Democrats in Congress are negotiating a comprehensive budget reconciliation package that will serve as the centerpiece of President Joe Biden’s domestic agenda.
The 10-year spending plan, which was originally estimated to cost $3.5 trillion, represents the most significant step forward in Democrats’ efforts to expand education, health care, and child care assistance, as well as address the climate crisis and make additional infrastructure investments. However, it has alarmed moderate Democrats in both chambers, who are concerned that some of the package’s provisions go too far and are too expensive.
Democrats are under pressure to finalize the package, which party leaders have pledged to move in tandem with a separate $1 trillion infrastructure bill that has already been approved by the Senate and is awaiting a vote in the House before it can be signed by Biden.
Unlike the Democrats’ infrastructure package, the budget plan is unlikely to garner bipartisan support; however, under Senate rules, it can be passed with only 50 Democratic votes. Republicans have slammed the size of the package and the number of provisions being considered by Democrats. After weeks of back-and-forth, Biden unveiled details of a scaled-back version of the plan, lowering the top line figure from $3.5 trillion to roughly $1.9 trillion and specifying that certain provisions, such as free community college, would be dropped.
The legislation has yet to be finalized, but based on ongoing negotiations between the White House and key lawmakers, draft bills from various House committees, and a Senate Budget Committee resolution summary, here’s what we know could be in the package:
The House Education and Labor Committee’s proposal would create a universal Pre-K program for 3- and 4-year-olds. Some of the details are spelled out in Biden’s original proposal, dubbed the American Families Plan. Through a national partnership with states, the federal government would invest $200 billion in universal preschool for all 3- and 4-year-olds. When fully implemented, the administration estimates that it will benefit 5 million children and save the average family $13,000. It would be available to families of all income levels, but states would be required to cover roughly half of the cost when the measure is fully implemented.
The House Ways and Means Committee is also looking to extend the child tax credit, the earned income tax credit, and the child and dependent care tax credit, all of which were enhanced as part of the Democrats’ $1.9 trillion coronavirus rescue plan but are only in effect until 2021.
The enhanced child tax credit would be available for an additional year or two under current negotiations, rather than through 2025, as Democrats had hoped. Under this year’s expansion, families can receive a $3,600 child tax credit for each child under the age of six, and a $3,000 credit for each child under the age of eighteen. The tax credit, half of which is paid out in advance monthly installments through December, is fully refundable, allowing more low-income parents to benefit from it – a provision that House legislation would make permanent. The remaining half can be claimed by families at tax time next year.
The committee’s proposal would also make the earned income tax credit and the child and dependent care tax credit permanent.
Democrats are also working to improve child care options for working families.
According to a proposal from the House Committee on Education and Labor, low- and middle-income families would pay no more than 7% of their income for child care for children up to the age of five. Parents who earn up to 200 percent of the state median income for their family size would be eligible.
The Ways and Means Committee in the House is also working on legislation to invest in child care. It aims to provide parents and caregivers with up-to-date information on available child care options and to assist them in applying for slots. It would provide grants to agencies to fund the construction and remodeling of child care facilities, as well as raise the wages of child care workers.