President Joe Biden is calling for another $1.8 trillion in federal spending for his new American Families Plan, along with tax increases to help pay for it.
Coupled with the $2.3 trillion infrastructure spending plan Biden proposed earlier this month, Biden is seeking to spend $4.1 trillion on top of the $1.9 trillion that was in the COVID relief bill.
The American Families Plan, unveiled Wednesday, includes two years of government-subsidized preschool for many families and two years of free community college for everybody, including many illegal immigrants.
The plan is supposed to be offset by tax increases that the administration says will focus on the richest Americans, along with revenue from the corporate tax hikes Biden proposed earlier this month, according to Axios.
Biden wants to continue the expanded child tax credit that was part of the COVID relief bill through 2025 and make permanent a tax credit for health insurance purchased through Obamacare exchanges.
Under his plan, Americans who make more than $400,000 would have their tax rate increased from 37 percent to 39.6 percent. Income from capital gains would be taxed at a higher rate, and the Internal Revenue Service would be beefed up to collect more of what is owed but not paid.
In its initial review of the plan, The New York Times noted it “includes a maze of complicated formulas for who would benefit from certain provisions — and how much of the tab state governments would need to pick up.”
For example, it reported that Biden expects states to chip in on the plan for free community college.
According to CNN, the federal share of free community college would amount to “75 percent of the average tuition cost in each state when the program is fully implemented.”
States that now fund some of the costs of community colleges would be expected to continue to pick up the share they currently pay.
The president’s version of “free college” includes an increase in Pell Grants, given to lower-income students, by about $1,400. Many illegal immigrants would be eligible for the aid.
Biden also wants to subsidize two years of tuition at historically black colleges and other colleges targeting minority groups.
The preschool proposal gives subsidies to families earning up to 1.5 times the median income in the state in which they live.
Preschool staff would receive significant raises under the plan: All pre-K staff would be paid at least $15 per hour, and some staff would be paid at the same rate as kindergarten teachers.
The package also calls for $9 billion to “train, equip and diversify” teachers.
A paid leave program would also be created. After it is in existence for 10 years, the program would guarantee 12 weeks of “parental, family and personal illness/safe leave” and pay workers on leave up to $4,000 a month.
Axios noted that some promised items had been dropped, including any plan to cut the cost of prescription drugs or to expand Medicare eligibility
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