Raising a child is an inherently difficult proposition. Parents have to master lots of skills, from changing diapers to helping with math homework to explaining where, exactly, babies come from. And while these challenges are universal, parenting is particularly difficult and expensive—and more difficult and expensive than it has to be—in the United States. When you consider the massive amount of wealth in this country and that other developed nations have much parent-friendlier laws on the books, it’s clear that the government could make things could be a lot easier for families.
The Building an Economy for Families Act is a dramatic step in the right direction. Introduced by House Ways and Means Committee chairman Representative Richard Neal, the bill would make “basic support for workers with families part of the infrastructure of our economy instead of optional add-ons that not only don’t exist for a majority of workers but also could vanish at any moment.” In other words, it would universalize and guarantee benefits that every working parent deserves.
What precisely does that mean? And how would this bill actually help parents? Here’s everything you need to know about the legislation.
What benefits does the law create?
The new law would create two new entitlements for Americans.
The first is a new public program that would provide up to 12 weeks of paid family and medical leave for all workers. Most would receive about two-thirds of their normal wages, with higher wage replacement (up to 85 percent) for those making less. Guaranteed paid leave would mean that new parents and workers welcoming a new child or dealing with a serious medical issue—their own or that of a loved one—could take time off without fear of losing their job or going completely without income.
Under the law, the paid family leave program would be administered by the Department of the Treasury but employers and states that already provide paid family leave would be eligible for reimbursement from the federal government provided their benefits met the standards of the federal program.
The bill would also create a new Child Care Information Network, a resource that would help parents find information on childcare that meets their needs. The quality of available child care would also go up thanks to infrastructural investment in child care facilities. The quantity of child care would go up with increased funding for states addressing child care shortages. There’s also a refundable tax credit, up to $5,000 per year, for child care workers that could entice more people to join the industry and benefit the existing disproportionately female and non-white child care workforce.
Along with these new benefits, there would be a worker information system designed to keep workers informed about the benefits that are available to them and avoid being locked out of programs like unemployment insurance, paid leave, and child care assistance.
What tax credits are included?
Of course, working families don’t just need new benefits. They also need money. On this front, the Building Economy for Families Act does a lot by simply permanently extending the refundable expansions of worker and family-focused tax credits in the American Rescue Plan Act.
That means the fully refundable child tax credit of up to $3,600 per dependent in periodic payment installments, a fully refundable child and dependent care credit of up to $8,000 for qualifying child care expenses, and an earned income tax credit that is more generous to workers without dependents, and those who experience an income shock, would all become permanent components of the social safety net.
These credits add up to substantial relief that would ease financial worries for millions of American families. And along with the new entitlements the law would create, they represent a dramatic (and long overdue) shift in American policy that would make parenting a less expensive, less stressful endeavor.