Last Wednesday President Biden gave a speech to a joint session of Congress in which he outlined the “The American Jobs Plan,” the second phase of his infrastructure package. A significant part of this $2.3 trillion infrastructure package is the approximately $224 billion allocated over ten years to help low and middle income families pay for child care.
In his speech, Biden said that this government support would help parents balance work and child care, bolstering the workforce. He noted that two million women left the workforce over the course of the COVID-19 pandemic, often because child care was too costly and inaccessible. In fact, child care is the biggest expense for families with two children, according to Child Care Aware of America. It also accounts for 30% of the income of families in poverty, and 18% for families earning slightly above the poverty line. Thus, subsidizing child care could increase workforce participation and allow families to stimulate the economy by diverting their spending away from expensive child care.
Though the federal government currently funds child care for low income families, the Center on Budget and Policy Priorities estimates that only 1/15 of qualified families are covered by the currently underfunded plans. Biden seeks to initiate more robust government subsidies for child care, and over the course of ten years hopes to decrease the amount low and middle class families pay for child care to 7%. This adjusts for differences in median household income by state but not cost of living, nor the fact that median household income and cost of living varies greatly by communities within each state.
This plan also funds increased wages for child care workers, who earn less than 98% of all U.S. occupations. To achieve this, he’d increase the minimum wage for child care workers up to $15, though cost of living varies greatly by location. The plan also outlines funding for child care workers to earn as much as local kindergarten if they share equal credentials.
To pay for the $224 billion, Biden plans massive tax increases on the wealthy and corporations. Namely, he plans to “raise the top individual income tax rate from 37% to 39.6%, essentially double the capital gains tax rate for households earning more than $1 million per year and increase the corporate tax rate from 21% to 28%.”
Republicans politicians have responded to Biden’s plan by saying that they also support increasing child care support by the government, but they oppose Biden’s huge tax increases. This is unsurprising, as child care offers a way to stimulate the economy and also mirrors entitlements that many Americans support, yet Americans also lament increased taxes. Republicans also take issue with the fact that this plan tries to lump large social programs under the infrastructure proposal, for which they said earlier that they would be flexible with Democratic lawmakers on how much to spend. They’d rather such child care funds come about through the normal appropriations process.
However, some disagree with designs of the plan itself. Mitt Romney, for instance, said “I would rather give the money that we’re currently providing to families, give it to them in a monthly check, and allow them to decide how to spend their money to help their child.. Building a national child care enterprise of some kind, run by the federal government, is not my idea of the best way to give families the options that they would like to have.”
Questions to consider:
Which method appears best to support these families and our overall economy: putting money directly into families pockets like Mitt Romney suggests, or subsidizing child care costs?
Is it a problem that Biden plans to achieve this costly proposal as part of the seemingly unrelated infrastructure package (similar to how the Commerce Clause has wide-reaching uses)?
Do you agree with parts of the plan (subsidizes, specific wage increases) and paying for it by taxes? Can Democrats get Republicans on board with this strategy?
6 comments:
I can understand the republican party wants to keep the US away from being a socialist country. I agree that more welfare would lead to a socialist state. I feel that economic benefits out weight the socialist state. I think that more people in the economy will raise the GDP and help families.
I think subsidizing child care cost would be the better plan. I don't think putting the money directly into the families pockets would be much of a help. How are they to know what will be done with the money. I think that Biden will do what we wants, but through checks and balances our government will be able to stop him from being too out of bounds with his actions. Taxes are never a favorable option when it comes to where is the money coming from. I think the republicans won't want them and the democrats would want the 1 percent to pay for it.
I am always skeptical of social welfare programs because they tend to waste a lot of money. For example, in California's efforts to pay for unemployment benefits, they were estimated to have paid billions in fraudulent money to foreigners. I'm concerned that mismanagement of social welfare programs could easily lead to a similar scenario where taxpayers are overpaying for programs. Overall, however, I agree with the basis for the plans, including the different groups that would be supported and the minimum wage increase. That being said, I think this should be a value more determined by average cost of living rather than a flat $15 an hour, because that may be much more challenging to pay areas with lower costs of living, and harder to live off of in areas with higher costs of living. One thing I am kind of disappointed about is that I feel increased welfare programs are making the US more of a refugee sanctuary, which is okay overall, but the more people we have to take care of, the more money we have to spend. I know people applying to college this year who have been in the US for most of their lives who don't get college grant/scholarship benefits because they are not naturalized citizens, but there are many financial aid opportunities for undocumented immigrants, which I think is unfair to the people who properly followed the system. I don't think this is actually a large portion of our overall economic expenditure, but it's more of a moral issue where I think, as much as we should try to help people as a society, equity also matters. I think our welfare system is inequitable and requires improvement before we continue to expand something that is not ideal. I am not too concerned with the tax increase simply because Donald Trump said he was glad he lowered corporate taxes because now they would only be raised to 28% instead of a much higher number. I think this means a lot of corporations concerned with tax rates will not make the decision to leave the US because of taxes, but then again I don't think I have the expertise to make that assumption. The increase in taxes for the 1% is also pretty small, so I don't think it will scare anybody out of the country, but I've always wondered if this 1% number is too generalized. Maybe there should be an additional tax bracket for the top 0.5%, or 0.1% who have significantly more money than even those at the bottom of the 1% tax bracket. Overall, the plan is good, but I'm worried about some details and its execution.
The corporate tax increase might be an issue because our economy is still recovering and diverting capital away from businesses would not help. However, I still believe that the American Families Plan is worth the cost of increased taxes. I particularly agree with the part that increases wages for child care workers as they make less than 98% of all US occupations like Danny mentioned. $15 would be a substantial increase to their average hourly wage of $12.24 as of 2020, though an improvement could be to adjust the wages for high costs of living. Overall, I agree with this plan. Fears about wasteful spending are understandable, but I believe that it is a good principle to increase how much we invest into future generations.
I think the better long-term solution to solving the childcare problem would be to subsidize childcare in general so that families can support their children self-sufficiently without the government needing to give them the money every few years, as it is known for botching grants to citizens constantly (see: the COVID relief checks barely being enough to keep most people afloat for one month, yet it was supposed to last for six).
Additionally, I also believe this plan is relevant to an infrastructure plan - as Biden suggests, many parents have issues with balancing taking care of their children with going to work, especially coming out of a pandemic where many people took care of their children by themselves for a full year. It would be important to being
Lastly, I agree with pretty much all major parts of this plan; the point of this is to help lower-income americans, and the funding for it has to come from somewhere, so why shouldn't we have the government tax the highest-income Americans to get that funding? And I also think that reasoning for the plan is why most Republicans won't get on board with it at all; one of the major beliefs of the Republican party is lower taxes, so higher taxes for anyone being a major part of the agenda for a plan won't be taken with a grain of salt. It's one of the major unfortunate flaws in a plan like this; if you can't get the Republican half of Congress to vote on a bill, it likely won't pass. It might be possible if Democrats manage to convince the Republicans of the long-term and immediate economic benefits of such an endeavor but it definitely will be no easy feat, and most will likely just dismiss the notion out of hand.
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