The American Jobs and Families Plan, Explained

Earlier this year Congress passed the American Rescue Plan which provided desperately needed relief to millions of people. President Biden and Congress are now focused on Recovery to build back our economy and restructure it to benefit all people.

The American Jobs Plan (AJP) is the first part of Biden’s Build Back Better Package, and it works to address physical infrastructure and the care economy. The American Families Plan (AFP) is the second part of Biden’s Build Back Better Package and focuses on supporting kids and families. Together they make the American Jobs and Family Plan.

Now that Biden has introduced his entire Recovery proposal,, Congress will get to work on a Recovery package that includes the President’s priorities. It is important that Congress view Biden’s plan as a floor to build from, and we must push MOCs to include Indivisible’s Recovery Priorities that fall outside of Biden’s American Jobs and Family Plan.

What is In the American Jobs Plan?

Hot on the heels of passing the ARP Biden has demonstrated he understands the urgency of immediately passing a bold Recovery package. While we applaud the broad scope of investments and standards outlined in the AJP are disappointed by the size of investments in Biden’s plan.

The Size of AJP

The bad news is the AJP falls very short of what is needed to address the climate, racial justice, and economic crises facing this country. Biden has proposed spending $2.3 trillion for recovery. However, economists have made clear we need at least three times that investment if we are to create a lasting recovery for all people.

When investments fall short of what is needed, jobs are not produced. In order to end the unemployment crisis we are facing we need 15 million good jobs to be created over the next 10 years. The AJP does not achieve this critical goal.

As the Recovery baton is passed to Congress, Democrats must ensure that the size of recovery exceeds Biden’s proposal so that we can end the unemployment crisis. That means investing $1 trillion a year over the next decade while ensuring the scope of investments is broad and expanding the standards tied to these jobs.

The Scope of AJP

On to some better news, the scope of Biden’s first proposal is promising with investments across many sectors of our economy. Here is a breakdown of what some of those sector specific investments look like:

• Updating our Transportation AJP invests in repairing our crumbling roads, bridges, waterways and airports. Importantly, this plan also invests in public transit, rail and electric vehicles and infrastructure.
• Building climate resilience Biden works to increase the resiliency of essential resources that keep people and communities safe like the electric grid, food systems, and critical infrastructure. The plan also works to strengthen and restore natural nature-based infrastructure. These efforts are critical because we know that Black, Brown, and Indigenous people are more likely to live in areas most vulnerable to climate related disasters.
• Investing in the care Economy Biden expands access to long-term care services under Medicaid and ensures this expansion results in well-paying caregiving jobs that include benefits and the ability to collectively bargain.
• Broadband for all AJP works to provide high-speed broadband to all Americans, while prioritizing rural and tribal communities who have long lacked access to broadband.
• Providing safe water AJP begins to address the lead pipe and clean drinking water crisis in America by replacing lead pipes across the country and delivering clean drinking water.
• Upgrading Energy Infrastructure AJP puts us on track to achieve 100 percent carbon-free electricity by 2035. Furthermore, this plan works to increase the resiliency of our grid, and invests in clean energy by extending tax credits and pushing for a Clean Energy Standard (note that the way this is defined will be hugely important, and a piece we’ll be keeping a close eye on).
• Protecting lands Importantly, this plan eliminates fossil fuel subsidies and makes polluters pay for environmental clean up. Additionally, Biden’s plan works to curb pollution by plugging orphan oil and gas wells and cleaning up abandoned mines, investing in the remediation and redevelopment of these Brownfield and Superfund sites, and establishing a new Civilian Climate Corps.
• Upgrading Buildings AJP invests in retrofitting and modernizing million homes and commercial buildings, schools, community colleges, VA hospitals, public housing and child care facilities.
• Revitalizing Manufacturing This includes pandemic protection, federal procurement for domestic clean energy goods, support for small businesses, and creating a Rural Partnership Program to help rural regions, including Tribal Nation work towards and achieve inclusive community and economic development.
• Investing in Workforce Development Biden calls for a new Dislocated Workers Program to assist workers who have lost their job. The AJP also ensures workforce development projects and jobs be made in underserved communities, and invests in apprenticeships and pre-apprenticeships programs to build workforce development opportunities.
• Take on Corporate Greed AJP includes a tax plan to incentivize job creation and investment in the US, stop corporations from unfair and wasteful profit shifting to tax havens, and ensure that large corporations are paying their fair share.

The scope demonstrated in Bidens AJP is a welcome first step. It is clear that in order to create a true Recovery we need investments to be made across all sectors of the economy.

As Congress gets to work, they should recognize the President’s desire to ensure Recovery is broad and push to make the scope even more inclusive.

The Standards of AJP

In addition to being far reaching in scope, Biden’s plan includes important labor, justice, and climate standards. Dedicating 40% of benefits to frontline communities is critical as we work to invest in communities that have borne the brunt of an extractive economy for decades, have consistently been left out of recovery opportunities, and have faced deadly consequences in the wake of COVID.

Furthermore, the strong labor standards in AJP ensure that the jobs created are good jobs, that include family sustaining wages and access to unions. This is important because we don’t want the same low paying extractive jobs that have left many workers vulnerable to economic shocks and shifts, and stripped them of their collective power.

Finally, the climate standards in AJP cut pollution, end fossil fuel subsidies, and prioritize jobs that address environmental injustice and the climate crisis are a vital part of decarbonizing our nation and creating a recovery that results in a sustainable and regenerative economy.

What is In the American Families Plan?

The Size of AFP

Similar to the AJP, the AFP does not go big enough to address the needs of families. The AFP spends $1 trillion, and even when combined with the $2.3 trillion from AJP, economists have made clear we must be spending $1 trillion a year over the next ten years. Congress must take Biden’s Plan and drastically increase the size of their recovery package.

The Scope of AFP

The scope of Biden’s AFP is more limited than AJP. The AFP mainly focuses on supporting children, education, financial relief for families, and increasing taxes on the rich. Here is a breakdown of what some of those sector specific investments look like:

Investing in Higher Education Biden is calling for two years of free community college to all Americans, including DREAMers, providing two years of subsidized tuition, and expanding programs in high-demand fields at HBCUs, TCUs, and MSIs. The AFP also works to support students by providing additional assistance to low income students and increasing Pell Grants.

Supporting Teachers The AFP works to address the teacher shortage, improve teacher preparation, and strengthen pipelines for teachers of color. Biden’s plan increases scholarships for future teachers, invests in the Grow Your Own Program, targets $400 million for teacher preparation at HBCUs, TCUs, and MSIs, and $900 million for the development of special education teachers.

Childcare The AFP ensures that parents only pay a certain percentage of their income on childcare on a sliding scale. For low-income families, child care would be fully covered, and families that earn 1.5 times the median income in that state would pay no more than 7% of their income. There are also investments in care centers and providers to improve quality and expand access to different options for care, including child care centers, family providers, or Early Head Start. Additionally, the AFP would invest in the childcare workforce to raise wages and expand training and professional development opportunities.

Paid Family Leave The AFP seeks to create a program to pay workers a partial wage replacement to take 12 weeks of parental, family, and personal illness, or safety leave phased in over 10 years, as well as three days of bereavement leave effective immediately. Workers taking leave would receive somewhere between two thirds to 80% of their income, up to $4,000 per month.

Nutrition AFP invests $45 million to expand summer EBT to all eligible children nationwide. This program provides free and reduced-price meals to children during the school and summer months. This funding will also expand school meal programs and launch a healthy foods incentive demonstration to improve the nutrition standards of school meals. Importantly, this plan allows individuals convicted of a drug-related felony to qualify for SNAP, a program that helps families and individuals afford healthy food.

Unemployment Insurance Biden has proposed reforming the unemployment insurance system to include “automatic stabilizers.” This would mean that the length or amount of benefits for unemployed workers would automatically increase if the economy was trending downwards. The goal is to both provide workers more assistance when it’s most necessary, while preventing the politically motivated delays and brinksmanship we’ve seen over the last year and a half. There are many proposals in Congress, from advocates and experts, for how to structure automatic stabilizers, and the plan from the White House does not specify a preferred approach.

Tax Credits The AFP would extend key tax credits for working families that were dramatically improved in the American Rescue Plan. The Rescue Plan expanded the Child Tax Credit (CTC) to include low-income parents, increased the benefits to $3,000 per child above six and $3,600 per child younger than six, and made it distributed in monthly installments. Practically this means millions of working and middle class parents receive a check each month to help meet the needs of raising their children. The Rescue Plan only created this program for one year, so the AFP extends it until 2025, and permanently extends the “refundability,” meaning you don’t have to owe taxes in order to claim the credit.

The AFP would also permanently extend the enhanced Child and Dependent Care Tax Credit (CDCTC), which helps parents afford child care expenses from after school care to summer programs by providing up to $4,000 for one child or $8,000 for two or more children. Families who make less than $125,000 per year are reimbursed 50% for those expenses, and families who make between that amount and $400,000 receive a partial reimbursement.

Finally, the AFP would make the expanded Earned Income Tax Credit (EITC) permanent, so adults who earn low wages but do not have children would still be eligible for roughly triple the credit they were previously to a maximum of $1,500.

Taxing the Rich The title of the tax section of the AFP is “Tax Reform that Rewards Work - Not Wealth,” and the proposal takes several important steps in that direction. These taxes are partially to pay for important investments, but also to start reversing the perverse incentives in our economy that allow the wealthy few to keep accumulating more and more while the rest of us scrape by with less. Specifically, Biden’s tax proposals in the AFP would:

• Increase IRS enforcement of the ultra-wealthy, who currently dodge taxes they owe, effectively cheating working people out of money that should be spent on public services. It’s estimated that the richest Americans dodge $175 billion in taxes every year, and this increased enforcement seeks to solve that problem.
• Reinstate the top tax rate on those making more than half a million dollars a year, the top 1%, to 39.6%, the same rate it was at before the 2017 GOP Tax Scam.
• Increase the tax rate that people making over $1 million per year on interest and dividends from investments (also called “capital gains”) to match the income tax rate. This would ensure that wealthy investors pay the same rate on their income as workers who make their income through wages or salaries.
• Close a loophole that allows the ultra wealthy to dodge taxes on big investments by passing them on to their heirs. This would only apply for gains above $1 million, so things like mega mansions. It would include protections to prevent small businesses and farms being passed on from being taxed in this way.
• Close the “Carried Interest Loophole,” which allows wealthy hedge fund partners and private equity investors to pay much lower rates than workers do on their income.
• Ensure that people making more than $400,000 per year pay the same 3.8% Medicare tax that everyone else pays.

The scope of the AFP is an opening bid, and Congress should build from there to ensure an inclusive and just recovery is achieved for all people in the U.S. The public’s mandate to Congress has been clear from the start of the pandemic and has only increased in urgency: the federal government must deliver bold, equitable, robust, and immediate relief across issue areas to achieve a just recovery.

In addition to increasing the size and scope of investments, Congress has the ability to strengthen Biden’s tax proposals to raise additional revenue and go farther to make our economy more fair. To be clear, the federal government has the ability to pay for all of these programs, whether it’s through additional taxes on the wealthy and corporations or through deficit financing - cost simply is not a barrier to paying for a strong and inclusive economy. However, that economy would be even stronger if Congress included proposals like a financial transactions tax on high-risk Wall Street traders or an estate tax on the wealthiest 0.5% of Americans.

The AFP leaves Medicare coverage expansion, lowering prescription drug prices, and citizenship for essential workers still on the table. Congress can make sure these wildly popular proposals make it into the final recovery package and provide crucial relief for families in our nation. Read here for more on our recovery priorities and how you can push Members of Congress to include them.