The Biden administration’s American Family Plan – what it means for afterschool

In late April, President Joe Biden released the American Families Plan, the second part of an overall infrastructure proposal and a complementary piece to the American Jobs Plan. Congress is now holding bipartisan conversations to identify infrastructure priorities. The American Families Plan is focused on investing in children and families, helping them to cover basic expenses, lowering health insurance premiums, and reducing child poverty. There are a number of provisions in the plan that could support the afterschool and summer learning field. A comprehensive summary of the American Families Plan details the far reaching proposal.

Among the many proposal, the following could impact the families and children served by afterschool and summer learning providers:

• Permanently increase tax credits to support families with child care needs. To help families afford child care, President Biden is calling on Congress to make permanent the temporary Child and Dependent Care Tax Credit (CDCTC) expansion enacted in the American Rescue Plan. Families will receive a tax credit for as much as half of their spending on qualified child care for children under age 13, up to a total of $4,000 for one child or $8,000 for two or more children. A 50 percent reimbursement will be available to families making less than $125,000 a year, while families making between $125,000 and $400,000 will receive a partial credit with benefits at least as generous as those they receive today. The credit can be used for expenses ranging from full-time care to afterschool programs and summer learning programs fees.
• Child Tax Credit – Proposes extending the new American Rescue Plan’s child tax credit provision through tax year 2025 and makes it permanently fully refundable. This new tax credit increased from $2k to $3k per child for children six years and above, and $3,600 for children under six. It also makes 17-year-olds eligible. 
• Earned Income Tax Credit – Proposes making the American Rescue Plan’s earned income tax credit (EITC) expansion for childless workers permanent, which tripled EITC for childless workers.
• Universal Pre-School – Proposes free universal pre-school for all 3 and 4-year-olds, prioritizing high-need areas, and enabling families to choose the settings that work best for them. It focuses on quality, low student-to-teacher ratios, supportive classrooms, inclusivity, and more.
• Two years of free community college to all Americans, including DREAMers. President Biden’s $109 billion plan will ensure that first-time students and workers wanting to reskill can enroll in a community college to earn a degree or credential for free. Students can use the benefit over three years and, if circumstances warrant, up to four years, recognizing that many students’ lives and other responsibilities can make full-time enrollment difficult. If all states, territories, and Tribes participate, about 5.5 million students would pay $0 in tuition and fees.
• Pell Grants – Proposes increasing Pell Grants by an additional $1,400 for low-income college students.
• Comprehensive Paid Family and Medical Leave – Proposes a new program to ensure workers receive partial wage replacement for parental leave, caring for ill relatives, military deployments, finding safety from sexual assault/domestic violence, and other circumstances. It guarantees 12 weeks paid leave by year 10 of the program.
• Expand summer EBT to all eligible children nationwide. The American Families Plan builds on the American Rescue Plan’s support for Summer Pandemic-EBT by investing more than $25 billion to make the successful program permanent and available to all 29 million children receiving free and reduced-price meals.
• Expand school meal programs. The Community Eligibility Provision (CEP) allows high-poverty schools to provide meals free of charge to all of their students. It is currently available to individual schools, groups of schools within a district, or an entire district with at least 40 percent of students participating in the Supplemental Nutrition Assistance Program (SNAP). The President’s plan will fund $17 billion to expand free meals for children in the highest poverty districts (those with at least 40 percent of students participating in SNAP) by reimbursing a higher percentage of meals at the free reimbursement rate through CEP. This proposal will provide free meals to an additional 9.3 million children, with about 70 percent in elementary schools.

The package would be funded by increasing the marginal income tax rate for the top one percent of American income earners to 39.6% from 37% and increasing capital gains and dividend tax rates for those earning more than $1 million per year. Congress is expected to take up both the American Families Plan and American Jobs Plan this summer as part of a legislative package investing in infrastructure.