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The administration introduced the $1.8 trillion proposal Wednesday that focuses spending on education and child care.
President Biden’s $1.8 trillion domestic spending plan envisions states will help pay for two key proposals: free tuition at two-year community colleges and expansion of pre-K for young children.
Biden made the case for a his package of sweeping federal investments during a joint address to Congress Wednesday night. His proposal, the American Families Plan, consists of about $1 trillion in spending investments over a 10-year period and $800 billion in tax cuts.
The plan would allocate $109 billion to cover the cost of two years’ tuition at community colleges for all first-time students and workers who want to learn new skills, according to a fact sheet published by the White House. The federal government would pay for approximately 75% of the tuition costs while states would cover the remaining 25%, said a senior administration official who discussed the plan on background with reporters. The tuition program would also be available to unauthorized immigrants who were brought into the United States illegally as children.
The program is viewed as a federal-state partnership that would require state buy-in, the White House official said. But the administration has provisions in place to work directly with local institutions if a state does not choose to participate.
States that take the money would be expected to maintain their current contribution to post-secondary education systems, so they would not be able to offset those contributions with the new funding from the federal government, the official said.
Approximately 5.5 million students would receive two years of free college education through the program if all states, tribes and territories participate in the program, according to White House estimates.
It’s unclear how many states would take up the partnership. After the Affordable Care Act was passed in 2010, some Republican-controlled states declined to expand Medicaid programs even with federal contributions.
Biden’s plan would also make universal pre-K education available to all 3- and 4-year-olds, regardless of family income. Like the college tuition plan, the expansion of universal pre-K would rely on a federal-state partnership, the administration official said.
The White House estimates the $200 billion program would benefit approximately 5 million children and save the average family $13,000 in childcare.
The pre-K expansion would be phased in over time, requiring states to contribute about 10% of the funding initially and later covering 50% of the costs, the official said. Similar to the community college plan, the federal government could work with localities to set up and fund pre-K programs if a state declines to participate.
Biden’s announcement of his domestic spending agenda comes on the heels of the introduction of his more than $2 billion infrastructure proposal, which would repair roadways, bridges, improve affordable housing and water and sewer systems, and invest in broadband. Taken altogether with the coronavirus relief plan passed by Congress in March, Biden’s spending requests top $6 trillion.
While supportive of some infrastructure spending measures, Congressional Republicans have balked at the high price tag of the Biden plans and criticized liberal policy priorities included in the plan that they say go far outside the scope of traditional infrastructure.
To pay for the plan, Biden will rely on a series of tax increases on corporations and the rich. He has pledged not to raise taxes for anyone making less than $400,000 a year. The tax changes include raising the top rate for individuals from 37% to 39.6%, and raising the top rate on capital gains and dividends from 20% to 39.6%.
Other proposals included in the American Families Plan include:
- An overhaul of the unemployment insurance system to automatically adjust the length of time and amount of benefits available for unemployed workers based on economic conditions.
- $225 billion to make child care more affordable and to raise wages to $15 an hour for child care workers, providing free child care to the neediest families with children under the age of 5.
- $225 billion for paid family and medical leave.
- $200 billion to extend enhanced Affordable Care Act tax credits.
- $45 billion to expand food nutrition programs, including free school lunch programs.
Andrea Noble is a staff correspondent with Route Fifty.
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