The Biden Plan for Mobilizing American Talent and Heart to Create a 21st Century Caregiving and Education Workforce, announced on Tuesday, July 21
WHY IT MATTERS
As COVID-19 cases rise nationally, driving an economic crisis months ahead of the presidential election, and Congress deliberates a fourth federal relief package, Vice President Biden outlined the third of four pillars of his economic recovery agenda. Biden outlined his plan to enhance early education, caregiving, and long-term care in the United States, by rebuilding what he calls “the caring economy.” Biden described his plan as a key to national recovery and a way to build a more compassionate and responsive society.
Biden’s proposal calls for the U.S. to triple federal spending on education, increase compensation for essential caregivers, provide for universal access to preschool, and take care of seniors and poor families. The plan budgets $775 billion over the coming decade, “allocating $450 billion to give more people the choice to receive care at home or in supportive community situations, or to have that choice for their loved ones.” The plan will be financed by a rollback of tax breaks for real estate investors with incomes over $400,000 annually and an increase in tax compliance for high-income earners.
Biden’s speech focused on the societal benefits from this investment, including high-quality care for children and seniors, a social safety net, and increased flexibility for working households as a result.
- State, Local, and Tribal Support – According to Biden’s speech, he will close gaps in Medicaid for key home and community services and create a state innovation fund to create new caregiving solutions. The plan calls for an extra 150,000 community health workers in cost-effective roles, such as substance abuse and veteran care. The creation of a Public Health Jobs Corps, in partnership with states and municipalities, would provide communities with additional resources related to COVID-19 and other care work in the future.
- Expanded Caregiving Nationwide– Biden’s plan includes higher compensation for caregivers, collective bargaining protections, and a $5,000 tax credit and Social Security credits for informal caregiving. He announced a goal of 3 million additional caregiving workers and up to 12 weeks of paid family and medical leave to create a more flexible workforce. This is intended to increase overall employment by 5 million jobs nationwide.
- Robust Expansion of Childcare – Biden stated that tax credits for childcare would result in an average savings of $8,000. He added that families would not pay more than 7% of their income for childcare for children under five and that “most working families won’t have to spend a dime.” He proposed that the creation of tax credits for businesses would incentivize the construction of more childcare facilities.
- Universal Preschool – Biden argued for a three time increase to federal funding for schools, with universal access to preschool through a mixed delivery system in partnership with states. After-school, weekend, and summer care would be provided for through Child Care Development Block Grant subsidies. Furthermore, educators would be compensated with increased pay and benefits and collective bargaining protections, as well as training and career options.
This plan touched on everything from long-term care to childcare, and from universal pre-K to growing the caregiving workforce development. By design, it is meant to appeal to a wide range of constituencies across generations and economic levels – including important voter blocs such as aging baby boomers and parents of young children with heavy financial commitments to student loans and childcare bills. With the backdrop of COVID and the uncertainties the virus has placed on the already fragile care infrastructure in America, it seeks to address very real problems felt by many of the people Biden is hoping to draw to the polls on election day.
But the vast majority of this plan will require congressional support, state buy-in, and huge sums of federal spending. Any one of those is a hurdle to prevent much of this from becoming reality.
- Congressional support: It has been perennially difficult under Administrations of both parties to pass increased federal funding for Medicaid and grant dollars for states. Republicans generally push for greater restrictions and oversight on spending. Without a super majority in the Senate, it is extremely unlikely that Congress will cut massive checks to eliminate Medicaid service waitlists, hire additional health workers, increase access to childcare, and train caregiving professionals. The proposed changes to the tax code to help offset costs and eliminate barriers to hiring and retention at the VA are more likely to be effectuated.
- State support: Many of these proposals require state collaboration. We are watching COVID like the rest of you – and it is abundantly clear that not all governors agree on how to solve a problem. Each state has its own issues and budget constraints, which will not necessarily align with the agenda of the federal government. However, like Medicaid expansion under the Affordable Care Act, which has been adopted by nearly 80% of states, states may be inclined to take advantage of new Medicaid funding. The adoption of Medicaid expansion is proof that Americans want expanded services and that fiscal concerns about expansion of social services does not always match up with the needs of everyday Americans.
- Federal funding: The proposals Biden has laid out (and those yet to come) cost hundreds of billions of dollars. Even with the proposed offsets, there is not enough money for all of these. A Biden Administration is going to have to pick and choose between the policies it is presenting. Layer onto that the huge sums spent managing COVID and the resulting impact on interest rates and the strength of the dollar may keep deficit spending in check for some time.
This is the third of four economic policy announcements from the Biden campaign, all components of what the Vice President is calling the “Build Back Better” agenda. The first two focused on spurring manufacturing in the U.S. and a climate-friendly, sustainable economy. We expect a fourth announcement, likely to be focused on racial equity.