How Texas stands to gain from the American Families Plan

El Paso News

US President Joe Biden speaks about the American Rescue Plan from the Roosevelt Room of the White House in Washington, DC, on February 27, 2021. – The US House passed the $1.9 trillion coronavirus relief package early Saturday, hailed by Democrats as a critical step in funneling new funding toward vaccinations, overburdened local governments, and millions of families devastated by the pandemic. (Photo by ANDREW CABALLERO-REYNOLDS / AFP) (Photo by ANDREW CABALLERO-REYNOLDS/AFP via Getty Images)

EL PASO, Texas (KTSM) — Families across Texas are set to reap benefits through investments made as part of the American Families Plan.

The American Families Plan, announced on April 28, is an investment in the foundations of middle-class prosperity by way of education, health care and child care, according to the White House. The Biden Administration is hopeful that helping families cover basic expenses will yield economic returns by boosting productivity and economic growth.

KTSM 9 News breaks down how investments will be made in Texas:

Higher Education

The price of higher education leads 55 percent of students in Texas to complete post-secondary degrees within six years. In the U.S., high schools with large minority populations and high poverty rates have reported college enrollment rates of about 10 percent. The American Families plan will provide at least two years of free community college to students, including DREAMers.

Pell Grant awards will be increased by about $1,400 to support students in Texas who rely on Pell for their education and will offer grants to improve college retention and completion.

Support is also being provided to minority-serving institutions, which includes UTEP. 

Universal Preschool

Attending preschool introduces students to skills that will set them up for success like socialization, time management and responsibility. In Texas, only 39 percent of 3-year-olds and 4-year olds are enrolled in publicly funded preschools.

The American Families Plan will provide free access to high-quality preschool to all 3-year-olds and 4-year-olds, which the Biden Administration says will help get parents back to work.

Additionally, every employee at funded preschools programs will be paid a minimum $15 hourly wage and provided with compensation and benefits that match kindergarten educators with similar qualifications. 

Teacher Investments

The U.S. faced an estimated 100,000 teacher shortage prior to the pandemic that resulted in teachers having to educate outside of their areas of expertise or positions remaining vacant. In Texas, there has been a 16-percent decline in new teachers.

High-need areas like bilingual and special education are suffering because of the lack of qualified teachers that the White House says is worsening. Moreover, the Biden Administration says it’s important that teachers reflect the communities they serve.

In Texas, 41 percent of teachers are educators of color, while children of color make up 73 percent of the state’s student population. 

The American Families Plan is investing $9 billion in teachers to address shortages, enhance teacher preparation, recruit teachers of color and leverage veteran teachers to support and train new educators.

Child Care

The average annual cost for toddlers in Texas is $9,400, which means that a two-parent household will spend more than 10 percent of their income on child care per year. Lack of access to affordable child care contributes to challenges women face in the workforce by contributing to the 26-percent gender gap in the state workforce population between working mothers and fathers.

In Texas, 48 percent of residents live in regions that do not currently meet the child care needs of the communities.

The American Families Plan will enable low- and middle-income families to pay no more than 7 percent of their annual incomes on high-quality childcare that the Biden Administration says will benefit more than 500,000 children in Texas under the age of 5.

Hourly wages for child care workers are currently about $10 and will be raised to at least $15. Those wages will also include compensation and benefits that are comparable to kindergarten teachers with similar qualifications.

Paid Leave

Data suggests that paid leave reduces racial wealth disparities, enhances child health, improves employee retention and also elevates women’s workforce participation. Across the country, more than 110 million workers do not have access to paid family leave. Almost 84 million people lack access to paid medical leave.

The lowest-wage workers, which are often women and people of color, have the lowest access to paid leave. For example, 95 percent lack paid family leave while 91 percent are without paid medical leave. 

National and comprehensive family and medical leave programs will be created by the American Families Plan to ensure workers are able to receive partial wage replacement from the government when caring for a critically ill loved one, dealing with a loved one’s military deployment, finding safety from sexual assault, stalking or domestic violence and healing from a person’s own serious illness. 

Child Nutrition

Almost 20 percent of children in Texas live in food insecure households while 34 percent of children in the state are obese. Investments from the American Families Plan will ensure that childrens’ nutritional needs are met through the expansion of free school meals to an additional 1,482,000 students by providing 3,654,000 children with resources to purchase food over the summer.

Health care

The Biden Administration plans to build on the Affordable Care Act to lower prescription drug costs, reduce premiums, lower the Medicare enrollment age to 60 years old, create a public option and close the Medicaid coverage gap in order to help people obtain health insurance.

The American Rescue Plan provides two years or reduced health insurance premiums to those who buy their own coverage and will make those premium reductions permanent. More than 600,000 uninsured people in Texas will gain coverage, while more than 1 million will save hundreds of dollars annually on their premiums. 

Most families stand to save $50 a month per person on health coverage.

Additionally, the American Families Plan supports maternal health and the families of veterans receiving health care services.

Tax Cuts 

In Texas, 15 percent of children under the age of 18 (1.1 million children) are considered poor. The investments from the American Families Plan stands to enhance financial security and stimulate economic growth in the state by reducing taxes on the middle class and those seeking to break into it. 

For example, the American Rescue Plan’s Child Tax Credit increases to $3,000 per child older than 6 and $3,600 per child under 6 through 2025. 

The credit will be fully refundable so low-income families may receive the same credit as middle-income families. The extension will positively affect more than 6 million children in Texas that includes 4.7 million children of color.

Child poverty in Texas is expected to be reduced by 44 percent.

Families and child care needs will be addressed by creating a permanent increase to the temporary Child and Dependent Care Tax Credit expansion. Families will receive a tax credit as much as half of their spending on child care for children under 13, meaning families stand to gain up to $4,000 for one child and $8,000 for two or more.

The 50-percent reimbursement will be made available to families earning less than $125,000 annually.

All families earning between $125,000 and $400,000 will receive a partial credit.

Additionally, the Earned Income Tax Credit Expansion for childless workers will be made permanent to support low-wage workers that will benefit 1.5 million people in Texas. Many of these workers are essential workers and 65 percent are people of color.

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