President Biden is expected to unveil his next major initiative today. Called the American Families Plan, the proposal is a massive $1.8 trillion investment in education, childcare, and paid family leave, reports CNN. The plan also extends or makes permanent existing tax credits designed to help families, and which were originally included in Biden’s $1.9 trillion coronavirus relief package last month.
Overall, Biden’s $1.8 trillion proposal breaks down to about $1 trillion in investments with the $800 billion remaining going towards the extended or permanent tax credits. Here’s what’s included in Biden’s historic $1.8 trillion American Family Plan:
- Low- and middle-income families with children below the age of 5 would pay no more than 7% of their income for childcare.
Those working in the childcare field would see their wages increase to a minimum of $15 per hour–up from the average $12.24 hourly rate today.
- $109 billion would go to making two years of community college free. The federal government would pick up 75% of the tab, with states picking up the rest. If all states participate, the White House says that about 5.5 million students would pay nothing in tuition and fees.
- $39 billion would go to subsidizing two years of tuition for families making less than $125,000 who have members enrolled in historically Black four-year universities and colleges.
- The Pell Grant award, a federal subsidy grant to help students pay for college, would increase by approximately $1,400 for low-income students.
- Guaranteed paid parental, family, and medical leave. Workers would receive up to $4,000 a month through a national program if they needed to take leave from work for family or health reasons. This would include a guarantee that at least two-thirds of a person’s income would be paid should they need to take leave. The guaranteed leave would cover up to 12 weeks by the tenth year of the program. This would include guaranteed paid leave for full and part-time workers as well as the self-employed.
- $200 billion would be used to publicly fund universal preschool for all 3- and 4-year-olds.
- An expansion of the child tax credit until 2025. The credit was first introduced in the March 2021 coronavirus relief bill. Under the American Family Plan, the $3,600 per child credit for families with children under the age of 6 and the $3,000 per child credit for families with children between 6-17 would be extended another four years.
- Extending Affordable Care act subsidies. The plan would ensure that Americans who get their healthcare through the ACA would not pay any more than 8.5% of their total income towards coverage.
- Making the tax credits for spending on qualified childcare permanent. That means families would continue to be able to claim tax credits on $4,000 of qualified childcare if they have one child, or tax credits on $8,000 of qualified childcare if they have two or more children.
- Permanently expand the maximum earned income tax credit for workers without children and reduce the age to claim the credit from 25 to 19.
How does Biden plan to pay for the American Family Plan? Simple: he going to tax the rich more on their income and capital gains and end tax loopholes for hedge fund partners and real estate investors.