President Joe Biden recently unveiled a significantly diluted version of his original economic plan to rebuild the American middle class, before departing for his second major foreign trip as president. “I know we have a historic economic framework,” the President stated, as he went on to announce the key advantages of his program. The $1.75 trillion plan centers on care for families, combating climate change, developing better access to health care, lowering costs for the middle class, and tax reforms. However, a big part of the economic framework is also investing in children, families, and caregiving.
President Joe Biden embarked on his second trip to Europe while both his infrastructure bill and his larger economic framework are still hanging in the balance on Capitol Hill. Progressives have previously said they will not vote on the infrastructure bill unless the economic plan moves in tandem, suggesting that a framework was insufficient to win their votes. However, after the President presented his new economic framework, the White House went on to announce that it already has the support of Democrats in the Senate and House of Representatives. It remains to be seen if these proposals can indeed reshape the future of America, and its working class.
About the new economic framework
The new proposal includes several compromises, and that means many of Biden’s initial points are actually missing, including paid family and medical leave, prescription drug pricing provisions, free community college, and vision or dental Medicaid coverage. However, the current plan includes measures that may go on to create new jobs, such as key points that may lower price pressures, multiple commitments to clean energy, and combating climate change. Moreover, it also puts an emphasis on schooling and childcare.
The framework includes a new way of extending access to free high-quality pre-K for more than 6 million children in the US. However, access to high-quality preschools is not the only long-term commitment included in the plan, as affordable high-quality childcare is yet another key point. The new economic framework plans to lower childcare costs for American families to less than 7% of their income, for those making up to 250% of state median income. This new feature may help states to extend access to about 20 million American children. Both universal preschool and affordable child care are long-term programs and include funding for six years.
The need for solutions
According to President Joe Biden, the greatest economic engine is actually the hard work and the ingenuity of the American people. However, the President suggests that the economy has favored the higher class for some time now, while working families in the US are currently experiencing multiple pressures. The new economic framework can help numerous American families with more than half of their current spending on childcare, while also providing them with two years of free high-quality preschool for their 3- and 4-year olds. Furthermore, the plan also includes a way to give more than 35 million American families a major tax cut.
The enhanced child tax credit is another key point in the new economic framework. As it extends the current expanded Child Tax Credit for one year. It provides more than 35 million American households, earning up to $150,000 per year, with a way to receive the benefits for at least one more year. Furthermore, by making refundability of the Child Tax Credit permanent, the Biden administration will make sure that children in the poorest families in the US will get access to the money. According to a ParentsTogether Action report, a single child tax credit payment helped to lower financial anxiety for 56% of American families, while 90% of parents receiving the funds said they were helpful.
Investing in the future
Different reports show that American parents are now relying on these monthly payments for financial security for themselves and their families. With the COVID-19 pandemic still spreading across the world, it comes as no surprise that middle-class families need better support to cope with financial difficulties, while also providing their children with access to high-quality education and care. The new economic framework provided all that, and more, but it does it at a cost of $1.75 trillion. Only the future will tell if asking the largest corporations and highest income Americans to pay more in order to finance the plan is the best solution.
