Posted at NOTE: Some changes have been made since this was written, including the addition of some paid leave and negotiation of some prescription drug prices.
Informational Analysis Blog by Marc Stier, Director, PA Budget and Policy Center
President Biden’s Build Back Better plan is an unprecedented and transformative plan to better the lives of all Americans—Black, brown, and white; those with low, moderate, or high incomes; the youngest children and the oldest seniors.
We have given an overview of the whole program—but here we want to focus on the many ways Pennsylvanians will be touched by the Build Back Better plan.
These preliminary estimates of the numbers of Pennsylvanians who will benefit from Build Back Better are from official government sources. Soon, we will be updating them with additional and more detailed estimates from policy analysts outside government.
How the Build Back Better plan helps Pennsylvania’s children and families
- Provides access to affordable child care. Child care is a huge burden for families in our state. The annual average cost of sending a young child to a child care center in Pennsylvania is $11,402. A family with two young children would, on average, spend 22% of their income on child care each year. The lack of affordable child care keeps women out of the job market, which is why the share of fathers in the workforce is 15 percentage points higher than the share of mothers. The Build Back Better plan will provide access to child care for 737,791 children up to the age of 5 for families earning less than 2.5 times the state median incomes—which is $241,946 for a family of four. These families will pay no more than 7% of their income on high-quality child care.
- Creates universal, high-quality, free preschool for every 3- and 4-year-old. Only 16% of the 244,279 3- and 4-year-olds in Pennsylvania have access to publicly funded preschool. Those who don’t have access to a publicly funded program pay $8,600 a year on average. The Build Back Better plan will enable the Commonwealth to expand access to free, high-quality preschool to more than 204,716 additional 3- and 4-year-olds per year and increase the quality of preschool for all children. Parents will be able to send their children to the preschool setting of their choice—from public schools to child care providers to Head Start. Research over the last twenty years has shown that quality pre-school education leads to lifelong benefits. Children who go to good preschools do better in school, are more likely to graduate from college, have higher incomes, and are also more likely to be married and stay married. Providing access to preschool to every child is a policy that’s critical to reducing economic and racial inequity in the next generation. Affordable preschool also allows more parents to work, leading to a bigger workforce that will encourage businesses to invest and expand in our state, leading to faster economic growth that benefits all of us.
- Extends the Child Tax Credit (CTC) increases of $300 per month per child under 6 or $250 per month per child aged 6 to 17. This will continue the largest one-year reduction in child poverty in history. And the agreement includes permanent refundability for the Child Tax Credit, which means that families with the lowest incomes will continue to receive the full Child Tax Credit over the long run. The impact of the CTC in Pennsylvania has been dramatic and will continue. The 892,000 children under 17 who were previously left out of the full $2,000 Child Tax Credit would now continue to benefit from it. The 140,000 children under the age of 18 who were lifted above the poverty line will stay above it. And the additional 171,000 children under 18 who were lifted closer to the poverty line would remain there.
How the Build Back Better plan will benefit the lives of Pennsylvania workers and families
In addition to programs that help families with children, the Build Back Better plan will help Pennsylvania workers and families in many other ways.
- Expands health care coverage and lower costs. Health care should be a right, not a privilege, and residents of Pennsylvania facing illness should never have to worry about how they are going to pay for treatment. The Build Back Better plan will close the Medicaid coverage gap to help millions of Americans gain health insurance, extend through 2025 the American Rescue Plan’s health insurance premium reductions for those who buy coverage on their own, and help older Americans access affordable hearing care by expanding Medicare. About 122,000 Pennsylvanians who remain uninsured will gain coverage and 125,800 who make up to 400% of the federal poverty line will save hundreds of dollars per year. About 140,000 Pennsylvanians benefitted from reduced premiums under the American Rescue Plan and will continue to do so under the Build Back Better plan. In addition, the Build Back Better plan will support maternal health and invest in national preparedness for future pandemics.
- Reduces housing costs and expand housing options. In Pennsylvania, 720,000 renters are “rent-burdened” which means they spend more than 30% of their income on rent. And homeownership remains out of reach for many families. The Build Back Better plan will expand rental assistance for Pennsylvania renters while also increasing the supply of high-quality housing through the construction and rehabilitation of over 1 million affordable housing units nationwide. It will address the capital needs of the entire public housing stock in our state and it includes one of the largest investments in down-payment assistance in history, enabling more first-generation homebuyers to purchase their first home. Down-payment assistance is a major step toward repairing the damage that redlining did in preventing Black families from accumulating wealth through home ownership.
- Provides food for children. About 15% of children in Pennsylvania live
in food-insecure households, which harms their long-term health and ability to succeed in school. The Build Back Better plan will provide access to free school meals to an additional 251,000 Pennsylvania students during the school year and enable 947,153 students to purchase food over the summer. - Reduces taxes for families and workers. The Build Back Better plan will extend the American Rescue Plan’s Earned Income Tax Credit (EITC) expansion. Before the EITC expansion, working adults who were not raising children only received a small credit. The ARP raised the maximum EITC for these “childless adults” from about $530 to $1,500. It also raised the income cap for them to qualify from about $16,000 to at least $21,000 and expanded the eligibility of childless workers to include younger adults aged 19-24 who aren’t full-time students as well as those aged 65 and over. About 66,000 low-wage workers received new or enhanced benefits under the EITC expansion and will continue to do so under the Build Back Better plan.
- Supports families with long-term care needs. The need for high-quality, accessible, and affordable care for older Americans and disabled Americans is growing, but too many have to rely on family for unpaid caregiving because the costs of paid care are too high. The Build Back Better plan will expand access to home- and community-based care to more of Pennsylvania’s seniors and disabled people. And, equally as important, it will improve the quality and wages of caregiving jobs.
How Build Back Better expands access to education and training
Education beyond high school will be more affordable and accessible. The average cost of a two-year degree in Pennsylvania is $5,625 per year and $15,312 per year for a 4-year degree making it difficult for many potential college students to get the education they want. The Build Back Better plan will increase the maximum Pell Grant awards by $550 for students at public and private nonprofit institutions, supporting the 160,211 students in Pennsylvania who already rely on the program and making college more affordable to those who cannot attend now. The framework will also invest in Pennsylvania’s 24 minority-serving institutions and their students, including historically black colleges and universities (HBCUs), tribal colleges and universities (TCUs), and Hispanic-serving institutions (HSIs).
Pennsylvania’s workers will have more access to training for the jobs of the future. The United States is second to last among the world’s largest economies in investing in workforce development, and funding for federal job training programs has dropped by almost half since 2001. The Build Back Better framework invests in training programs that will prepare Pennsylvania’s workers for high-quality jobs in fast-growing sectors like public health, child care, manufacturing, IT, and clean energy. Twenty public community colleges in Pennsylvania will have the opportunity to benefit from grants to develop and deliver innovative training programs and expand proven ones.
How the Build Back Better plan addresses the threat of climate change
From 2010 to 2020, Pennsylvania experienced 37 extreme weather events, costing up to $10 billion in damages. The Build Back Better framework plan puts the United States on course to meet its climate targets—a 50%-52% reduction in greenhouse gas emissions to below 2005 levels by 2030—in a way that creates good-paying jobs in unionized trades and clean manufacturing while reducing energy costs for every household. The plan will make the largest investment in our clean energy economy ever. It will transform buildings, transportation, industry, electricity production and transmission, and agriculture. The plan will create a new Civilian Climate Corps, an idea developed by the ReImagine Appalachia campaign which the Keystone Research Center helps lead. The new CCC will enlist a diverse generation of Pennsylvanians in conserving our public lands, bolstering community resilience, and addressing the changing climate, all while putting good-paying union jobs within reach. In clean energy and in other sectors, the Build Back Better plan will also strengthen domestic manufacturing and supply chains for critical goods, benefiting American businesses, workers, consumers, and communities.
Who will pay for the Build Back Better plan?
Not you—unless your adjusted gross income is over $10 million per year or you are a major owner of a corporation that has been avoiding paying corporate incomes taxes by taking advantage of tax loopholes.
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