How the American Families Plan Would Benefit LGBTQI+ Households
The Biden administration’s American Families Plan (AFP) represents a historic investment in making child care more affordable, strengthening the U.S. workforce, reducing the cost of health insurance, combating hunger, and increasing access to education. If passed by Congress, the AFP would help promote the economic security of millions of Americans, including low- and moderate-income LGBTQI+ families across the country.
LGBTQI+ communities experience disproportionate economic difficulties; high rates of poverty, housing insecurity, and unemployment; and significant vulnerability to homelessness and food insecurity. Institutional and systemic discrimination also negatively affect the financial well-being of LGBTQI+ households. For LGBTQI+ people living at the intersection of multiple identities, such as LGBTQI+ people of color, these disparities and challenges are even greater. While these socioeconomic inequalities existed long before the COVID-19 pandemic, the pandemic has exacerbated them.
This column highlights several important ways in which the AFP’s $1 trillion in spending and $800 billion in tax cuts would benefit and promote greater economic security among LGBTQI+ families, particularly those with low and moderate incomes. It also offers recommendations for how Congress can and should act to strengthen these policies and investments.
Key provisions and benefits of the American Families Plan
Supporting children and families
In addition to investing $200 billion in free universal preschool for all 3- and 4-year-olds, the AFP would invest $225 billion to increase access to affordable child care for low- and middle-income families with children under age 5. Specifically, the plan fully covers child care costs for low-income working families and ensures that families earning 1.5 times their state’s median income will pay no more than 7 percent of that income toward child care. The plan permanently increases the temporary child and dependent care tax credit (CDCTC), ensuring families receive a tax credit for up to half of their spending on qualified child care for children under age 13, up to a total of $4,000 for one child or $8,000 for two or more children; the AFP would also make the CDCTC refundable, so that low- and moderate-income families who have child care expenses can benefit from it.
In addition, the AFP would make crucial changes to the child tax credit (CTC), a federal tax credit designed to assist families with the costs of raising children. Specifically, the AFP makes permanent the American Rescue Plan Act’s (ARPA) provision making the CTC fully refundable and extends through 2025 the ARPA’s maximum credit increases and expansion of the credit to cover 17-year-olds. To continue to reduce childhood poverty, which is a common pathway to poverty among LGBTQ adults, Congress should act to make permanent both of these tax credit improvements and make children with Individual Taxpayer Identification Numbers eligible for the CTC. These changes would be welcomed by many LGBTQI+ people with children, including the estimated 11 percent of cisgender gay men, 31 percent of cisgender lesbian women, 30 percent of cisgender bisexual men, 45 percent of cisgender bisexual women, and 33 percent of transgender people who have a child or children in their households.
The proposed bill invests $225 billion over a decade to create a comprehensive national paid family and medical leave program. The new program would guarantee workers 12 weeks of paid leave by its 10th year so that they can recover from a serious health condition, “bond with a new child, care for a seriously ill loved one, deal with a loved one’s military deployment, find safety from sexual assault, stalking, or domestic violence … or take time to deal with the death of a loved one.” Workers would receive up to $4,000 per month while on leave, with a minimum of two-thirds of wages replaced and a maximum of up to 80 percent of wages replaced for the lowest-wage workers. Evidence demonstrates that paid family and medical leave can help reduce racial disparities in wage loss and support workers with disabilities. Crucially, the plan’s definition of family is inclusive of chosen family—individuals with “close bonds akin to those traditionally thought to occur in relationships with blood or legal ties.”
Many LGBTQ+ people rely on chosen family for caregiving support. According to a nationally representative survey from the Center for American Progress,* 29 percent of LGBTQI+ respondents reported that they would be most likely to turn to a partner to whom they are not legally married for care if they needed to “take time off work for health-related reasons”; one-third of LGBTQI+ respondents reported they would be very likely to rely on friends or chosen family members for support when experiencing a “health-related need”; and 63 percent of respondents who were working reported having been called on for support by a close friend or chosen family member experiencing a health-related need. Yet only two-thirds of working LGBTQI+ adults reported having access to paid family or sick leave through their employer. As Congress moves the AFP through the legislative process, it must ensure that the law includes a comprehensive paid family and medical leave program with an inclusive definition of family and a guarantee of job protection for workers taking paid leave, especially when they do so to care for chosen family.
The AFP also proposes crucial changes to the earned income tax credit (EITC) that will provide income support to approximately 17 million low-wage workers, a segment of the workforce where LGBT communities are overrepresented. Specifically, the AFP makes permanent the ARPA’s tripling of the EITC to just more than $1,500 for low-wage working adults not raising children in the home, raising the income phaseout for these adults so that single filers earning up to $21,427 and married filers earning up to $27,367 can benefit. The original phaseout was $15,980 for single filers and $21,920 for married filers. The bill also expands the age range of eligible workers to adults ages 19 to 24, excluding full-time students, and adults ages 65 and over, while dropping the age limit to 18 for qualified former foster youth and qualified homeless youth, two populations where LGBTQ+ people are overrepresented. These changes address a longtime flaw in the EITC for workers not raising children in the home for whom the tax credit is too small to fully offset federal taxes. For example, under current law, a 25-year-old single LGBTQI+ person without children working roughly 30 hours per week in a retail job for a little more than $9 per hour in 2021 earns $14,300 annually—just above the poverty line. This person would have received a small EITC of about $128 before the passage of the ARPA but seen their income level fall below the poverty line once federal income and payroll taxes were accounted for. Under the ARPA, their EITC increases to $1,092, raising their income above the poverty line even after federal income and payroll taxes. By making permanent the ARPA’s changes to the EITC, the AFP stands to positively affect approximately 5.8 million workers not raising children in the home whom the current federal tax system is pushing into or deeper into poverty. Congress should act to make these policy changes permanent.
Additionally, the AFP would increase the minimum wage to $15 for early childhood workers and ensure those with similar qualifications receive comparable benefits and compensation; this is essential given that early childhood educators are often making poverty wages. The AFP would also invest in job-embedded coaching and professional development and calls on Congress to double scholarships for future teachers from $4,000 to $8,000 as they earn their degree, as well as expand scholarships to early childhood educators. These actions represent important steps to better support teachers across the country who are often underpaid and underinvested in, including the approximately 1 million LGBTQ people who work in K-12 education.
Improving affordability of health insurance
The AFP would invest $200 billion to permanently expand the ARPA’s provision of lower health insurance premiums for those who purchase coverage on the Affordable Care Act (ACA) exchanges, lowering the cost of health insurance and promoting gains in coverage for millions of Americans. Increasing coverage and improving affordability will benefit LGBTQ+ people, who experience disparities in health status and access to health care and for whom cost of care remains a significant barrier. Indeed, CAP’s survey found that 29 percent of LGBTQI+ adults, including more than half of transgender people, reported postponing or not seeking out necessary medical care when sick or injured because of the cost, while 24 percent reported postponing or not receiving preventive screenings due to cost. For context, a 2019 survey by the Kaiser Family Foundation found that approximately 11 percent of adults overall reported delaying or going without medical care due to cost. Ultimately, the AFP’s changes will benefit many Americans, including LGBTQI+ people—particularly LGBTQI+ people of color—who have made significant gains since the ACA’s passage but have been severely affected by a pandemic that has increased the need for health care while spurring an economic crisis that undermines one’s ability to pay for it. While the pandemic did not cause as large of an increase in uninsurance as expected, making the coverage provisions of the ARPA permanent is a necessary step to maintain the gains made since its passage.
The AFP expands and makes permanent the Summer Electronic Benefits Transfer program for low-income families with children eligible for free- and reduced-price meals; enables more schools in high-poverty districts to offer meals free of charge to all their students through community eligibility; and supports re-entry for formerly incarcerated individuals by expanding eligibility for the Supplemental Nutrition Assistance Program (SNAP). Experiences of anti-LGBTQI+ discrimination in employment and housing create significant barriers for LGBTQI+ people to attain economic security and adequate living standards, driving disproportionate poverty rates, especially among LGBT people of color. Indeed, according to a 2019 report by the Williams Institute, LGBT people had a poverty rate of 21.6 percent, while cisgender straight people had a poverty rate of 15.7 percent.
To meet their basic needs, LGBTQ people and their families are more likely than their non-LGBTQ counterparts to seek access to and use public programs and federal benefits, including SNAP. According to the Federal Reserve Board’s 2019 Survey of Household Economics and Decisionmaking, LGBT households were twice as likely to receive SNAP benefits as non-LGBT households (14.6 percent compared with 7.8 percent), with rates highest among Black (21.9 percent vs. 15.8 percent) and Hispanic (20.5 percent vs. 12.3 percent) households. The pandemic has only increased the number of households across the country struggling to put enough food on the table. In addition to adopting these policies, Congress should act to extend the temporary benefit enhancements implemented in response to the COVID-19 pandemic that are due to sunset shortly, as well as continue to consider long-term adjustments to benefit amounts and eligibility guidelines to better serve people experiencing hunger and food insecurity.
Increasing access to postsecondary educational opportunities
The AFP would invest $109 billion to “ensure that first-time students and workers wanting to reskill can enroll in a community college to earn a degree or credential for free,” contingent on the number of states that participate. The bill also proposes increasing the maximum Pell Grant awards by about 20 percent to $14,000 per year to help low-income students seeking a certificate or a two- or four-year degree. Notably, the AFP allows Dreamers to access these opportunities, including the estimated 81,000 LGBT Dreamers. These investments will increase affordability and improve access to educational opportunities for LGBTQ+ families with children, particularly those in low-income households.
The AFP would make robust investments to make child care more affordable, support U.S. workers, reduce the cost of health insurance, combat hunger, and increase educational opportunities, and these investments will directly benefit LGBTQ+ households. Congress has a responsibility to build on this policy blueprint and provide support to improve the well-being of low- and moderate-income LGBTQ+ individuals and families across the country.
Caroline Medina is a policy analyst for the LGBTQ Research and Communications Project at the Center for American Progress.
* Data are from a nationally representative survey of 1,528 LGBTQI+-identifying individuals, jointly conducted in June 2020 by the Center for American Progress and NORC at the University of Chicago.
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