Students would get four extra years of paid education under the White House's new $1.8 trillion spending and tax plan, which would also provide paid family and medical leave for US workers. The "American Families Plan" may irk not only Republicans, but progressive Democrats, too. Here's what in it and what's not:
- Child benefit extended: The enhanced child tax credit of at least $250 monthly per child, approved through the $1.9 trillion relief plan in March, is only temporarily extended through 2025, though President Biden has said it should be permanent, reports the Washington Post.
- Free prekindergarten: All children would be entitled to free prekindergarten at ages 3 and 4 as part of a program the White House expects to cost $200 million over 10 years. Biden has promised to pay employees at least $15 per hour, up from the "typical $12.24 hourly rate" in 2020, per CNN.
- Free community college: Two-year community colleges are also to be made tuition-free under a $109 billion program. The White House also plans to subsidize two-year tuition for students from families earning less than $125,000 enrolled at minority-serving institutions, including historically Black colleges. Progressives had been calling for free four-year tuition at public colleges and a large-scale canceling of student debt.
- States would opt in: Individual states choosing to participate would be expected to pay 10% of the costs for the pre-K program initially, but eventually 50%. The federal government plans to cover 75% of community college education costs.
- Increasing the Pell Grant: To assist low-income students at four-year institutions, which would "become comparatively more expensive," per the Post, the White House is proposing a $1,400 boost in the maximum Pell Grant award. That represents a 20% increase, though Biden had pledged a 100% increase.
- Paid family leave: Some $225 billion would be used to kickstart a national paid family and medical leave program, per the AP, though C. Nicole Mason of the Institute for Women's Policy Research says twice as much funding would be needed to provide 12 weeks of paid leave for new parents. Another $200 billion would go to permanently reduce health insurance premiums for those covered by the Affordable Care Act.
- What's missing: There is no measure about reducing prescription drug prices, which was requested by House Speaker Nancy Pelosi and progressive lawmakers, per CNN and the Post. Nor is there any measure to lower the Medicare enrollment age, which Biden has promised to do. There is also no estate tax increase.
- How to pay: The White House expects to pay for this by raising the top tax rate from 37% to 39.6% and nearly doubling the tax rate on capital gains for Americans earning more than $1 million per year from 20% to 39.6%. It further expects to raise $700 billion over the decade by increasing IRS enforcement.
- Republican opposition: The capital gains tax rate increase is among the measures "likely to face resistance on Capitol Hill," per the Post. Republicans, upset to see some of former President Trump's 2017 tax cut reversed, are generally concerned about big spending, especially after the White House unveiled a $2.3 trillion jobs and infrastructure proposal.
- Making his case: Biden will try to calm fears while pitching what analysts say is "the most far-reaching reform of the US social safety net since the era of President Lyndon B Johnson in the 1960s" in his first address to Congress on Wednesday, per the BBC. Republican Sen. Tim Scott will then issue a rebuttal. "I look forward to … sharing Republicans' optimistic vision for expanding opportunity and empowering working families," he says.
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