Ten key provisions in the American Families Plan for people with low incomes


May 14, 2021

Editor’s note: Shiva Sethi is a Legislative Assistant on the Legislative Affairs Team for the Center on Law and Social Policy (CLASP). This blog entry is cross-posted with permission.

By Shiva Sethi
On April 28, President Biden announced his latest legislative proposal, The American Families Plan (AFP). It’s a bold and transformative effort to help the country recover from the coronavirus and recession. The AFP would target resources to many of those who need them most: people with low incomes, communities of color, and children who have been disproportionately harmed by the coronavirus, recession, and years of underinvestment.

The plan would directly impact people with low incomes in many ways; here’s a summary of our top-10 provisions:

1) The AFP would create a national, comprehensive paid family and medical leave program that guarantees 12 weeks of paid leave per worker, so no one has to choose between their pay and caring for their health or that of their loved ones. Currently 93 percent of workers earning low wages don’t have access to paid leave. If enacted, this provision will particularly benefit workers who are women, parents, and from Black, Latinx, and Native communities.

2) The plan would invest $225 billion in child care by, among other things, guaranteeing that families with moderate or low incomes don’t pay more than 7 percent of their income on care for children under 3.

3) It would also invest $200 billion in universal preschool so all 3- and 4-year-olds have access to high-quality pre-kindergarten. This investment would bolster an essential but underpaid workforce, which is almost exclusively women—and disproportionately women of color at that, while supporting families’ economic security and our children’s futures.

4) The groundbreaking improvements to make the Child Tax Credit (CTC) available to the lowest income families, enacted in previous COVID-19 legislation – and projected to cut child poverty in half – would be extended by five years until 2025. Families with the lowest incomes will no longer be excluded from the credit, and they’ll receive up to $3,600 per year, per child delivered in regular installments.

5) The improvements to the Earned Income Tax Credit (EITC) in the American Rescue Plan, which increased the maximum credit for approximately 17 million workers without dependent children and young adults with low incomes from $540 to $1,500 annually, would be made permanent. This would particularly benefit young people who have disproportionately suffered from this recession.

6) All young people will have access to two years of free postsecondary education at community colleges. In addition, Historically Black Colleges and Universities, Tribal Colleges and Universities, and Minority Serving Institutions, would receive increased funding. These institutions are engines for economic mobility for entire communities.

7) The ARP addresses nutrition assistance in several ways. The Summer-EBT nutrition assistance program, which helps families with low incomes purchase food during the summer, would be made permanent – supporting an estimated 29 million children. The plan would also eliminate the current lifetime ban on receiving SNAP (the Supplemental Nutrition Assistance Program), formerly known as food stamps, for people who have been convicted of a drug-related felony. These changes will have positive, multigenerational effects on food security.

8) DREAMers would gain access to two free years of community college and Pell Grants to help them pay for postsecondary education. This would help thousands of immigrant youth access higher education, removing barriers to their full workforce participation.

9) Since the onset of the pandemic, state unemployment insurance (UI) systems have struggled to respond to staggeringly high levels of unemployment. This plan calls on Congress to modernize UI systems to ensure they are effective and responsive to economic conditions.

10) Finally, the AFP will invest $200 billion to improve access to affordable health insurance and health care. The proposal would increase funding for maternal health and permanently reduce insurance premiums – allowing 4 million uninsured people to gain coverage.

CLASP has worked on these issue areas for years, and we’re excited that the White House is prioritizing the needs of people with low incomes. Our country’s most important infrastructure has always been our people. This plan invests in people and the caregivers and care systems that support them. We outlined our full list of priorities for recovery legislation in Securing an Equitable Recovery.

The visionary American Families Plan, if enacted, would transform our nation by making it fairer and more equitable. However, the AFP does not sufficiently address several key CLASP priorities for recovery including mental health, subsidized jobs, and policies that directly support the needs of youth and young adults. We look forward to working with the Biden-Harris Administration, members of Congress, and other allies to build back a better and fairer country.