What's in Biden's American Families Plan

What's in Biden's American Families Plan

I tell you what senior administration officials told me

Matthew Yglesias

 Apr 28 

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Photo by Probal Rashid/LightRocket via Getty Images

Today in line with Joe Biden’s first State of the Union address¹, he’s going to be announcing the details of what his administration is calling the American Families Plan — a sweep of enhancements to the welfare state mostly focused on children and education.

The plan, as described to me last night by senior administration officials, is really not what I’d call a unitary plan at all. It’s more like a grab-bag of ideas, loosely related by by theme of helping parents and children, and all lumped together because that’s how the budget reconciliation process works. The best way to take you through it, I think, is roughly chronologically in terms of a person’s life cycle.

Paid Leave: Biden wants to establish a program that will guarantee twelve weeks of paid leave to new parents and for other purposes.² The program will replace 80 percent of the wages of low-wage workers, phasing down to a 67 percent replacement rate and then maxing out at $4,000 a month (i.e., 2/3rds of a ~$71,500 salary). In other words it’s not a means-tested program but I think in the real world you’d anticipate that high-paid workers are still bargaining for their own more generous leave packages from their employers.

Cash assistance: Biden’s American Rescue Plan included enhancements to the Child Tax Credit, the Earned Income Tax Credit, and the Child and Dependent Care Tax Credit and he wants to extend those enhancements. Those credits all work a bit differently, but the upshot is extra money for non-rich parents.

Child care subsidy: Biden will provide sliding-scale subsidies to cap family child care expenses at 7 percent of household income, if you earn less than 150% percent of your state’s median income. I have never liked this 7 percent structure that Democrats seem to love because to me it makes the total amount of subsidy you get weirdly dependent on the exact timing of your kids’ births. I’ll also say the idea of a targeted subsidy for child care doesn’t make that much sense to me as a concept. Either give families cash (knowing that in most cases it will go to child care) or else directly invest money in trying to increase the supply of quality child care programs.

Free preschool: When your kid is 3 or 4, Biden switches philosophy and instead of giving you a voucher he wants to invest $200 billion in establishing and expanding universal PreK-3 and PreK-4 programs. We have Prek-4 for everyone in DC Public Schools and PreK-3 for some families (we got into ours) and I think it’s great. Obviously “build a high-quality preschool” is a much higher degree of difficulty task than simply handing out a check so there’s plenty of room for questions here but I like it conceptually.

Lunch in the summertime: The school lunch program currently performs the vital service of providing meals to low-income children. But there is no school in the summer! Nonetheless, children still need to eat. The White House is piloting a Summer EBT program as part of Covid-related changes to the school meal program, and Biden is proposing to create a permanent version of that.

Expanded community eligibility: Verifying a child’s eligibility for free school lunch can be a bureaucratic nightmare (see Slow Boring’s previous work on administrative burdens) so there’s an Obama-era initiative called Community Eligibility whereby if enough kids in your school are already enrolled in certain means-tested welfare programs you can just give all the kids free lunch. My son attends a Community Eligibity school, so in the interests of full disclosure this is an aspect of the welfare state that benefits me directly. Biden wants to make the funding for Community Eligibility more generous so that more schools opt into it and also expand the set of schools who qualify. Obviously, my family does not “need the money” and there is some waste involved in giving my son free lunch. But I think it is great that (a) nobody falls through the cracks, and (b) it mutes class distinctions among the kids in his school. Three cheers for expanding this.

Community College and Pell Grants: Biden rejects the idea of free college, which I have mixed feelings about³ Biden opts instead for the cheaper and more popular idea of free community college. Whenever this comes up someone says “what about vocational training?” Well, community colleges are the institutions that do that. Yeah but how about apprenticeships? Again, community colleges are the institutions that do that. He also wants to increase the maximum Pell Grant allowance by $1,400. We ran out of time before I could ask the senior administration officials where they came up with that number or what it corresponds to. So I cannot explain it to you.

After you graduate from community college it’s time to get married, start having kids, and start the cycle all over again! No but wait — they also want to extend the provision of the Rescue Plan that made ACA subsidies more generous. There are honestly not many people using the ACA exchanges these days, but it is an important niche issue to the Substack community.

Some other stuff: Sprinkled hither and yon throughout the plan are things like grants to HBCUs, scholarships for college students who want to be teachers, mid-career teacher training money, and “calling on Congress to invest $2 billion to support programs that leverage teachers as leaders, such as high-quality mentorship programs for new teachers and teachers of color.” I would need to know more about what those programs are exactly to express a view.

In summary: The problem with getting embargoed briefings about things is you don’t have a lot of time to ask around about the ideas. I am very enthusiastic about cash assistance to families, the preschool stuff, and the nutrition stuff. The community college and Pell Grant ideas seem like they are probably on the right track but I’d like to know more. I want to hear from people who’ve researched family leave programs about the implications of a 2/3rds replacement rate since I’m just sitting here wondering what kind of takeup rate that actually gets you. The child care subsidies for kids under three seem mildly misguided to me, and if we’re working with a quasi-fixed pool of money here I’d cut that and put more money into some of the other stuff.

Note to subscribers: There will also be a regular article today, but I wanted to fill everyone in on this breaking story as well.

1

For reasons I never understand the first one each new president does isn’t called a State of the Union address but it’s the same damn thing.

2

The specifics they name are to “care for a seriously ill loved one, deal with a loved one's military deployment, find safety from sexual assault, stalking, or domestic violence, heal from their own serious illness, or take time to deal with the death of a loved one.“

3

This should be its own post, but long story short I think free college is the right goal but the existing free college bills in congress are actually pretty bad

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