Biden's State of the Union: 3 Key Plans for Working Families

Here are some important plans you should know about.

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Key points

• President Biden shared some lofty goals when he addressed the nation on March 1.
• Here are three objectives concerning the minimum wage, childcare costs, and the Child Tax Credit.

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On March 1, President Biden spoke to Americans in his State of the Union address. Unsurprisingly, the president touched on a number of key topics like overseas conflict and infrastructure. But he also made a point to discuss the financial burden a lot of families are facing right now.

These days, many households are struggling to make ends meet due to rampant inflation. And those without savings to fall back on may be rapidly racking up debt just to stay afloat.

Biden had some specific suggestions that could help working families shore up their finances. Here are three he highlighted.

1. Raising the minimum wage

The federal minimum wage is currently sitting at $7.25. Not only is that not a livable wage for many families, but that figure hasn't budged in over a decade.

To be clear, some cities and states have their own minimum wage requirements that are higher. But at the federal level, the $7.25 hourly wage is still in play, and it's putting a lot of workers in a position where they'll never get ahead financially. Biden plans to keep pushing for a $15 federal minimum wage.

2. Reducing childcare costs

Childcare is a huge expense for many working families. Recognizing the financial burden it places on a lot of households, Biden is aiming to reduce the expense of childcare, which he acknowledged costs the average family $14,000 a year in major cities.

Biden was firm that middle-class families should not have to spend more than 7% of their income on childcare. It's a little unclear as to how he'll manage to reduce childcare costs or implement subsidies, but it bodes well that the issue is on his radar.

In fact, Biden's plan could actually cut the cost of childcare in half for most families. It could also help people who dropped out of the workforce during the pandemic due to childcare constraints get back in. In turn, that could help solve the major labor shortages so many companies are grappling with today.

3. Extending the boosted Child Tax Credit

Last year, the maximum value of the Child Tax Credit rose from $2,000 to $3,000 for children aged six to 17 and $3,600 for children under age six. The credit was also made fully refundable, so a family with no tax liability could collect its share in full. Plus, half of the credit was paid in the form of monthly installments that hit bank accounts early, from July through December.

Biden initially wrote a one-year extension of the boosted Child Tax Credit into his Build Back Better bill, which has stalled in the Senate. But the president hasn't given up hope on extending the enhanced credit, which helped pull millions of children out of poverty last year.

It's clear that President Biden recognizes the plight of working families today. With any luck, some or all of these plans will come to fruition in time, so working Americans can secure their finances and have an easier time recovering from the impact of the COVID-19 pandemic.