four-year degree – or a free two years of community college – and providing more direct support to children and families in need.

The bulk of the proposals in the American Families Plan would need state support or an act of Congress to be enacted. According to the release from the White House, the plan would be used to grow the middle class, expand benefits for all Americans, and make the U.S. more competitive.

Here’s what the American Families Plan proposes, and how it could impact Florida:

Reform unemployment and expand tax credits

Unemployment insurance is a major focus of the American Families Plan. The COVID-19 pandemic saw unemployment help millions of Americans as businesses closed and job opportunities dried up.

Still, despite the system in place, “too often Americans found themselves waiting weeks to get the benefits they deserved,” according to the release from the White House.

The wait times for unemployment assistance in Florida were not an exception to this trend, with a series of information issues and technical glitches exacerbated by the volume of applicants during the pandemic.

The Florida Department of Economic Opportunity reports that the state lost 1,269,200 jobs from February to April 2020. As of March 2021, 750,700 jobs have returned, but the DEO reports employment levels are still more than 445,000 jobs lower than the previous year.

Biden’s plan proposes reforming the unemployment insurance system to help more Americans, saying it “is in desperate need of reform and strengthening.”

According to the fact sheet, Biden wants to work with Congress to make adjustments to modernize the unemployment insurance system and adjust the length and amount of benefits for workers, based on what they call “economic conditions.”

One of the goals of the proposed legislation in the American Families Plan is to prevent delays in recovery.

If passed, the legislation “will ensure future legislative delay doesn’t undermine economic recovery and it will enable permanent reform of the system to provide the safety net that workers deserve in the hardest times,” according to the White House.

The plan also looks to “invest in maternal health and support the families of veterans receiving health care services,” but the extent and cost of that goal has not been spelled out, yet.

Expand tax credits from American Rescue Plan

The American Families Plan also proposes cutting taxes for families and workers and increasing taxes on the wealthiest Americans. Building off of the legislation passed in the American Rescue Plan, the American Families Plan would expand Affordable Care Act premiums tax credits and raise taxes on the wealthiest Americans.

Through the plan, Biden wants to lower prescription drug costs by letting Medicare negotiate prices for prescriptions, reduce health insurance premiums and deductibles for Americans who purchase their own coverage, create a public insurance option and enroll people in Medicare at 60.

According to data compiled by the Kaiser Family Foundation, 40.3% of Floridians received health insurance coverage through their employers, while 17.4% came from Medicaid, 18% from Medicare, 1.7% through Military benefits, 9.5% from “non-group” and 13.1% were uninsured. Non-group insurance “includes those covered by a policy purchased directly from an insurance company, either as policyholder or as dependent,” according to the KFF.

If passed, estimates from the U.S. Department of Health and Human Services say 318,500 Florida residents who are currently uninsured would be eligible for tax credits, while 270,600 would be eligible for marketplace coverage. The change of age for Medicare would close a coverage gap that could help millions of Americans get health insurance who are otherwise not covered.

The American Rescue Plan lowered health premiums for two years for Americans buying their own coverage, according to the White House fact sheet. The American Families Plan would work to make those premium reductions permanent at a cost of $200 billion.

The Child Tax Credit, expanded in the American Rescue Plan, could also see some modification.

The American Families Plan would extend the Child Tax Credit to 2025 and expand it again, making the credit per child go from $2,000 to $3,000 for children 6 or older, and $3,600 for children under 6. Seventeen-year-olds would also be eligible, and “makes the credit fully refundable on a permanent basis,” giving more benefits to low-income families.

Biden’s plan, as detailed, would also change the method for receiving the tax credits. Rather than a lump sum during tax season, it would split the amounts into multiple payments.

“The credit would also be delivered regularly. This means that families will not need to wait until tax season to receive a refund. Instead, they will receive regular payments that allow them to cover household expenses as they arise,” according to the White House.

The end goal for the Child Tax Credit is to make it permanent, in addition to the other expansions created as part of the American Rescue Plan.

Provide child care tax credits, paid leave, expand SNAP and EBT

Biden is also calling on Congress to make the expansion of the Child and Dependent Care Tax Credit permanent, adding to the expansion from the American Rescue Plan.

Families would receive a tax credit up to half of their spending on qualified child care for children younger than 13, up to a total of $4,000 for a single child or $8,000 for two or more in a family. A 50% reimbursement would also be made available to families making less than $125,000 per year. Families making up to $400,000 would receive a partial credit to be used on expenses ranging from full-time care to after-school or summer care.

On top of the child care tax credit expansions, Biden wants to create more affordable child care. Families who earn 1.5 times their state’s median income will pay 7% or less on child care. In Florida, that means families earning $88,840.50 per year.

If Congress does not extend the expansion, the White House says more than 6 million families could have their taxes increased at the end of the year. The tax credit is expected to work with the direct investments in affordable child care detailed in the American Families Plan.

The American Families Plan proposes adding paid family and medical leave, an issue made more significant by the COVID-19 pandemic. Biden’s plan details say that the U.S. has fallen behind its economic competitors when it comes to women participating in the work force, and that “a lack of family-friendly policies,” like paid family and medical leave, are a big part of why the U.S. has lost some of its competitive edge.

If passed, the American Families Plan would create a national, comprehensive paid family and medical leave program, allowing workers to receive partial wage replacement when taking leave for the birth of a child, caring for ill loved ones, dealing with a family member or loved one’s military deployment, sheltering from sexual assault, stalking or domestic violence, recovering from serious illness or mourning the loss of a loved one.

By the numbers, the American Families Plan would guarantee 12 weeks of paid parental, family, and personal illness/safe leave by the 10th year of the program, providing workers up to $4,000 a month with a minimum of two-thirds of weekly wages replaced on average.

White House estimates say the program would cost $225 billion over 10 years.

Feed American students, former felons

Biden also wants to expand the summer Electronic Benefits Transfer to include all eligible children across the country. The American Rescue Plan’s Summer Pandemic-EBT was created to address food insecurity during the COVID-19 crisis.

The American Families Plan would build on the summer program, investing $25 billion to expand eligibility for free or reduced-price meals for 29 million children and launch a health foods incentive demonstration, building on previous efforts of the Obama Administration.

Fed by the Supplemental Nutrition Assistance Program, school districts with at least 40% of students in the SNAP program or individual schools or groups of schools that meet the criteria receive meals free of charge to all of their students.

The American Families Plan would fund a $17 billion expansion, allowing for free meals for children in high-poverty districts that benefit from the Community Eligibility Provision. The plan, if enacted, would also lower the criteria to include schools or districts with 25% student SNAP participation, rather than the current 40%.

On top of assisting high-poverty schools and students, Biden’s American Families Plan proposes expanding SNAP eligibility to Americans convicted of drug-related felonies. Right now, convicts of drug-related felonies cannot receive SNAP benefits unless the state they live in has removed or changed the restriction on their own.

Universal pre-K, investment in teachers, training, higher teacher wages

On top of getting free meals to the most impoverished students and providing funding for child care to working families, Biden’s American Families Plan proposes creating a universal pre-school program for all children ages 3 and 4.

Citing research published on behalf of the Association for Public Policy Analysis and Management, the White House says children who attend universal pre-K are more likely to take honors classes and are less likely to be held back or repeat a grade. The American Families Plan fact sheet, citing other studies, says low-income children who attend universal programs do better in math and reading, but that children of color and low-income children don’t have access to the full range of high-quality preschool programs.

Calling for a national partnership with the states to offer free, high-quality preschool with more access and inclusion, Biden’s plan says it expects to benefit 5 million kids and save families $13,000 on average once implemented.

The plan would invest $200 billion to prioritize high-need areas, providing “critical benefits” to children and allowing parents to have increased work force participation, especially among women.

As detailed so far, the American Families Plan would make sure publicly-funded preschool programs are high-quality, with low student-to-teacher ratios and developmentally appropriate curriculum, in a supportive and inclusive environment. Additionally, the plan would invest in tuition-free community college and teacher scholarships for those who want to earn bachelor’s degrees or other credentials to support their work as teachers, as well as receive job-embedded coaching and professional development.

Employees in the proposed pre-K programs and Head Start would earn a starting wage of $15 per hours, with increased pay “commensurate with that of kindergarten teachers.”

Invest in free education, higher education

The education portion of the plan doesn’t stop with preschool, and also pitches an offer for two years of free community college to all Americans, including DREAMers – or students who were brought to the U.S. as minors without legal authorization.

The COVID-19 pandemic has led to what the White House calls a “steep college enrollment decline,” particularly among low-income students and students of color. Citing a study by the National Student Clearinghouse Research Center, the American Families Plan says that there was a 9.4% drop in high-minority college enrollment and an 11.4% drop in high-poverty college enrollment.

Still, the plan’s fact sheet says that even before the pandemic, the cost of entry was a barrier for attending and graduating from community colleges. Biden proposes $109 billion to allow first-time students and workers a chance to reskill and enroll in community college to earn degrees or credentials for free, with a three-year time limit on the benefit.

Additionally, Biden’s plan would increase Pell Grants for low-income students by $1,400, benefiting a reported 7 million students who depend on the grants to help pay for tuition. Over time, the White House says the grants have not kept pace with the rising costs of higher education. The CBPP says the value of Pell Grants has “plummeted” over the past 50 years.

According to the plan’s fact sheet, the White House expects the proposed educational investment investment to increase college retention and lead to a more financially stable, more highly paid and socially mobile work force, as well as a reduction in crime rates, higher civic engagement, and better health outcomes.

The $62 billion investment proposed for a grant program would be targeted to “serve high numbers of low-income students, particularly community colleges.”

Another $39 billion is proposed to invest in creating a program that would provide two years of subsidized tuition to students at Historically Black Colleges and Universities, Tribal Colleges and Universities and Minority Serving Institutions. Families that earn less than $125,000 and have a student enrolled in a four-year HBCU, TCU or MSI would qualify for tuition from the program, if the American Families Plan passes in Congress.

Biden also plans to have more opportunities for education and preparation for teachers as the country’s teacher shortage continues to grow. Before the COVID-19 pandemic, there was an estimated 100,000 certified teacher shortage nationally.

Biden is asking Congress to invest $9 billion in teachers to address shortages, improve training, support teachers and boost teacher diversity. The investments are aimed at improving the quality of teachers entering the workforce, increase retention rates, and increase the number of teachers of color to improve student outcomes.

By increasing retention and teacher quality, Biden hopes the American Families Plan will lead to improved academic achievement, higher high school graduation rates, higher long-term earnings, more job creation, and a boost to the economy.

Biden’s plan also looks to invest in educator leadership with $2 billion for support programs that leverage teachers as leaders, help current teachers earn in-demand credentials with a $1.6 billion investment for certifications and strengthen pipelines for teachers of color by doubling scholarships for future teachers through a $2.8 billion investment in Grow Your Own programs.

Income, inequality, increased taxes on the wealthy

Biden is seeking to make the Earned Income Tax Credit expansion for workers without children permanent. The EITC expansion in the American Rescue Plan benefited 17,271,000 American workers, based on data from a March 2019 U.S. Census Bureau Current Population Survey.

Biden’s plan also gives the IRS authority to regulate paid tax preparers, who the White House says have high error rates, causing “costly audits” for taxpayers. The president calls on Congress to pass legislation that will give the IRS oversight authority as taxpayers claim expanded tax credits.

In the focus on the American worker, Biden’s plan says his tax agenda would reverse giveaways created by President Donald Trump’s signature 2017 tax law, but also reform the tax code so wealthy Americans “have to play by the same rules as everyone else.”

By reforming the tax code and working to revitalize enforcement actions by the IRS, Biden hopes to ensure all Americans follow the same rules, targeting enforcement at Americans with the highest incomes, instead of those making less than $400,000 per year.

The additional resources for enforcement are expected to lead to $700 billion in tax revenue over 10 years, according to the White House.

In the American Families Plan, Biden also says he wants to increase the tax rate on America’s wealthiest citizens to 39.6%, up from the current top income tax rate of 375. The change in tax rate is expected to increase taxes for the wealthiest 1%.

Along with the tax rate change, Biden is asking Congress to close the carried interest loophole, making hedge fund partners pay ordinary income tax rates like other, “ordinary workers.”

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