Closing The Gap

Biden calls for free, universal preschool and affordable child care in the U.S.

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President Joe Biden released his American Families Plan on Wednesday, proposing that the U.S. provide universal preschool and ensure no household spend more than 7% of its income on child care. 

In the plan, which is set to cost $1.8 trillion over the course of 10 years, Biden proposes creating a partnership with states to provide "free, high-quality, accessible and inclusive preschool" to all 3- and 4-year-olds, according to a statement from the White House.

The administration is calling on Congress to spend about $200 billion to implement the program, but estimates that universal preschool will benefit 5 million children and save the average family $13,000 in lifetime costs.

Biden's plan also proposes allocating $225 billion to help families with children up to age 13 pay for child care. Under the plan, families earning less than 1.5 times their state median income levels would not pay for child care and those earning above that threshold would pay no more than 7% of their income for child care. The Biden administration estimates this will save the average family $14,800 per year on child-care expenses.

To further help families afford child care — including full-time care, afterschool care and summer programs — Biden is calling for a permanent expansion of the Child and Dependent Care Tax Credit (CDCTC), which allows households to receive a tax credit for up to $4,000 for one child or $8,000 for two or more children children under age 13.

Families making less than $125,000 a year would be eligible to receive a tax credit for as much as 50% of their spending on child care, while families making between $125,000 and $400,000 would receive a partial credit.

"President Biden has made it clear: The days of our nation failing to support and invest in the future of our babies and toddlers are over," says Myra Jones-Taylor, chief policy officer for nonprofit Zero to Three, which focuses on advocacy for programs focused on children and infants.  

"This plan provides Congress with a blueprint to help families of young children immediately," Jones-Taylor says. "The president's proposal is simply unprecedented in the sweep of its policies, and we gladly welcome it." 

In addition to universal preschool and a cap on child-care spending, Biden's proposal also contains new paid leave programs, an extension of the $3,000 child tax credit through 2025, two years of free community college for every student and funding to train and pay educators. 

To fund the American Families Plan, Biden has proposed a number of tax increases, including raising the tax rate on capital gains to 39.6% for households making more than $1 million.

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