8 ways the American Families Plan offers historic progress for childrenChild Care Education Federal Budget Nutrition Poverty & Family Economics Tax Policy
The American Families Plan, released today by President Biden, may be the most important piece of legislation for children in our nation’s recent history.
“This plan has the potential to be the most important piece of legislation for children and families to ever be enacted into law,” said Bruce Lesley, president of First Focus on Children. “This proposal recognizes that the global pandemic and economic recession have put unsustainable stress on children and families across this country and addresses enormous problems that have plagued our children since well before the current crisis, including child poverty, inadequate early childhood development, educational inequities, substandard and unaffordable child care, health care affordability, the financial perils of family medical caretaking, and college affordability. The legislation also addresses racial and socio-economic inequities among our children. We applaud President Biden for stepping up for children and families in this major and historic way, and we call on Congress to make these proposals law.”
Among the most important provisions in the Biden Administration package for children and families:
1. Expanding and Improving Child-related Tax Credits: The proposal extends the critically important tax provisions in the American Rescue Plan that have the potential to cut child poverty in half and will benefit an estimated 66 million children — or more than 90% of all the children in this country. The American Families Plan achieves this by:
- Making the Child Tax Credit fully refundable on a permanent basis, meaning that even families who earn too little to qualify under previous law would receive the refund now and in the future.
- Expanding the credit to include 17-year-olds for the first time.
- Increasing the Child Tax Credit from $2,000 per child to $3,000 for children between the ages of 6-18; to $3,600 for children under the age of 6 through 2025.
- The plan also, critically, would deliver the Child Tax Credit regularly, meaning 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.
- Making permanent the Child and Dependent Care Tax Credit (CDCTC) improvements, which made the credit refundable for the first time and will give families, dependent on their income, a credit for up to 50% and up to $8,000 in eligible expenses for one child under age 13 and up to $16,000 for two or more qualifying children.
Nearly 300 national, state and local organizations have called for these provisions to be made permanent and we look forward to helping the President meet his stated commitment to “working with Congress to achieve his ultimate goal of making permanent the Child Tax Credit as well as all of the expansions he signed into law in the American Rescue Plan.”
2. Providing for Universal Pre-School: The plan would provide $200 billion in funding to states to offer free, high-quality preschool to all 3- and 4-year-olds in this country, benefitting an estimated five million children and saving the average family an estimated $13,000. The proposal would include a new minimum wage for all pre-K and Head Start teachers.
3. Expanding Child Care: The president’s proposal seeks to provide $225 billion in funding to make child care more affordable by making child care free for the lowest-income families and capping child care expenses at no more than 7% of income for other qualifying families. The plan also seeks to improve the quality of child care by investing in curriculum development, smaller classes and a better-paid workforce.
4. Increasing Support and Funding for Teachers, Early Childhood Educators and Child Care Providers: The plan “calls on Congress to invest $9 billion in American teachers, addressing shortages, improving training and supports for teachers, and boosting teacher diversity.” It would also provide funding to expand the education of and wages of early childhood educators and child care providers and educators.
5. Creating a National Paid Family and Medical Leave Program: The proposal calls for $225 billion to guarantee 12 weeks of paid parental, family and personal illness/safety leave by the 10th year of the initiative, but offers workers three days of bereavement leave beginning in the very first year.
6. Improving Child Nutrition and Reducing Child Hunger: The plan would address the problem of hunger for children in the summer, when they no longer have access to school meals, by investing more than $25 billion to extend the Pandemic-EBT Demonstrations through the summer. This extension will allow the families of the 29 million children receiving free and reduced-price meals during the school year to purchase food during summer months. The proposal also makes a number of other changes that would expand school meals to an estimated 9.3 million children by improving the Community Eligibility Provision (CEP) and expanding coverage for low-income children participating in the Supplemental Nutrition Program (SNAP), Medicaid, and Supplemental Security Income (SSI).
7. Extending Affordable Care Act Family Care Tax Credits: The proposal invests $200 billion in extending health care tax credits that lower health insurance premiums for individuals and families purchasing health care through the Affordable Care Act (ACA). An estimated 9 million people will save money on their premiums and 4 million uninsured people will gain coverage as a result. The plan also commits to making investments in “maternal health and. . .the families of veterans receiving health care services.”
8. Expanding Access to College: The president’s plan also offers two years of free community college for all Americans (including DREAMers), an additional $1,400 in Pell Grant awards to low-income students, investments to improve college retention and completion rates, and investments to subsidized tuition and programs at Historically Black Colleges and Universities (HBCUs), Tribal Colleges and Universities (TCUs), and other Hispanic, Native American-Pacific Islander, and other minority-serving institutions (MSIs).
In total, the package provides an estimated $1.8 trillion in much needed and long-sought investments and tax credits for American children and families over a 10-year period.