President Biden’s mantra for his ambitious $1.8 trillion American Families Plancould be: Go big or go home.
It’s a wish list of economic help for low- and middle-income families:
· Two years of free community college for all.
· An increase in Pell grants for low-income students of up to $1,400. And tuition subsidies for lower-income students who attend historically Black colleges and universities, tribal colleges or minority-serving institutions.
· A promise that low- and middle-income families will pay no more than 7 percent of their income for child care for children 5 and under.
· A push for a permanent increase in the child and dependent care tax credit — up to $4,000 to cover expenses related to care for a child under 13 or a dependent with a disability who needs care, and up to $8,000 for two or more qualifying individuals.
· Extending until 2025 the increases in the child tax credit in the American Rescue Plan — $3,600 for children under 6 and $3,000 for those older than 6.
· Providing up to 12 weeks of paid family and medical leave phased in over 10 years.
· Lowering health-care premiums for millions of Americans who buy their health coverage under the Affordable Care Act.
I want to believe change is coming. But we’ve been here before. Grand plans made, then broken or stymied by a horribly partisan political system in which all too often policies favoring major corporations and special-interest groups trump the needs of the many.
President Donald Trump made all kinds of promises about helping struggling Americans, too, in his first addressto a joint session of Congress. Many of his plans were thwarted by the pandemic and a Congress so divided that members might struggle to agree the sky is blue on a sunny day.
Biden certainly said all the right things — about the need to increase the minimum wage and create jobs that could give people “a little breathing room.” But frankly, I’mconcernedlegislators arewilling only to drop financial breadcrumbs to low- and middle-income households when an economic crisis hits.
Even at the depths of this coronavirus recession, manySenate Republicans were reluctant to endorse a big stimulus program — although it had Trump’s backing.
We need long-term financial relief for people left further behind because of the pandemic. Realistically, Biden’s got a short time before the next election cycle might take away the slight legislative leverage the Democrats wield in Congress.
But the costs of inaction will further widen the economic divide. A recent Washington Post-ABC News poll found that a quarter of women say their family’s financial situation is worse today than before the coronavirus-related shutdowns.
Yes, the three rounds of stimulus payments made a huge difference, but just for a few weeks or months. When will we stop trying to solve systemic economic problems for low- and middle-income families with relief money that is given only begrudgingly — and then only because the powers that be fear it will upset Wall Street if they don’t.
My Post colleague Allan Sloan wrote at the end of last year, “I think that many of the problems in our country stem from the division between the kind of people who benefit from government policies that support financial markets and stock prices, and the people short on financial assets who are left on their own to try to make a decent living and provide for their families at a time when inflation-adjusted wages have been eroding.”
The Biden administration and many congressional Democrats want to increase the hourly minimum wage from a measly $7.25 to $15 an hour.
It’s a popular proposal.
Sixty-two percent of U.S. adults favor raising the federal minimum wage to $15 an hour, according to a Pew Research Center survey in early April. But there are sharp partisan differences, Pew said.
“Let’s raise the minimum wage to $15,” Biden said in his speech Wednesday night. “… No one working 40 hours a week should live below the poverty line.”
At one point, Biden challenged the theory that if you lower the tax rate for corporations and the rich, they will, in turn, make moves that will stimulate the economy and ultimately help low- and middle-income America.
“Trickle-down economics has never worked,” Biden said, “and it’s time to grow the economy from the bottom and the middle out.”
He’s right. As The Post reported last year, a compensation study looking at data spanning 50 years and 18 countries found that tax cuts for the rich simply enrich them.
“We find that major reforms reducing taxes on the rich lead to higher income inequality,” said a London School of Economics and Political Science working paperby David Hope and Julian Limberg, adding, “Lower taxes on the rich encourage high earners to bargain more forcefully to increase their own compensation, at the direct expense of those lower down the income distribution.”
As I listened to Biden, I felt encouraged for the millions of Americans who feel financially lost. His agenda for these struggling families is bold. But delivering on his promises will take a political miracle.