10/3/23 Update: Learn about how funding for the American Rescue Plan has expired.
The Biden Administration has outlined their proposal for their American Families Plan. They presented the details of $1 trillion in new spending and $800 billion in tax credits to support families and children. The Administration cites a study that every $1 spent in early childhood is $7.30 ROI—which would have 2 generations of impact. Here are the main points of how young children and families would benefit from the proposed plan:
Make Child Care More Affordable & Higher Quality
- Subsidies to ensure low and middle-income families don’t spend more than 7% of their income on child care.
- Permanent continuation of the tax credits in the American Rescue Plan.
Child Tax Credit, Earned Income Tax Credit, and the Child and Dependent Care Tax Credit. - Child care providers would receive funding to cover the cost of early childhood care and education–including a developmentally appropriate curriculum, small class sizes, and culturally and linguistically responsive environments that are inclusive of children with disabilities.
- Investments for a $15 minimum wage for early childhood staff and to ensure that those with similar qualifications as kindergarten teachers receive comparable compensation and benefits. Ensure child care workers receive job-embedded coaching and professional development, along with additional training opportunities funded by the American Jobs Plan and American Families Plan.
Paid Leave Program
- Not paid by the employer, but rather a government benefit.
- Guaranteed 12 weeks of paid “parental, family and personal illness/safe leave” by its 10th year in existence.
- Workers on leave would earn up to $4,000 a month, with as little as two-thirds or as much as 80% of their incomes replaced, depending on how much they earn.
- Leave would include: the birth of a child, taking care of a sick adult, bereavement, and sexual abuse recovery.
Financing For Universal Pre-K
- Applies to all 3 and 4-year-olds.
- Initially pioneered in recent years by city programs in New York and Washington.
Support for Education and Teachers
- Address teacher shortages, improve teacher preparation, and strengthen pipelines for teachers of color.
- Help current teachers earn in-demand credentials—prioritizing public school teachers.
Invest in programs that leverage teachers as leaders, such as high-quality mentorship programs for new teachers and teachers of color.
Expanded Subsidies Under the Affordable Care Act
- Make the expanded health insurance premiums tax credits in the American Rescue Plan permanent.
Extension of New Federal Efforts to Fight Poverty
- Expand free meals for children in the highest poverty districts (those with at least 40% of students participating in SNAP) by reimbursing a higher percentage of meals at the free reimbursement rate through The Community Eligibility Provision.
- Expand summer Electronic Benefit Transfer (EBT) to all eligible children nationwide.
Adjustments to the Tax Code
- Restore the top tax bracket to what it was before the 2017 law, returning the rate to 39.6% (applies to about 1% of the population).
- Eliminate tax loopholes that allow escaping taxes by passing it down to heirs and treating hedge fund partners’ income like all other income tax.
- No changes to the Payroll Tax.
This isn’t finalized, let alone a passed bill that’s signed into law yet. However, there are a lot of ideas in there that would have a direct impact on American families and their children.
