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Families with children would be major winners if the $3.5 trillion budget blueprint released Monday by Democrats holds up.
The package instructs Senate committees to invest trillions of dollars to boost the social safety net for families through programs and services such as an expanded child tax credit, childcare benefits for working parents, free pre-K and more. Investments in working families, the elderly and the environment would total about $1.8 trillion, according to a fact sheet about the proposal.
“At its core, this legislation is about restoring the middle class in the 21st century and giving more Americans the opportunity to get there,” said Senate Majority Leader Chuck Schumer, D-N.Y., said in a Monday letter. “By making education, health care, childcare and housing more affordable, we can give tens of millions of families a leg up.”
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Here’s what is in the plan for children.
Tax breaks, education and nutrition
The plan would further several tax credits that benefit low- and middle-income families, and especially those with children.
It would extend the child tax credit, earned income tax credit, child and dependent care tax credit and paid family and medical leave, according to a fact sheet outlining the budget resolution toplines.
The American Rescue Plan in March enhanced the child tax credit, boosting the benefit to $3,000 from $2,000 for children 17 and younger and giving an additional $600 for kids under the age of 6. Half of the credit started going out to families in July as monthly payments.
This credit alone will help some 65 million children across the U.S., roughly 90% of kids in the country, according to the Center on Budget and Policy Priorities. It will also lift some 4.1 million children out of poverty, slashing the overall poverty rate by about 40%. Continuing the credit – which so far is only for the 2021 tax year – will mean these benefits continue.
“The Finance Committee is going to extend tax cuts for families with children, working adults and caregivers for as long as possible,” said Senate Finance Committee Chair Ron Wyden, D-Ore., in a Monday statement. “Before President Roosevelt created Social Security in the 1930s, half of American seniors lived in poverty.
“This new monthly child benefit is Social Security for our children, and represents a fundamental reordering in the commitments this country makes to its children and their families.”
Children and their families would also benefit from investments in childcare and education baked into the proposal. Senate Democrats would like to extend universal pre-K to 3- and 4-year-old children and expand childcare benefits for working families.
The plan would also make community college tuition-free, give money to minority-serving institutions and increase the maximum Pell Grant award to help people attend and pay for higher education. Child nutrition programs would also get a boost by the Democrat’s proposal.
Of course, the proposal is only a blueprint with overarching instructions for Senate committees ultimately tasked with writing the legislation.
So far, the topline instructions offer few details about the programs and benefits it seeks to extend, as all Senators will be able to weigh in on the writing of the legislation in coming weeks, Schumer said. Democrats plan to pass the budget through reconciliation, a process that doesn’t require any Republican support if all 50 of their members in the chamber agree.
The budget resolution agreement framework released Monday says that the proposal would be fully offset by “a combination of new tax revenues, health-care savings and long-term economic growth.” At the same time, the plan would ban tax increases on those making less than $400,000 per year, according to the proposal.
More details will likely come soon. The Senate could pass the $1 trillion bipartisan infrastructure bill as early as Tuesday and would immediately work on passing the budget resolution next, according to Schumer.
Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.
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