The Biden Administration is working hard to get Americans back on their feet after last year's economic downturn and are currently working on a new stimulus bill to help families rebound with more money in their pockets.
The American Families Plan (AFP) is the name of a new stimulus bill that has been put forward by President Biden in order to help repair America's financial future.
The complicated thing about the AFP is that it's not just one program but a combination of different programs that will have an impact on your finances.
Details of the stimulus plan are still being finalized so the final proposal may look different once it passed through Congress, but here’s what we know so far about the proposal and how you could see more money from the government in 2021:
1: Child Tax Credit Extension
The Child Tax Credit (CTC) is a tax credit available to households with children. For tax year 2021, families claiming the CTC will experience an increase in this credit—receiving up to $3,000 per qualifying child between the ages of 6 and 17 and $3,600 per qualifying child under age 6. The American Families Plan proposes that this increased child tax credit be extended through 2025.
The temporary expansion of the child tax credit in March's stimulus bill is expected to reduce poverty by 45%. There are nearly 5 million children who would no longer live in poverty if this plan was passed. However, this continued tax credit all hinges on Congress renewing the program.
2: Child Care Subsidies for Working Families
Child care is expensive. According to the Department of Health and Human Services, child care costs are up 3% from last year alone. It's a tough pill to swallow when you're trying to make ends meet as a single parent or working family. However, it doesn't have to be this way!
The American Families Plan wants to help Americans make child care more affordable for working families through tax credits and subsidies for childcare costs.
3: Curbing Student Debt: The $10,000 Plan
Student loans are the new normal. It is not uncommon for a student to graduate with over $30,000 in debt. The American Families Plan proposes canceling up to $10,000 in student loan debt per person. This would be an amazing relief for many families and individuals who are struggling under the weight of their student debts.
There is a push from some leaders to increase this debt forgiveness to $50,000, but there is yet to be a determination on this final amount.
4: New Minimum Wage For Child Care Workers
The American Families Plan proposes a new $15/hour minimum wage for child care and preschool workers. This is great news because the salaries in this industry are notoriously low. The average hourly wage in the US is $11.65 for child care workers and $14.67 for preschool teachers.
The AFP proposal would also ensure child care workers receive job-embedded coaching and professional development, along with additional funded training opportunities.
5: Fourth-Round Stimulus Payments
The fourth round of stimulus payments is a big topic in Washington, DC. Congress sees the need for more economic relief to be provided to Americans who are still suffering from the effects of the Covid-19 pandemic.
President Biden has yet to decide whether or not he will include this round in his next bill, but with pressure mounting, it seems likely that he will go ahead with them.