The Democrats’ $ 3.5 trillion price range would prolong the kid tax credit score

Sue Barr | Image source | Getty Images

Families with children would be big winners if the $ 3.5 trillion budget plan released by the Democrats on Monday holds up.

The package instructs Senate committees to invest trillions of dollars in strengthening the social safety net for families through programs and services like an expanded child tax break, childcare allowance for working parents, free preschoolers, and more. According to a leaflet accompanying the proposal, investments in working families, the elderly and the environment would amount to around $ 1.8 trillion.

“At its core, this legislation is about restoring the middle class in the 21st century and allowing more Americans to get there,” Senate Majority Leader Chuck Schumer, DN.Y., said in a letter Monday. “By making education, health care, childcare and housing more affordable, we can take tens of millions of families one step further.”

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This is planned for children.

Tax breaks, education and nutrition

The plan would encourage several tax credits that benefit low and middle income families, especially those with children.

It would extend the child tax credit, income tax credit, child and child care tax credit, and paid family and sick leave, according to a leaflet that outlines the top lines of the budget decision.

The American Rescue Plan in March increased the child tax break, increasing the benefit from $ 2,000 to $ 3,000 for children under 17 and an additional $ 600 for children under 6. Half of the credit went to families each month in July. Payments.

This loan alone will help around 65 million children in the US, about 90% of the children in the country, according to the Center on Budget and Policy Priorities. It will also lift around 4.1 million children out of poverty and lower the overall poverty rate by around 40%. The continuation of the credit – which so far only applies to the tax year 2021 – means that these advantages will remain.

“The finance committee will extend tax cuts for families with children, working adults and caregivers for as long as possible,” Senate finance committee chair Ron Wyden, D-Ore., Said in a statement Monday. “Before President Roosevelt introduced Social Security in the 1930s, half of American seniors lived in poverty.

“This new monthly child benefit is a social security for our children and represents a fundamental reorganization of the obligations of this country towards its children and their families.”

Children and their families would also benefit from investments in childcare and education built into the proposal. The Senate Democrats want to extend the general pre-K to 3- and 4-year-old children and expand childcare allowance for working families.

The plan would also remove tuition fees at community colleges, give money to institutions that serve minorities, and increase the Pell maximum grant award to help people attend and pay for higher education. Child nutrition programs would also get a boost from the Democratic proposal.

What’s next

Of course, the proposal is just a blueprint with overarching instructions for the Senate committees that are ultimately responsible for legislating.

So far, the topline instructions provide few details on the programs and benefits that are to be expanded as all senators have a say in drafting the law in the coming weeks, Schumer said. The Democrats plan to pass the budget through reconciliation, a process that doesn’t require Republican support if all 50 of their members in the chamber agree.

The framework for the budget resolution agreement, released on Monday, says the proposal would be fully offset by “a combination of new tax revenues, healthcare savings and long-term economic growth”. At the same time, the proposal would ban tax increases for those who earn less than $ 400,000 a year.

More details are likely to come soon. According to Schumer, the Senate could pass the bipartisan infrastructure bill worth $ 1 trillion on Tuesday and would work immediately to pass the next budget resolution.

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