WASHINGTON – The Biden administration on Wednesday detailed a collection of $ 1.8 trillion in spending increases and tax cuts aimed at expanding access to education, lowering the cost of child care and to support women in the labor market, financed by additional taxes on high incomes.
The U.S. Plan for Families, as the White House calls it, follows the $ 2.3 trillion infrastructure package President Biden introduced last month, bringing his two-part economic package to one. just over $ 4 trillion. He will present the details at a joint session of Congress on Wednesday evening.
The proposal includes $ 1 trillion in new spending and $ 800 billion in tax credits, much of which is aimed at expanding access to education and child care. The program includes funding for universal preschool, a federal paid vacation program, efforts to make child care more affordable, a free community college for all, support for college students that historically serve non-white communities, increased grants under the Affordable Care Act; and an extension of new federal efforts to fight poverty.
Administration officials have touted the plan as an investment in an inclusive economy that would help millions of Americans gain the skills and work flexibility they need to create middle-class lifestyles. They cited research on the benefits of government spending in helping young children learn. In a 15-page backgrounder, they said the package would help close the racial and gender gap in opportunity across the economy.
Many provisions, such as tax credits to help families pay for child care and the historic expansion of a child poverty tax credit, build on the government’s measures. $ 1.9 trillion economic bailout that Mr. Biden enacted last month. The package would make many of these temporary measures permanent.
But the plan also includes a maze of complicated formulas for who would benefit from certain provisions – and how much of the tab state governments should take.
The package could face even more challenges than the US jobs plan, Mr Biden’s physical infrastructure proposal, did in Congress. The president has repeatedly said he hopes to move his agenda forward with bipartisan support. But his administration remains far from reaching a consensus with Republican negotiators in the Senate.
Republicans have expressed much less interest in additional spending on education, child care and paid vacation than they have in building roads and bridges. They were also angered at the tax increases proposed by Mr Biden, including those that will help pay for his latest package.
The President is proposing an increase in the marginal income tax rate for the richest 1% in the United States, to 39.6% from 37%. It would increase capital gains and dividend tax rates for those who earn more than $ 1 million a year. And it would eliminate a provision in the tax code that reduces capital gains on certain inherited assets, like vacation homes, which largely benefit the wealthy.
Mr Biden is also reportedly investing $ 80 billion in personnel and technology upgrades for the IRS, hoping to unlock $ 700 billion in additional income from high incomes, wealthy people and companies that escape. to taxes.
Republicans and conservative activists have criticized all of these measures. Administration officials told reporters the president would be willing to fund his plan’s spending and tax credits in other ways, essentially challenging Republicans to name their own compensations, like Mr Biden did so with its physical infrastructure proposal.
Yet many of the details of his new proposal poll voters from all political backgrounds. Much of the package could win the support of the entire Democratic caucus in Congress, which is expected to come together to push all or part of the plan through the fast-track process known as budget reconciliation, which bypasses filibuster. of the Senate.
Expanded access to government-subsidized preschool and community facilities can have wide appeal.
Workers who only have a high school diploma are often stuck in low-paying jobs, two-thirds of mothers with young children are employed, and therefore need reliable child care. the high cost of quality daycare and pre-K puts these services out of reach for many families, who can rely on informal networks of parents and neighbors who have not received training in early education.
Expanding access to pre-K has been particularly popular over the past decade in states and cities, including some with Republican governors. A large body of research shows that the achievement gaps between poor children and middle-class children appear in the early years of childhood and are present on the first day of kindergarten. Administration officials argue that free, quality early childhood education can both help cash-strapped parents and develop students’ skills in ways that help them become more productive workers.
Still, there are major disagreements over the generosity of any pre-K expansion. President Barack Obama’s administration has generally favored a centrist approach in which the new seats are geared towards low-income families.
Mr Biden’s plan differs in that he calls for a universal preschool for all 3- and 4-year-olds, including those from affluent families. It’s the same approach pioneered in recent years by municipal programs in New York and Washington, which have rapidly grown to serve a wide range of families, but some evidence that they reproduced the segregation and inequalities of the larger K-12 education system.
Bruce Fuller, professor of education at the University of California at Berkeley, criticized the one-size-fits-all approach, preferring more targeted programs instead. He questioned whether states would do their part to fund the expansion and said the target of paying all early childhood workers $ 15 an hour was too modest to improve overall quality and stability. workforce.
“How governors weigh these competing priorities, ethically and politically, remains an open question,” he said.
The investment proposed by Washington comes at a precarious time. Preschool enrollment decreased by almost 25 percent over the past year, in large part because of the coronavirus pandemic. In December, about half of 4-year-olds and 40% of 3-year-olds were attending pre-kindergarten classes, including distance learning programs. And only 13 percent of poor children were receiving in-person preschool education in December, according to the National Early Education Research Institute.
Unlike the preschool proposal, the child care plan is not universal. It would offer grants to families earning up to 1.5 times their state’s median income, which could be in the low six figures in some places. It would also maintain the tax credits approved in the pandemic bill this year, which provide benefits to people earning up to $ 400,000 per year.
As with Mr. Biden’s previous policy proposals, the US Family Plan offers something to many traditional Democratic Party constituencies. The administration is closely linked to teachers’ unions and, although many early childhood educators are not unionized, the proposal also calls for investments in the training, training and remuneration of kindergarten to kindergarten teachers. Grade 12, which are all union priorities. One of the goals is to bring more teachers of color into a public education system where the majority of students are not white.
The expansion of the free community college would apply to all students, regardless of income. States should help achieve the goal of universal access, senior administration officials said on Tuesday. Mr Biden would also expand Pell Grants for low-income students and subsidize two years of tuition at historically black colleges and universities, as well as institutions serving members of Native American tribes and other minority groups.
Mr Fuller said he expected the community college’s proposal to effectively target spending by the most needy students. About one-third of all undergraduates attend two-year public colleges, which serve a disproportionate number of students from low-income families.
The paid vacation program will be gradually implemented. The administration’s information sheet indicates that it will guarantee 12 weeks of “parental, family and personal sickness / safety leave” in its 10th year of existence. Workers on leave will earn up to $ 4,000 a month, with as little as two-thirds or up to 80 percent of their earnings replaced, depending on what they earn.
Other provisions include late concessions to key democratic constituencies. Administration officials cut health care credits last week, but added them back under pressure from President Nancy Pelosi of California and others. They resisted pressure from House and Senate Democrats to make permanent an expanded child tax credit created by the Pandemic Relief Bill, extending it until 2025. But the plan would make it permanent. permanent an aspect of extended credit, which allows parents with little or no income to reap its benefits regardless of their salary.