April 28, 2021
Biden administration outlines $1.8 trillion American Families Plan
This morning (April 28), the White House outlined their $1.8 trillion American Families Plan, which President Biden will lay out in more detail tonight during his first address to a joint session of Congress. The plan calls for $1 trillion in investments and $800 billion in tax cuts directed at American families and workers, as well as tax code reforms focused on high-income Americans, estimated to raise about $1.5 trillion over a decade. According to the Fact Sheet, when combined with the American Jobs Plan, all of the investments would be fully paid for over the next 15 years.
In a background press call on the plan, a senior administration official said Biden’s plan “is about cutting taxes for middle-class families, for childcare, for healthcare, and for families. And he believes that we should do that in a fiscally responsible way, first and foremost, by making sure the wealthiest Americans actually pay the taxes they already owe.”
The plan proposes investments of over $500 billion in early childhood and postsecondary education, $225 billion to address child care affordability and workforce sustainability, $225 billion to create a national paid leave program, $45 billion for nutrition programs, and extensions of enhanced tax credits included in the American Rescue Plan including those for Affordable Care Act (ACA) premium tax credits and the Child Tax Credit (CTC), Child and Dependent Care Tax Credit (CDCTC) and Earned Income Tax Credit (EITC). The plan also proposes paying for the investments in part through increasing the top marginal tax rate to 39.6% and ending a variety of other tax breaks and “loopholes” for high-income Americans while promising that no one making $400,000 per year or less will see their taxes go up.
Notably absent from the plan are proposals to tackle drug prices and enhance coverage through Medicare and Medicaid expansions, despite pressure from Congressional Democrats to include additional health priorities. Senior White House officials said in a briefing call that while not included in the current proposal, the President “remains fully committed to negotiations to reduce prescription drug prices” and hinted that revenue generated from such a future proposal could be used in “expanding the benefits of Medicare itself.” The Fact Sheet also notes that “President Biden has a plan to build on the Affordable Care Act and lower prescription drug costs for everyone by letting Medicare negotiate prices… creating a public option and the option for people to enroll in Medicare at age 60, and closing the Medicaid coverage gap to help millions of Americans gain health insurance.”
Additional detail, by topic area, is outlined below:
Paid family and medical leave ($225b)
Unemployment Insurance (UI) Program ($45b)
ACA premium tax credits ($200b)
Other tax credits extensions
The fact sheet is available here.