Personal finance

Biden touts more aid for families with children in his State of the Union address. It’s unclear if any of it will happen

President Joe Biden delivers the State of the Union address before a joint session of Congress on March 1, 2022 in Washington.
Pool | Getty Images News | Getty Images

In his Tuesday State of the Union address, President Joe Biden outlined several ways he wants to extend aid to low- and middle-income families, especially those with children.

A timeline on more help is unclear, however.

Many of the proposals Biden mentioned are continuations of his American Rescue Plan, signed into law last year. The pandemic-era aid, he said, “gave people just a little bit of breathing room.”

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The proposals

One of Biden’s plans is to reduce the expense of childcare, which he said costs the average family in most major cities $14,000 per year per child.

His legislation would cut that in half for many families, freeing up parent incomes and potentially helping the millions of women who dropped out of the labor force during the pandemic due to childcare issues return to work.

Biden also called to raise the federal minimum wage to $15, something Democrats have long pushed. The federal minimum wage is currently $7.25 and hasn’t been updated in more than a decade, though many states have set their own minimum wages higher.

Biden also said he wants to extend the enhanced child tax credit, which in 2021 gave families with eligible children a larger benefit including monthly advance payments. Those payments were shown to lower financial anxiety and help families with essentials such as groceries, rent and utilities and clothes for their children.

He also mentioned continuing support of community colleges.

Timeline unclear

Of course, many of these proposals were also included in Build Back Better, Biden’s $1.75 trillion economic plan that was halted in December when Sen. Joe Manchin, a Democrat from West Virginia, said he would not vote for the plan.

One of Manchin’s sticking points was the enhanced child tax credit, which last year expanded eligibility even to parents who did not have earned income. Manchin said that he wouldn’t support the extension of the enhanced credit unless it included a work requirement.

Currently, Utah Republican Senator Mitt Romney is working on a child tax credit proposal that would include work requirements and that he hopes could garner bipartisan support.

In addition, Democrats initially included raising the federal minimum wage to $15 an hour in the American Rescue Plan but dropped the measure when the Senate parliamentarian said that it could not be included in a budget reconciliation package, which is how the legislation was passed.

Biden has been able to raise the minimum wage for all federal workers to $15, which went into effect this year. Still, there’s been little movement on the overall federal minimum wage.

These roadblocks make passage of legislation including these measures unclear. In January, Biden said that he wasn’t sure that he would be able to pass Build Back Better with two important parts — the child tax credit and help for the cost of community college.

He said then that he hoped the plan could be passed in chunks, but there still isn’t a timeline or stand-alone legislation in the works on every issue that could conceivably pass the House and the Senate.

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