NOTE: The Build Back Better framework released last week is currently being crafted into legislation and changes to the scope and scale will be updated or linked to at the top of this post.
The Build Back Better framework released last week by the White House is a chance to take a huge step forward to increase opportunity, reduce poverty, and shrink racial inequities for North Carolina children, families, and workers.
While we await a final agreement and legislative text, some things are already clear: The framework would spur a historic reduction in child poverty and a marked decrease in child hunger. It also would provide affordable, quality health coverage to millions of uninsured Americans. It would expand access to stable, affordable housing at a time when housing instability and homelessness is a reality for far too many in North Carolina. And it would strengthen families and help parents stay in the labor force by reducing the cost of child care and expanding free access to universal pre-K.
Together, these investments will narrow racial disparities that are rooted in our nation’s long history of racism and discrimination. Especially in light of the massive and mounting costs that have come due during the COVID-19 pandemic, the design of public investments must now center the needs of those most harmed and advance equitable outcomes and recovery.
The Build Back Better plan will address an array of problems that grew especially acute in North Carolina during COVID-19, by supporting the educational outcomes of children and the early education workforce behind the workforce, addressing housing affordability and health care access, bolstering the financial security of those with very low incomes, and mitigating the risks of climate disasters and public health emergencies. Consider the following figures:
- 47 percent of NC households that rent are cost burdened and the rental assistance as well as nationwide effort to build 1 million affordable rental units will provide near and systemic support to North Carolina households.
- 629,956 young children (ages 0-5) in families earning under 2.5 times the North Carolina median income (about $201,846 for a family of 4) will have access to affordable child care, and families will pay no more than 7% of their income on high-quality child care.
- 154,103 additional 3- and 4-year-olds per year will be able to access free, high-quality preschool, and the quality of preschool will increase.
- Access to free school meals will be expanded to an additional 307,000 students during the school year and 903,450 students will be provided with resources to purchase food over the summer, ensuring that the nutritional needs of North Carolina’s children are met.
- 388,000 uninsured people will gain coverage, including the 212,000 who fell into the Medicaid coverage gap, and 229,100 will save, on average, hundreds of dollars per year.
- 593,900 low-wage workers in North Carolina will be supported by extending the American Rescue Plan’s Earned Income Tax Credit (EITC) expansion.
- More than 924,000 children will gain access to the Child Tax Credit.
These critical investments are based on successful, sound policies in place in other nations and in some states. They will be fully paid for with provisions designed to make sure corporations and the wealthy pay more of their fair share in taxes. The framework will set a minimum corporate tax of 15 percent to address the avoidance strategies employed by many profitable corporations and puts in place a surtax on very high income individuals, while also closing loopholes and increasing collection capacity.
BBB will also extend the expansion of the Child Tax Credit and Earned Income Tax Credit that ensure families with low incomes have more dollars to support the basics. These expansions are already demonstrating positive impacts on hunger in North Carolina and, while their extension is only for one year, the Child Tax Credit’s poverty-fighting power is permanently enhanced because it is available to those with very low incomes.
In short, the proposal will create millions of good-paying jobs and lower costs for working families by making those at the top pay their fair share. It ought to be an easy decision.
But it should not be the end of the discussion as much more work is necessary.
For example, the establishment of a paid family leave program was eliminated in the final framework released last week though inserted back in the framework this morning providing opportunity to ensure that families can take needed time off without losing their job. Meanwhile, the life-saving role of paid sick days was not even contemplated. Necessary changes to unemployment insurance were similarly omitted despite clear evidence that our wage replacement policies are insufficient to keep people connected to the labor force and out of poverty. And the potential to address the harmful exclusion of immigrant families from support by connecting 8 million people to a pathway to citizenship that will support health and employment outcomes has yet to be agreed to despite its urgency to secure a full and just recovery.
In short, this is still legislation in development and beyond this framework there is more work to be done to ensure our collective commitments reflect the lessons of the past two years.
Right now it is time to move forward on the path to building back better.
Alexandra Sirota is the Director of the N.C. Budget & Tax Center.