Biden’s American Families Plan
The President is about to roll out another massive spending plan.
In a major address tonight on the eve of his 100th day in office, President Biden will reportedly introduce a massive investment in childcare, education, and health subsidies financed by higher corporate taxes. Interestingly, after weeks of debating whether these things constitute “infrastructure,” Biden will simply introduce these as a separate bill altogether.
CNN (“Here’s what’s in Biden’s $1.8 trillion American Families Plan“) lays out the proposal in some detail.
The massive package — which Biden is calling the American Families Plan — is the second half of his effort to revitalize the nation and ensure a more equitable recovery. The proposal would also extend or make permanent enhancements to several key tax credits that were contained in the Democrats’ $1.9 trillion rescue bill, which Biden signed into law last month.
The President intends to finance the latest package by hiking taxes on the rich, saying he wants to reward work, not wealth. His new proposed measures would raise about $1.5 trillion over a decade.
The families plan pairs with Biden’s infrastructure proposal, known as the American Jobs Plan, which calls for improving the nation’s roads, bridges, broadband, railways and schools. It would also provide a boost to manufacturing and funnel $400 billion into augmenting home- and community-based care for the elderly and disabled and raising the wages of care workers. It would be paid for by hiking corporate taxes.
The tax increases contained in the two economic recovery packages would fully pay for the investments over the next 15 years, according to the White House.
While Biden’s Covid relief plan moved swiftly through Congress, his ambitious infrastructure and families proposals are hitting more resistance. He has already irked some moderate Democrats with the size of the packages and the tax increases, while irritating progressive lawmakers by not including measures important to them, such as reducing prescription drug prices. Already, a powerful House Democrat has released his own alternate proposal for families.
It’s unclear whether lawmakers will consider Biden’s two plans together or separately — or whether Democrats will try to push it through without Republican support, as they did the rescue bill.
Legislative politics aside, the broad strokes of the bill will almost certainly be popular. The report lays them out in some modest detail. Here are some highlights:
Helping families afford child care
Biden’s proposal calls for having low- and middle-income families pay no more than 7% of their income on child care for kids younger than age 5. Parents earning up to 1.5 times the median income in their state would qualify.
The President also wants to invest more in the child care workforce to bring their wages up to $15 an hour, from the typical $12.24 hourly rate they earned in 2020.
These proposals are in direct conflict, in that raising the pay of childcare workers will almost by definition increase the number of people paying over 7% on childcare. But, if there’s going to be a $15 minimum wage, anyway, it’s not obvious why a separate measure is needed.
The age 5 cutoff is odd, in that a lot of kids aren’t in school yet at 6. And, even then, before- and after-school care (which requires transportation) can be pretty expensive. Presumably, this is a half-a-loaf proposal in that regard.
Making community college free
Biden is proposing a $109 billion plan to make two years of community college free.
The federal government would cover about 75% of the average tuition cost in each state when the program is fully implemented, with states picking up the rest, another senior administration official said. States would also be expected to maintain their current contributions to their higher education systems.
While I understand the appeal, this seems an odd way to go about it. First, as with the childcare initiative, this creates perverse incentives. If the Feds are going to cover 75% of tuition, it’s a dead-lock certainty that tuition costs will skyrocket. Second, why community college and not simply the first two years of college?
My stepson is finishing up his two years at the local, quite good, community college this year, so we’re unlikely to benefit. But his younger sister is about to start at the local, quite good, university (George Mason) in the fall. Why are we punishing her for going to university rather than community college? Presumably, a lot of people will shift their strategies and do that in the future. And maybe that’s a cheaper route. But it radically transforms the “college” experience, as the bonding and networking really happens in the first year or two. Transferring in to a university as a junior just isn’t the same.
In addition to his community college measure, Biden would create a $39 billion program that provides two years of subsidized tuition for students from families earning less than $125,000 who are enrolled in four-year historically Black colleges and universities or other minority-serving institutions.
This strikes me as pure pandering. While I would prefer to target low-income students regardless of race, there’s certainly an argument for additional subsidies to Black families to remedy structural inequality. But why shunt them to HBCUs, most of which are frankly terrible (for a variety of reasons) rather than allowing them to go to the university of their choice?
Enhancing Pell Grants
The President would provide up to approximately $1,400 in additional assistance to low-income students by increasing the Pell Grant award.
Nearly 7 million students, including many people of color, rely on Pell Grants, but their value has not kept up with the rising cost of college.
Students can receive up to $6,495 for the 2021-22 school year. Biden has promised to double the maximum award.
My preference would be to cancel all of the previously-discussed measures and instead invest way more in the Pell Grant program than this. While I can see the argument for vastly more subsidy for higher education, period, the key priority should be clearing the obstacles to children from poor families. I’d rather they all go for free than that my kids and stepkids ( I’ve got four that are still in the pipeline and a fifth who will almost certainly go to graduate school in the near future) get subsidies.
Providing paid family and medical leave
A limited federal paid family and sick leave measure was included as part of the major pandemic rescue package passed by Congress in March 2020. It provided up to two weeks of paid sick days for workers who were ill or quarantined, as well as an additional 10 weeks of paid family leave if they needed to care for a child whose school or daycare was closed due to the pandemic. The requirement expired in December, though the federal government will continue to subsidize employers who choose to offer the paid leave through September.
The American Families Plan would provide workers with a total of 12 weeks of guaranteed paid parental, family and personal illness/safe leave by the 10th year of the program, according to a White House fact sheet. The partial wage replacement would apply to individuals who wanted “to take time to bond with a new child, care for a seriously ill loved one, deal with a loved one’s military deployment, find safety from sexual assault, stalking or domestic violence, heal from their own serious illness or take time to deal with the death of a loved one.”
The plan would also ensure three days of bereavement leave annually starting in the first year of the plan’s rollout.
Workers would receive up to $4,000 a month through the national leave program, with a minimum of two-thirds of their wages replaced. The White House estimates the program will cost $225 billion over 10 years.
About 30 million private sector workers, many of whom are low-income earners and part-time, did not have any paid sick leave before the pandemic.
Universal paid leave already has support among Democrats in Congress, who earlier this week introduced a plan that would provide up to 12 weeks of universal paid medical and family leave for full- and part-time workers, including those who are self-employed.
Every job I’ve ever had as an adult has come with paid annual and sick leave; few have had separate bereavement leave. It’s interesting that the Biden approach to this is a massive federal welfare program rather that labor regulation reform. It makes some sense to subsidize struggling mom-and-pops who can’t afford to pay workers for not working but it’s weird to shift these costs to the taxpayer for highly profitable corporations. And, indeed, if this becomes law, why wouldn’t companies who provide these benefits out of their profit margin stop doing so and shift that burden to us?
Investing $200 billion in universal preschool
Biden is calling for the federal government to invest $200 billion in universal preschool for all 3- and 4-year-olds through a national partnership with states. The administration estimates it would benefit 5 million children and save the average family $13,000 when fully implemented.
The program would be accessible to families of all income levels, according to the White House. States would be required to foot about 50% of the cost when the measure is fully up and running. If a state were to opt out, the federal government would work with localities to implement the program, the second senior administration official said.
I sent my two to preschool and support the idea of making that a universal practice. If we’re going to do that, though, I’m not sure why we wouldn’t simply piggyback it on to the existing school system rather than making it a separate thing. If it’s truly universal, we’re just starting school at age 3 rather than age 5 or 6.
Recruiting more teachers and strengthening the educator workforce
The American Families Plan aims to address teacher shortages and meet an anticipated increase in demand for universal pre-K educators by increasing funding for educator scholarships and specialty training, as well as raising wages for certain groups in federal programs.
The plan calls on Congress to double its scholarships for prospective teachers from $4,000 to $8,000 per year and expand the program to early childhood educators. The plan would invest $2.8 billion in yearlong paid teacher residency programs, $900 million in special education teacher development and $400 million in teacher preparation programs at historically Black colleges and universities, tribal colleges and universities and minority serving institutions.
The plan would also allocate $1.6 billion to help current teachers earn credentials for in-demand specialties, such as special education and bilingual education. An additional $2 billion in the plan would go toward educator leadership programs, like mentorships for new teachers and teachers of color.
Even though my wife has three degrees in Education, I’m generally skeptical of the Colleges of Education and the way we train future teachers. Regardless, it’s not at all obvious to me why federalizing the process is necessary or helpful. Or what this does to improve the overall caliber of people teaching at the primary and secondary level.
The plan has a variety of other subsidies. And the various tax increases designed to pay for these programs and, more generally, redistribute wealth, are worthy of a post or posts in and of themselves.