State to benefit from $1.8 trillion plan, report says

May 07, 2021
In The News

State to benefit from $1.8 trillion plan, report says

Written by Frank E. Lockwood
Published Arkansas Democrat Gazette

WASHINGTON — President Joe Biden’s $1.8 trillion American Families Plan will help lift Arkansans from poverty, removing barriers to educational and employment opportunities, the White House said Thursday.

The administration made its case for the bill, laying out what it called “The Need for Action in Arkansas.”

The four-page report described the legislation, unveiled last week, as a “once-in-a-generation investment in the foundations of middle-class prosperity: education, health care, and child care.”

Arkansas Republican officials opposed the plan, warning that it would lead to more government control and larger deficits.

If passed, the plan will yield “significant economic returns,” increasing productivity and spurring economic growth, the administration report stated.

Similar reports were released for all 50 states, as well as the District of Columbia.

Under the plan, increases in the child tax credit, which were signed into law in March, would be extended until 2025.

Parents would receive $3,600 for each child under the age of 6 and $3,000 for every child 6 and older.

The extension “will benefit 661,000 children in Arkansas, including 249,000 children of color,” the report stated, predicting that it would lift 47,000 above the poverty line, cutting the child poverty rate by 48%.

The legislation would also make permanent recent increases to the child and dependent care tax credit.

“Families will get back as a tax credit as much as half of their spending on child care for children under age 13, so they can receive a total of up to $4,000 for one child or $8,000 for two or more children,” the report states. Families making less than $125,000 would get the full credit. Higher income earning families making less than $400,000 per year would qualify for partial credit.

If approved, the legislation would make permanent the earned income tax credit expansion for workers with no children.

“This will benefit 173,700 workers in Arkansas, many of whom are essential workers, and 55,200 of whom are people of color,” the report stated.

Under the plan, “at least two years of free community college” will be provided to students, the report states, adding that the average cost per year for a two-year degree in Arkansas is $3,752.

It will also increase the maximum Pell Grant awards by about $1,400. In Arkansas, 61,809 students in Arkansas rely on the grants to help pay for their educations, it states.

The legislation also calls for universal preschool to be offered to all families with 3- and 4-year-olds. Currently, 34,584 of the state’s 77,531 children in that age bracket are enrolled in publicly funded preschool.

Other items include government-subsidized child care for low- and middle-income families, and paid family and medical leave. The number of children entitled to free school lunches would rise by 62,000, while 291,000 students would qualify for federal food aid during the summer.

The Patient Protection and Affordable Care Act would be expanded, and the age for Medicare enrollment would drop to 60.

“Right now, too many Americans are struggling to meet basic needs and to cover basic expenses,” said Carmel Martin, deputy director of the Domestic Policy Council for Economic Mobility. “An economy that fails so many of us is not only unfair, but it’s unsustainable.”

White House officials said taxes on most Americans would not be affected by the changes. Taxes on corporations would increase.

“No one making under $400,000 would see a tax increase as part of this,” said David Kamin, deputy director of the National Economic Council.

Members of the all-Republican Arkansas congressional delegation have criticized the legislation.

U.S. Rep. Rick Crawford of Jonesboro said it would “explode our federal debt and send our children and grandchildren the bill” while also fueling inflation.

U.S. Rep. Bruce Westerman of Hot Springs said the plan would be “bad for hardworking Americans.”

Arkansas Gov. Asa Hutchinson was also critical.

“My initial reaction is that the plan is too costly, and many of the new program areas are more adequately addressed at the state level or not at all,” he said.

U.S. Rep. Steve Womack of Rogers said “improving the livelihoods of hardworking families” is a priority, but the Biden plan isn’t the way to do it.

“‘Free’ certainly sounds good until Americans are left to pay the check. The realities include further bankrupting the country, raising taxes and forcing us to borrow from our children’s future,” he said.

U.S. Sen. John Boozman of Rogers called it “yet another attempt to use the pandemic and economic recovery as a pretext to pass the Left’s long-held policy goals” and said it would “give the federal government more control over Arkansans’ lives and push out more mandates from Washington.”

Democratic Party of Arkansas chairman Michael John Gray said the legislation would significantly benefit Arkansans who are struggling.

“It will lift people out of poverty that have been in poverty for generations. It will help communities that are suffering,” Gray said.

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