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    Trump and Harris Embody a Stark Partisan Divide on Fighting Poverty

    The two presidential candidates can both point to records of pushing poverty rates down, but their approaches could hardly be more different.Follow the latest updates on the Harris and Trump campaigns.The presidential race between Vice President Kamala Harris and former President Donald J. Trump presents the sharpest clash in antipoverty policy in at least a generation, and its outcome could shape the economic security of millions of low-income Americans.As the onset of the pandemic in early 2020 threatened to decimate the economy, Mr. Trump signed a large stimulus package that included substantial aid for the poor. When President Biden and Ms. Harris took office in 2021, their administration pushed more big aid expansions through Congress as part of their pandemic-recovery plan, driving the poverty rate still lower.But if the two candidates’ responses to that extraordinary period had elements in common, the lessons they took from it were very different.In the pandemic-era programs, now mostly expired or reduced, Ms. Harris and other Democrats found reinforcement of their faith in the government’s power to ameliorate hardship. If elected, she would seek to sustain or expand many of them, including subsidies for food, health care and housing, and revive a change to the child tax credit that essentially created a guaranteed income for families with children. Those policies helped temporarily cut the poverty rate by more than half from prepandemic levels.She backs a $15 federal minimum wage, which Republicans have fought, and is a vocal supporter of programs like subsidized child care and paid family leave meant to help balance work and family.Mr. Trump says little about his role in pandemic-era poverty programs, which many Republicans view as having been excessive and fraud-ridden. Instead, he touts his 2017 tax cuts, which he credits for boosting the economy and reducing poverty to a prepandemic low, and he has vowed to extend them when they expire next year. Most of the direct benefit from those cuts went to corporations and the wealthy.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Care Policies Take Center Stage in Harris’s Economic Message

    The Democratic nominee says she wants to make raising a family more affordable. But she has provided few details on her proposals.The “care economy” — a broad set of policies aimed at helping parents and other caregivers — was the great unfinished work of President Biden’s domestic agenda. Vice President Kamala Harris has made it a central aspect of her campaign to succeed him.Ms. Harris, the Democratic nominee, has spoken frequently on the campaign trail about making it more affordable to raise children. She chose a running mate, Gov. Tim Walz of Minnesota, whose signature policy accomplishments include the creation of a paid family leave program.In the first major economic speech of her campaign, she proposed restoring an expanded child tax credit and called for a new $6,000 benefit for parents of newborns. She also laid out policies that aim to reduce housing costs, such as providing up to $25,000 in down-payment assistance to first-time home buyers.In her speech accepting the Democratic nomination on Thursday, Ms. Harris said she would not let conservatives end programs like Head Start that “provide preschool and child care for our children.”But Ms. Harris has not yet offered specific proposals on child care, paid family leave or early childhood education. That has surprised some progressive policy experts, and brought flashbacks of the Biden administration’s inability to enact more sweeping policies.Mr. Biden also initially made the care economy a central piece of his domestic policy agenda, putting it alongside proposed investments in roads and bridges, domestic manufacturing and green energy. His aides often argued that care was a form of infrastructure — that affordable child care, like highways, was essential to a well-functioning economy.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    When Private Equity Came for the Toddler Gyms

    Tiffany Cianci spends most of her days in socks, padding around the fitness studio she operates in Frederick, Md., about an hour outside Washington. Her clients are young: kids ranging from 4 months to 12 years old. They come to learn somersaults, try the monkey bars, sing some songs. (“Little Red Caboose,” complete with a train whistle accompaniment, is one of her favorites.)Ms. Cianci, 41, spent the first part of her career as a sommelier, specializing in sake. In 2017, wanting to leave the hospitality industry for something that allowed her to spend more time at home, she and her husband bought their facility as part of a franchise chain called The Little Gym. Its slogan: “Serious fun.”They got what generations of franchise owners have gotten out of similar deals, with brands like McDonald’s or Jiffy Lube: a known brand name and detailed business plans in exchange for an initial fee and a cut of the revenue. For Ms. Cianci, it was more than just a business.“I love it. I really love it,” said Ms. Cianci, a mother of three who studied dance. “I love my students, and I love that it lets me make a difference.”In the last year and a half, since The Little Gym was acquired by a private equity-backed firm called Unleashed Brands, her work has felt far less idyllic.According to legal filings, internal documents, and interviews with more than half a dozen other franchisees — most of whom requested anonymity so as to avoid retaliation — Unleashed began to demand higher fees and institute more stringent requirements, which the independent owners thought would threaten their profits. The day after Ms. Cianci organized her fellow franchise owners into an association to push back against the changes, the corporate office told her it was terminating her license on the grounds that she was chronically late in paying her fees. Given the timing, Ms. Cianci maintains in the legal filings that it constituted retaliation.Tiffany Cianci, the owner of Teeter Tots, is fighting a court battle against Unleashed Brands, which bought the company that originally franchised her business.Lexey Swall for The New York TimesAlong the way, Unleashed Brands surveilled Ms. Cianci’s business with undercover shoppers, met with her landlord and disparaged her to fellow franchisees. When she tried to salvage her business under a new name — it’s now called Teeter Tots Music n Motion — the company sued, accusing her of violating its trademarks and a noncompete clause in her franchise agreement.The episode has plunged Ms. Cianci about $300,000 into debt and enmeshed Unleashed in a nasty court battle not long after it acquired multiple new brands. The outcome will be a test of just how much a franchisor can unilaterally change the rules of a business relationship that has served as an on-ramp to entrepreneurship for hundreds of thousands of people.The legal fight — along with two others Unleashed has faced with franchisees at its other brands — also reveals the challenges of applying the private equity playbook to the unique world of franchises.Private equity has notched decades of high returns for investors by following a well-worn strategy: acquire distressed or undervalued companies or real estate, increase profits and then sell them. Greatest hits include foreclosed homes, highway rest stops and coal mines bought out of bankruptcy.Franchising has become one of private equity’s targets du jour. According to the research firm FRANdata, the number of franchise brands acquired by private equity firms and other investors rose from 52 in 2019 to 149 in 2021 and was on track to nearly equal that total in 2022.Private equity firms tout their ability to bring new ideas, technologies and efficiencies, and franchises, financially weakened by the pandemic, appeared ripe for those kinds of changes.But the reality is not so straightforward. The nation’s franchisees — 237,619, according to FRANdata — like Ms. Cianci, think of themselves as independent small businesses, who have often sunk their life savings into the enterprise. That’s why Little Gym owners are resisting Unleashed’s attempts to squeeze their profits to pad its own.Unlike, say, factory workers, who can be laid off at will, franchisees are supposed to be protected by legal documents that prescribe a certain business model for years at a time. Moreover, Unleashed — and its investors — need franchisees to stay motivated so they can keep generating revenue and recruit others to keep expanding the franchise system.Ms. Cianci, who is now in arbitration with Unleashed Brands, has been working to change state laws to better protect franchisees who might find themselves in her position down the line. The Federal Trade Commission, meanwhile, is reconsidering federal regulations on franchisors, which haven’t changed for more than a decade.Direct inquiries to Michael Browning Jr., Unleashed’s chief executive and founder, and other executives were not returned. Instead, a public relations firm answered detailed questions via email, saying the company’s changes have improved business across the board. “The financial impact and franchisee benefit of these efforts is undeniable,” the spokesman wrote.Many of the changes, however, are simply not what franchisees say they’d signed up for.“What this reflects is a conflict between the private equity firm that bought this and what they actually bought,” said Francine Lafontaine, an economist at the University of Michigan who specializes in franchise relationships. “In their due diligence, they didn’t seem to think too much about who they were going to be working with once they owned this chain.”‘Candy Land board of life’Ms. Cianci helps Mariah Strawley move her daughter, Brynlee Strawley, 19 months, through an obstacle course during a class.Lexey Swall for The New York TimesMr. Browning, the son of a real estate developer with a background in health care investing, viewed The Little Gym as a perfect part of his vision: He was building a conveyor belt of activities for kids.Mr. Browning spent the 2010s building a franchise called Urban Air, a chain of trampoline parks where parents could spend $700 on a birthday party to remember for their seventh grader. The venture was staked by Mr. Browning and his father and eventually Urban Air formed Unleashed.Private equity was also interested in the Brownings’ growing business. While a company spokesman did not clarify the company’s relationship with private equity, on the websites of the private equity firms AHR Growth Partners, Mantucket Capital and MPK Equity Partners, Unleashed or its brands are listed among their current or recent investments.In 2021, Mr. Browning decided to scale up, following a hot new trend in private equity: building “platforms” to consolidate several brands in a similar industry that could then cross-sell a range of services to their customers, as well as sell more franchises to their existing franchisees. Mr. Browning would often mention Neighborly, a roll-up of home services offerings that had been bought by the private equity giant KKR, as his model.“If I have five home services brands, I can pitch all those services to the same customer,” said Ritwik Donde, senior research analyst at FRANdata, which helps investors vet potential acquisitions. “Those complementary systems lower the cost of customer acquisition. ”Mr. Browning’s company, Unleashed Brands, began buying other youth enrichment chains. Parents — always moms, in Mr. Browning’s conception — could then spend money at his companies from the birth of their kids through high school graduation.Ms. Cianci was immediately skeptical of Mr. Browning’s vision for rapidly collecting children’s services and integrating their sales, operations and marketing.“That might be OK when you’re cleaning a dryer vent, but it’s not when you’re throwing around a 4-month-old and you need them to be safe,” Ms. Cianci said. “He was moving faster than he would need to get to know the business.”Ms. Cianci helped organize a group of Little Gym franchisees to contest some new requirements imposed by Unleashed Brands.Lexey Swall for The New York TimesTo kick off the new program, Unleashed invited all of its newly acquired franchisees to a conference in Orlando in October 2021, including Little Gym’s approximately 175 owners. The company rented out the Wizarding World of Harry Potter and held a fireworks show. And Mr. Browning treated attendees to a speech he called “vision casting,” in which he articulated his plans for building a family of children’s brands that families could spend money on from birth to age 18.The “Candy Land board of life,” he called it. He promised new tech tools that would make their lives easier. “Auto-magic,” he called it.Changes didn’t take long. Within weeks, long-tenured headquarters employees started leaving. In conversations with franchisees across the country, numerous owners expressed frustration that the support they depended on had evaporated; instead of calling a trusted adviser whenever they wanted, they had to file an online ticket. (Unleashed said that it “never sought to cut access” to its staff and that the ticket system was instituted to make sure they were responding in a timely fashion.)The company tried to impose a new payroll vendor that caused unending headaches. Certain activities, such as karate, were eliminated as Unleashed acquired businesses with similar programming; the company said it trimmed services with low enrollment to “streamline” the offerings. The company also outlined a process by which franchisees could lose their licenses if they failed to meet brand standards, which set a sour tone among some of the operators. To people who’d just made it through a pandemic and operated on thin margins even in good times, the changes felt unnecessary and destabilizing.In the fall of 2021, the company required all franchisees to sign a new agreement allowing Unleashed to automatically debit their bank accounts. Ms. Cianci noticed that it also contained broad language allowing the company to extract any other fees that might be owed, which she believed went beyond her franchise agreement.Under the advice of a lawyer, she refused to sign it and started to send her royalty payments via paper check. But she worried that most franchisees would simply accept the new arrangement, along with another requiring them to use — and pay for — a shared call center.To sound the alarm to others, Ms. Cianci held conference calls, often with a lawyer present. As concerns spread, in May a group of Little Gym franchisees formed the Happy Handstands Franchisee Association, which ultimately reached more than 90 percent participation from across the system. Ms. Cianci was elected president. The company started sending warning notices to franchisees who hadn’t signed the new agreements.On May 19, 2022, Happy Handstands’ lawyers sent Unleashed a cease-and-desist letter on behalf of the membership. The very next evening, an email popped up saying Ms. Cianci’s franchise had been terminated. When she tried to check it, her email account was gone, too. Unleashed said the company didn’t know she was the association’s president when they decided to terminate her. Ms. Cianci said it was widely known across the system and mentioned in a Facebook group visible to lower-level corporate executives.To save her business, Ms. Cianci went before an arbitrator and filed for a preliminary injunction decrying the termination as retaliatory; the arbitrator ruled that she hadn’t cleared the high legal bar necessary to stop the process. After that, she started tearing down all her Little Gym branding and adapting her curriculum so as not to violate the company’s trademarks. She paused when Unleashed’s lawyers wanted to discuss a settlement, which she said she rejected over its harsh terms. When they demanded she finish the process of “de-identifying” as a Little Gym immediately, she had difficulty getting started again because she had surgery on a broken foot.In June and July, the company sent undercover shoppers, including one who was a licensed private investigator, who posed as parents and asked Ms. Cianci’s employees what kinds of lessons they offered and whether they overlapped with The Little Gym’s programming. In early July, Unleashed, with the help of outside counsel DLA Piper, sued her in the superior court of Arizona for Maricopa County, where The Little Gym is based. The company accused her of failing to eliminate all branding fast enough, offering declarations from the investigators as evidence — the color scheme looked the same, for example, and a Wi-Fi network was still “TheLittleGym,” password “SeriousFun.”Soon after, the company’s lawyers also visited her landlord in Frederick, which Unleashed said was “part of a standard process to inquire as to the status of the lease.” According to Ms. Cianci’s notes from her subsequent conversation with the landlord, the lawyers told him that she was in legal trouble and wouldn’t be able to keep paying rent.Her landlord then sent her a letter, which was filed as evidence in court, declining to renew her lease and demanding more than $275,000 in back rent, including real estate taxes, most of which Ms. Cianci thought had been forgiven during the pandemic. Unleashed then exercised its option to take over the lease, although the building remains empty. (Her landlord declined to comment.)In mid-July, Unleashed Brands’ chief legal officer, Stephen Polozola, sent all Little Gym franchisees an email titled “Friendly Reminder on Confidentiality.” In it, without naming Ms. Cianci, he warned them not to share any information with a certain former franchisee, who he said had been terminated for not paying royalty fees on time.Further, he wrote that the company had received reports from “no less than seven” former employees who said that the unnamed franchisee had underpaid them and created a hostile work environment. The email finished with a grainy screenshot of a Facebook post containing a vulgar message that Mr. Polozola said had come from that same franchisee but didn’t have her name attached.The battle has put Ms. Cianci about $300,000 in debt and enmeshed Unleashed in a nasty court battle just as it tries to get its investment strategy off the ground.Lexey Swall for The New York TimesMs. Cianci, who had taken her son to a water park for his birthday, immediately started getting messages from other franchisees. None of it was true, she told them. As she would detail in court documents, the company allowed late payments for nearly all franchisees during the pandemic, and her gym had been closed by local ordinance for longer than most. She had continued to send her royalties in the mail, even after she refused to sign Unleashed’s new payment form, she said, and she was current on all her accounts when she was terminated. And the inappropriate Facebook post? She said she hadn’t written it.The allegations by Ms. Cianci’s former employees that Mr. Polozola referred to in his “friendly reminder” email sprang from messages that were sent by the workers in April 2021, before the Little Gym changed hands. After an investigation, no action was taken. The Unleashed spokesman said the company had relied on Ms. Cianci’s assurance that she would resolve the matter with the Maryland Department of Labor. Ms. Cianci said she made no such assurance.In response to an inquiry from The New York Times, the Department of Labor provided records showing a total of five complaints against Ms. Cianci for unpaid wages since 2017, two of which she resolved by paying her former employees; two were dropped; and one is still pending.But the emails from the former employees, which Unleashed supplied to The Times in unredacted form, detail complaints other than unpaid wages — such as dealing pills and mistreating children — that would seem to merit more immediate action by corporate headquarters, and which Ms. Cianci strongly denies.In late summer of 2021, when one of the former employees contacted Unleashed again, Mr. Polozola told Ms. Cianci to ignore it, according to an email exchange she provided — until he brought the complaints back up to discredit her nearly a year later.Arguing that such tactics seemed far outside the norms of legal practice, in September Ms. Cianci’s team filed a defense of so-called unclean hands, making the case that Unleashed Brands’ conduct had so tainted the proceedings that the judge should rule in their favor.But their motion never went anywhere. Before the judge could rule on it, Unleashed filed to dismiss its own case, arguing that its complaint that Ms. Cianci was essentially operating an unauthorized Little Gym was moot because her landlord had evicted her.The upshot of all this legal wrangling is that the fight between Ms. Cianci and Unleashed continues in arbitration in Arizona. In arbitration, potential damages are more limited, proceedings are sealed, and no precedent is created for other cases.Unleashed is fighting to stop Ms. Cianci from running what it says is a competing gym. Ms. Cianci is fighting for the chance to keep her new business and recoup the hundreds of thousands of dollars she has now spent on lawyers.One of them, Peter Lagarias, began his career at the F.T.C., enforcing the agency’s then-new franchise rule in the late 1970s, and spent most of his career advocating for franchisees both in the courtroom and the California statehouse. He took her case for a low rate, but arbitrators, whose cost must be split by both parties, can run tens of thousands of dollars, too.“They don’t want money,” Ms. Cianci said of Unleashed. “They want to destroy my life.”‘You can’t treat every business the same’Bill Walenda, 55, also got into running Little Gyms as a second career. After years as a financial planner, he wanted to buy a franchise — maybe a McDonald’s or a Dunkin’ Donuts — and his wife suggested The Little Gym, since he loved working with children. He opened a gym in New Jersey in 2002 and bought another in Illinois in 2009.After Ms. Cianci’s franchise was terminated, the Happy Handstands Franchisee Association fractured over strategy. Another group of owners started an association with a different approach: working “collaboratively” with the corporate office to provide feedback on changes. Mr. Walenda was elected president, and he has had limited success.He has been fighting a new point-of-sale system with a credit card processor controlled by Unleashed, which franchisees say is keeping customer payments for more than a week before sending them to gym owners, creating a cash flow crunch for owners. (Unleashed said the system keeps money for only two or three days.)The company also continues to try to make everyone use its new shared call center, which Mr. Walenda said would “take us out of the equation of dealing with our customers” — something that might work for a business like Urban Air, which processes thousands of people a week, but not the familial relationships on which The Little Gym operated for decades.“You can’t treat every business the same,” Mr. Walenda said. “And that’s really what’s causing all of this strife.”In November, Unleashed introduced a revised operations manual that lays out new rules and fees. It specifies the hours the businesses must be open, how quickly they must return customer calls, which architect they must use and what company meetings they must attend. Staff salaries were only supposed to make up 30 percent of revenue. The technology fee can rise to $399 from $119.The national advertising fee can rise to 5 percent of gross sales from 1 percent; part of that will go to a fund that supports other Unleashed properties. New fees appeared, including a $30,000 fee to renew the franchise agreement, and a fee of about $15,000 to relocate the facility. For some owners, the changes seem to mean that they can no longer operate profitably and will have to sell rather than renew.Unleashed said the changes only apply to new franchisees, and Mr. Walenda said his group has been able to negotiate away some of the fees even for them. But other fees remain, including a $100,000 payment if the franchise is terminated, and Mr. Walenda said the company continues to try to force everyone to use its call center and point-of-sale system. As much as he believes in the collaborative approach, he’s willing to litigate to stop the attempts to extract more money.“That’s all private equity cares about, as far as I’m concerned,” Mr. Walenda said. His business is doing well, which he credits to the postpandemic desperation for children’s activities; he said Unleashed’s new systems have mostly just taken more time for his managers to deal with.“We’re not people, we’re not businesses, we’re just numbers to them,” Mr. Walenda said. “And that’s a problem. Because ‘Let’s just keep squeezing everything we can out of them until we can’t squeeze anymore’ — it’s a good way of making money. It’s not a very good way to run a business.”Ms. Cianci says she hopes to prove that it’s possible to resist a franchiser’s efforts to impose its will outside what are supposed to be legally binding agreements.Lexey Swall for The New York TimesAfter a year of owning The Little Gym, Unleashed Brands says that average gym revenue rose 36.8 percent in 2022 over 2019. And its franchisee recruitment has focused on people who want to open multiple units, such as Cody Herndon, whom Unleashed provided as an example of a Little Gym owner with a more positive view of management.An Urban Air operator who sold one of his two parks to another private equity investor, Mr. Herndon bought the rights to open three Little Gyms in Texas last year. He said he was drawn by the opportunity to have longer-term relationships with families and thought the new systems Unleashed was pushing would work out in the end.“There are going to be so many massive benefits to any change that’s been asked,” Mr. Herndon said.While disclosing few other metrics, the company told Axios in May that it expected to generate $160 million in revenue in 2022 and was shopping for a buyer. It appears to have found one.Unleashed’s current private equity investors are selling their stakes in the company imminently, according to a company spokesman. But the company declined to disclose the buyer or the terms of the deal.Whoever the buyer may be, they’ve got significant franchisee rancor on their hands — even beyond the Little Gym.At Mr. Browning’s original chain, Urban Air, a franchisee association representing more than 50 owners tried to bring a lawsuit in 2020 over what it viewed as unfair changes that had revealed the “terms and provisions of the franchise agreements upon which investment decisions were made to be illusory and meaningless.” But a Texas court threw the case out on technical grounds, and with individual arbitration the only path forward, the effort fell apart.In late 2022, Unleashed was also sued by 54 franchisees of its Premier Martial Arts brand who said in legal filings that the franchisor gave them an unrealistic impression of the cost of running a martial arts studio, leaving them with dead-end businesses and debt.Michelle and Peter Silberman of Wexford, Pa., depleted their retirement savings, maxed out their credit cards and took out a home-equity loan to acquire three Premier Martial Arts territories in 2020.Ross Mantle for The New York TimesMichelle and Peter Silberman depleted their retirement savings, maxed out their credit cards and took out a home-equity loan to acquire three Premier Martial Arts territories in March 2020, before Unleashed owned the franchisor. The first opened near their home in the Pittsburgh area in May 2022. Mr. Silberman said Premier Martial Arts told them that they could expect profit margins as high as 48 percent, while running the studios as “semi-absentee” owners who had to run the business as little as 10 hours a week.The couple was charging parents $138 a month, which included two classes a week. The Silbermans, who had no experience with martial arts, said they relied on the company’s assurances that it would help them manage the business.But when attendance began to decline and expenses were piling up — the couple spent $370,000 acquiring the territories and operating the one facility — Mr. Silberman said Premier Martial Arts offered little additional help. Their studio closed this past fall. Although the trouble began long before Unleashed announced that it had bought Premier Martial Arts in early 2022, the lawsuit states that after the acquisition, “the same false statements were still made and the same bogus model was pitched.”In response, the Unleashed spokesman said the company is “not a party to any contract” with a Premier Martial Arts franchisee.As for the Silbermans, they have been trying to pay down their debts.“We are, hopefully, going to avoid bankruptcy by the skin of our teeth,” said Mr. Silberman.New rules for franchisesMs. Cianci’s case is winding its way through arbitration. Her new gym in a suburban mall next to Macy’s has only about 74 members, compared with the 275 she had before her termination by Unleashed. She said her husband, a federal trademark attorney, is working long hours to support them.In the meantime, she’s trying to prevent future franchisees from being put in the situation she found herself in.As the F.T.C. reviews the rules governing franchising, advocates have urged the commission to add stronger protections, such as more disclosure of how the average franchise location performs. The International Franchise Association — whose board Mr. Browning recently joined — has lobbied hard to avert those changes.In Congress, Senator Catherine Cortez Masto, a Democrat from Nevada, has done extensive research on problems with the franchise system and introduced two bills seeking to give franchisees more leverage. But their fate is uncertain.That’s why Ms. Cianci is focused on the states. Specifically Arizona, where The Little Gym headquarters is based. Lawmakers have introduced a bill that would protect franchisees’ right to form associations, require changes to their agreements to be presented in contractual form, and limit the circumstances under which their licenses could be terminated.At the very least, she hopes her case will ultimately prove that it’s possible to resist a franchisor’s efforts to impose its will outside what are supposed to be legally binding agreements, whether it’s how many birthday parties to offer or which insurance company to use.“That’s exactly what went wrong here,” Ms. Cianci said. “He’s buying companies where people had rights.” More

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    Pandemic Aid Cut U.S. Poverty to New Low in 2021, Census Bureau Reports

    A measure that accounts for all federal subsidies also showed a reduction of almost half in the number of children below the poverty level.A second year of emergency pandemic aid from the federal government drove poverty to the lowest level on record in 2021 and cut the number of poor children by nearly half, the Census Bureau reported on Tuesday.The poverty rate fell to 7.8 percent, down from 9.2 percent the previous year, according to the Supplemental Poverty Measure, a yardstick that includes wages, taxes and the fullest account of government aid. In addition, the share of children in poverty sank to another record low of 5.2 percent, down 4.5 percentage points from 2020, a sharp acceleration of a long-term trend. In large part, those changes reflect the trillions of stimulus dollars approved by Congress, culminating in the Democrats’ American Rescue Plan of March 2021, especially the expanded child tax credit, which temporarily provided an income guarantee to families with children.Real median household income reached $70,800, not significantly different from 2020, as increases in full-time employment were offset by rising inflation and decreases in unemployment insurance, which had been supplemented above normal levels through the summer of 2021. The “official” poverty rate, generally considered outdated because it omits hundreds of billions spent on programs like tax credits and housing assistance, also did not change significantly from the previous year.How Poverty Has DecreasedThe official poverty rate was 11.6 percent last year, but the supplemental rate — which accounts for the impact of government programs — fell to 7.8 percent.

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    Share of the population living in poverty
    The supplemental rate adjusts for geographic differences. It also includes wage income, taxes and the fullest account of government aid.Sources: Census Bureau; Columbia UniversityKarl RussellThis data covers a year that was profoundly influenced by a set of emergency programs that have largely expired. Since then, many families have again found themselves under financial strain.Progressives see the reduction in poverty — even if temporary — as evidence that the federal government has the power to give people a better standard of living and that it should continue to do so in the future.“Man, I’m just grinning ear to ear,” said Luke Shaefer, who runs a center on poverty at the University of Michigan and sees the expanded child tax credit as a blueprint for a permanent program. “Americans wonder if the government can shape successful policies that address poverty. This offers incontrovertible evidence that it can.”Inflation F.A.Q.Card 1 of 5What is inflation? More

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    Child-care benefits could help ease the worker crunch, an advocacy campaign says.

    Almost half of mothers with young children who left the work force cited child care as a reason for the move, according to a survey released Wednesday, and 69 percent of women looking for a job said child-care benefits could sway their decision on where to work.The survey of more than 1,000 workers, by the consulting firm McKinsey & Company and Marshall Plan for Moms, a campaign focused on the economic participation of mothers, adds to research exploring how the lack of child care continues to drag on the economy and tighten an already-hot labor market.“Companies are scrambling for talent,” said Reshma Saujani, who founded Marshall Plan for Moms and Girls Who Code, a nonprofit aimed at closing the gender gap in tech. “Our report shows that you can attract, retain and advance women in the work force only through the provision of offering child-care benefits.”Child care has long been too scarce or too expensive for most families. And during the pandemic, the industry more or less collapsed, as day-care centers struggled to stay open and child-care workers quit en masse.Many executives and child-care activists had hoped that President Biden’s sprawling infrastructure plan would provide support for the industry. But the pared-back bill was signed into law without big investments in child care. Ms. Saujani says the onus is now on the private sector.Most salaried and hourly workers do not have access to child-care benefits. Six percent of hourly workers surveyed and 16 percent of salaried workers said they had access to child-care subsidies. The same percentage of hourly workers, and even fewer salaried workers, reported that their employer provided backup child care or offered pretax flexible spending accounts that could be used to pay for care. About 30 percent of respondents said they had flexible working hours.Ms. Saujani’s campaign is forming a business coalition that includes Patagonia and Archewell, the production company founded by Prince Harry and Meghan, the Duchess of Sussex. To sign on, companies must offer a child-care subsidy or benefit or intend to provide one, Ms. Saujani said. Once they join the coalition, businesses can share and learn best practices from one another.Synchrony, a financial services firm that is part of the coalition, found that offering its employees creative child-care options led to a surge in job satisfaction and an influx of applications for job openings, said Carol Juel, the company’s chief technology and operating officer.In the summer of 2020, the company created a virtual summer camp, putting high school and college children of their employees in charge of keeping 3,700 campers occupied in exchange for mentorship training and college credit. And the company would “send out, every Friday, the next week’s schedule so that workers could plan their meetings around this,” Ms. Juel said.Fast Retailing USA, which operates apparel brands including Uniqlo, Theory and Helmut Lang and is also part of the coalition, has started offering monthly child-care stipends of up to $1,000 for many employees, including store managers. The money can be spent in any way they see fit rather than being tied to specific providers.“A lot of the people who were involved in sponsoring this policy, myself included and some of our heads of human resources, all have kids the same age,” said Serena Peck, Fast Retailing’s chief administrative officer and general counsel. They were seeing firsthand how “the market was shrinking for good child care” and “felt like we had to do something.” More

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    Child Tax Credit’s Extra Help Ends, Just as Covid Surges Anew

    A pandemic benefit that many progressives hoped to make permanent has lapsed in a congressional standoff. Researchers say it spared many from poverty.For millions of American families with children, the 15th of the month took on a special significance in 2021: It was the day they received their monthly child benefit, part of the Biden administration’s response to the pandemic.The payments, which started in July and amounted to hundreds of dollars a month for most families, have helped millions of American families pay for food, rent and child care; kept millions of children out of poverty; and injected billions of dollars into the U.S. economy, according to government data and independent research.Now, the benefit — an expansion of the existing child tax credit — is ending, just as the latest wave of coronavirus cases is keeping people home from work and threatening to set off a new round of furloughs. Economists warn that the one-two punch of expiring aid and rising cases could put a chill on the once red-hot economic recovery and cause severe hardship for millions of families already living close to the poverty line.“It’s going to be hard next month, and just thinking about it, it really makes me want to bite my nails to the quick,” said Anna Lara, a mother of two young children in Huntington, W.Va. “Honestly, it’s going to be scary. It’s gong to be hard going back to not having it.”Ms. Lara, 32, lost her job in the pandemic, and with the cost of child care rising, she has not been able to return to work. Her partner kept his job, but the child benefit helped the couple make ends meet at a time of reduced income and rising prices.“Your children watch you, and if you worry, they catch on to that,” she said. “With that extra cushion, we didn’t have to worry all the time.”The end of the extra assistance for parents is the latest in a long line of benefits “cliffs” that Americans have encountered as pandemic aid programs have expired. The Paycheck Protection Program, which supported hundreds of thousands of small businesses, ended in March. Expanded unemployment benefits ended in September, and earlier in some states. The federal eviction moratorium expired last summer. The last round of stimulus payments landed in Americans’ bank accounts last spring.Relative to those programs, the rollback in the child tax credit is small. The Treasury Department paid out about $80 billion over six months in the form of checks and direct deposits of up to $300 per child each month. That is far less than the more than $240 billion in stimulus payments issued on a single day last March.Unlike most other programs created in response to the pandemic, the child benefit was never intended to be temporary, at least according to many of its backers. Congress approved it for a single year as part of the $1.9 trillion American Rescue Plan, but many progressives hoped that the payments, once started, would prove too popular to stop.That didn’t happen. Polls found the public roughly divided over whether the program should be extended, with opinions splitting along partisan and generational lines. And the expanded tax credit failed to win over the individual whose opinion mattered most: Senator Joe Manchin III, Democrat of West Virginia, who cited concerns over the cost and structure of the program in his decision to oppose Mr. Biden’s climate, tax and social policy bill. The bill, known as the Build Back Better Act, cannot proceed in the evenly divided Senate without Mr. Manchin’s support.To supporters of the child benefit, the failure to extend it is especially frustrating because, according to most analyses, the program itself has been a remarkable success. Researchers at Columbia University estimate that the payments kept 3.8 million children out of poverty in November, a nearly 30 percent reduction in the child poverty rate. Other studies have found that the benefit reduced hunger, lowered financial stress among recipients and increased overall consumer spending, especially in rural states that received the most money per capita.Congress last spring expanded the existing child tax credit in three ways. First, it made the benefit more generous, providing as much as $3,600 per child, up from $2,000. Second, it began paying the credit in monthly installments, usually deposited directly into recipients’ bank accounts, turning the once-yearly windfall into something closer to the children’s allowances common in Europe.Finally, the bill made the full benefit available to millions who had previously been unable to take full advantage of the credit because they earned too little to qualify. Poverty experts say that change, known in tax jargon as “full refundability,” was particularly significant because without it, a third of children — including half of all Black and Hispanic children, and 70 percent of children being raised by single mothers — did not receive the full credit. Mr. Biden’s plan would have made that provision permanent.“What we’ve seen with the child tax credit is a policy success story that was unfolding, but it’s a success story that we risk stoping in its tracks just as it was getting started,” said Megan Curran, director of policy at Columbia’s Center on Poverty and Social Policy. “The weight of the evidence is clear here in terms of what the policy is doing. It’s reducing child poverty and food insufficiency.”But the expanded tax credit doesn’t just go to the poor. Couples earning as much as $150,000 a year could receive the full $3,600 benefit — $3,000 for children 6 and older — and even wealthier families qualify for the original $2,000 credit. Critics of the policy, including Mr. Manchin, have argued that it makes little sense to provide aid to relatively well-off families. Many supporters of the credit say they’d happily limit its availability to wealthier households in return for maintaining it for poorer ones.Mr. Manchin has also publicly questioned the wisdom of unconditional cash payments, and has privately voiced concerns that recipients could spend the money on opioids, comments that were first reported by The Wall Street Journal and confirmed by a person familiar with the discussion. But a survey conducted by the Census Bureau found that most recipients used the money to buy food, clothing or other necessities, and many saved some of the money or paid down debt. Other surveys have found similar results.For one of Mr. Manchin’s constituents, Ms. Lara, the first monthly check last year arrived at an opportune moment. Her dishwasher had broken days earlier, and the $550 a month that she and her family received from the federal government meant they could replace it.Ms. Lara, who has a 6-year-old daughter and a 3-year-old son and whose partner earns about $40,000 a year, said the family had long lived “right on the edge of need” — not poor, but never able to save enough to withstand more than a modest setback.The monthly child benefit, she said, let them step a bit further back from the edge. It allowed her to get new shoes and a new car seat for her daughter, stock up on laundry detergent when she found it on sale and fix the brakes on her car.A line at a Covid testing site in Atlanta on Friday. The child tax benefit is ending just as the latest wave of coronavirus cases is keeping people home from work.Nicole Craine for The New York Times“None of the dash lights are on, which is amazing,” she said.Some researchers have questioned the policy’s effectiveness, particularly over the long term. Bruce D. Meyer, an economist at the University of Chicago who studies poverty, said that whatever the merits of direct cash payments at the height of the pandemic-induced disruptions, a permanent policy of providing unconditional cash to parents could have unintended consequences. He and several co-authors recently published a working paper finding that the child benefit could discourage people from working, in part because it eliminated the work incentives built into the previous version of the tax credit.“Early on, we just wanted to get cash in people’s hands — we were worried about a recession, we were worried about people being able to pay for their groceries,” Mr. Meyer said. Now, he said, “we certainly should be more focused on the longer-term effects, which include likely larger effects on labor supply.”Analyses of the data since the new child benefit took effect, however, have found no evidence that it has done much to discourage people from working, and some researchers say it could actually lead more people to work by making it easier for parents of young children to afford child care.“There’s every reason to believe that in the current labor market, the child tax credit is work-enabling, and no evidence to the contrary has been presented,” said Samuel Hammond, director of poverty and welfare policy at the Niskanen Center, a research organization in Washington.Mr. Hammond said the child benefit should also have broader economic benefits. In a report last summer, he estimated that the expansion would increase consumer spending by $27 billion nationally and create the equivalent of 500,000 full-time jobs. The biggest impact, on a percentage basis, would come in rural, mostly Republican-voting states where families are larger and incomes are lower, on average.Some Republican critics of the expanded child tax credit, including Senator Roy Blunt of Missouri, have argued that it has essentially done too much to increase spending — that by giving people more money to spend when the supply chain is already strained, the government is contributing to faster inflation.But many economists are skeptical that the tax credit has played much of a role in causing high inflation, in part because it is small compared with both the economy and the earlier rounds of aid distributed during the pandemic.“That’s a noninflationary program,” said Joe Brusuelas, chief economist at the accounting firm RSM. “That’s dedicated toward necessities, not luxuries.”For those receiving the benefit, inflation is an argument for maintaining it. Ms. Lara said she had noticed prices going up for groceries, utilities and especially gas, stretching her budget even thinner.“Right now, both of my vehicles need gas and I can’t put gas in the car,” she said. “But it’s OK, because I’ve got groceries in the house and the kids can play outside.”Emily Cochrane More

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    China's Parents Say For-Profit Tutoring Ban Helps Only the Rich

    Many families and experts say Beijing’s education overhaul will help the rich and make the system even more competitive for those who can barely afford it.Zhang Hongchun worries that his 10-year-old daughter isn’t getting enough sleep. Between school, homework and after-school guitar, clarinet and calligraphy practice, most nights she doesn’t get to bed before 11. Some of her classmates keep going until midnight.“Everyone wants to follow suit,” Mr. Zhang said. “No one wants to lose at the starting line.”In China, the competitive pursuit of education — and the better life it promises — is relentless. So are the financial pressures it adds to families already dealing with climbing house prices, caring for aging parents and costly health care.The burden of this pursuit has caught the attention of officials who want couples to have more children. China’s ruling Communist Party has tried to slow the education treadmill. It has banned homework, curbed livestreaming hours of online tutors and created more coveted slots at top universities.Last week, it tried something bigger: barring private companies that offer after-school tutoring and targeting China’s $100 billion for-profit test-prep industry. The first limits are set to take place during the coming year, to be carried out by local governments.The move, which will require companies that offer curriculum tutoring to register as nonprofits, is aimed at making life easier for parents who are overwhelmed by the financial pressures of educating their children. Yet parents and experts are skeptical it will work. The wealthy, they point out, will simply hire expensive private tutors, making education even more competitive and ultimately widening China’s yawning wealth gap.For Mr. Zhang, who sells chemistry lab equipment in the southern Chinese city of Kunming, banning after-school tutoring does little to address his broader concerns. “As long as there is competition, parents will still have their anxiety,” he said.Children in Beijing’s Chaoyang Park. In May, China changed its two-child policy to allow married couples to have three children.Gilles Sabrié for The New York TimesBeijing’s crackdown on private education is a new facet of its campaign to toughen regulation on corporate China, an effort driven in part by the party’s desire to show its most powerful technology giants who is boss.Regulators have slammed the industry for being “hijacked by capital.” China’s top leader, Xi Jinping, has attacked it as a “malady,” and said parents faced a dilemma in balancing the health and happiness of their children with the demands of a competitive system, which is too focused on testing and scores.The education overhaul is also part of the country’s effort to encourage an overwhelmingly reluctant population to have bigger families and address a looming demographic crisis. In May, China changed its two-child policy to allow married couples to have three children. It promised to increase maternity leave and ease workplace pressures.Tackling soaring education costs is seen as the latest sweetener. But Mr. Zhang said having a second child was out of the question for him and his wife because of the time, energy and financial resources that China’s test-score-obsessed culture has placed on them.Parental focus on education in China can sometimes make American helicopter parenting seem quaint. Exam preparation courses begin in kindergarten. Young children are enrolled in “early M.B.A.” courses. No expense is spared, whether the family is rich or poor.“Everyone is pushed into this vicious cycle. You spend what you can on education,” said Siqi Tu, a postdoctoral research fellow at the Max Planck Institute for the Study of Religious and Ethnic Diversity in Göttingen, Germany. For Chinese students hoping to get a spot at a prestigious university, everything hinges on the gaokao, a single exam that many children are primed for before they even learn how to write.A boy with a school backpack in Haidian during summer break. Parental focus on education in China can sometimes make American helicopter parenting seem quaint.Gilles Sabrié for The New York Times“If this criteria for selecting students doesn’t change, it’s hard to change specific practices,” said Ms. Tu, whose research is focused on wealth and education in China. Parents often describe being pressured into finding tutors who will teach their children next year’s curriculum well before the semester begins, she said.Much of the competition comes from a culture of parenting known colloquially in China as “chicken parenting,” which refers to the obsessive involvement of parents in their children’s lives and education. The term “jiwa” or “chicken baby” has trended on Chinese social media in recent days.Officials have blamed private educators for preying on parents’ fears associated with the jiwa culture. While banning tutoring services is meant to eliminate some of the anxiety, parents said the new rule would simply create new pressures, especially for families that depended on the after-school programs for child care.“After-school tutoring was expensive, but at least it was a solution. Now China has taken away an easy solution for parents without changing the problem,” said Lenora Chu, the author of “Little Soldiers: An American Boy, a Chinese School, and the Global Race to Achieve.” In her book, Ms. Chu wrote about her experience putting her toddler son through China’s education system and recounted how her son’s friend was enrolled in “early M.B.A.” classes..css-1xzcza9{list-style-type:disc;padding-inline-start:1em;}.css-3btd0c{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-3btd0c{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-3btd0c strong{font-weight:600;}.css-3btd0c em{font-style:italic;}.css-w739ur{margin:0 auto 5px;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}#NYT_BELOW_MAIN_CONTENT_REGION .css-w739ur{font-family:nyt-cheltenham,georgia,’times new roman’,times,serif;font-weight:700;font-size:1.375rem;line-height:1.625rem;}@media (min-width:740px){#NYT_BELOW_MAIN_CONTENT_REGION .css-w739ur{font-size:1.6875rem;line-height:1.875rem;}}@media (min-width:740px){.css-w739ur{font-size:1.25rem;line-height:1.4375rem;}}.css-9s9ecg{margin-bottom:15px;}.css-uf1ume{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-box-pack:justify;-webkit-justify-content:space-between;-ms-flex-pack:justify;justify-content:space-between;}.css-wxi1cx{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-flex-direction:column;-ms-flex-direction:column;flex-direction:column;-webkit-align-self:flex-end;-ms-flex-item-align:end;align-self:flex-end;}.css-12vbvwq{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;}@media (min-width:740px){.css-12vbvwq{padding:20px;width:100%;}}.css-12vbvwq:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-12vbvwq{border:none;padding:10px 0 0;border-top:2px solid #121212;}.css-12vbvwq[data-truncated] .css-rdoyk0{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-12vbvwq[data-truncated] .css-eb027h{max-height:300px;overflow:hidden;-webkit-transition:none;transition:none;}.css-12vbvwq[data-truncated] .css-5gimkt:after{content:’See more’;}.css-12vbvwq[data-truncated] .css-6mllg9{opacity:1;}.css-qjk116{margin:0 auto;overflow:hidden;}.css-qjk116 strong{font-weight:700;}.css-qjk116 em{font-style:italic;}.css-qjk116 a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;text-underline-offset:1px;-webkit-text-decoration-thickness:1px;text-decoration-thickness:1px;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:visited{color:#326891;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:hover{-webkit-text-decoration:none;text-decoration:none;}“If you don’t have the money or the means or the know-how, what are you left with?” she said. “Why would this compel you to have another child? No way.”The new regulation has created some confusion for many small after-school businesses that are unsure if it will affect them. Others wondered how the rules would be enforced.Jasmine Zhang, the school master at an English training school in southern China, said she hadn’t heard from local officials about the new rules. She said she hoped that rather than shutting institutions down, the government would provide more guidance on how to run programs like hers, which provide educators with jobs.“We pay our teachers social insurance,” Ms. Zhang said. “If we are ordered to close suddenly, we still have to pay rent and salaries.”While she waits to learn more about the new rules, some for-profit educators outside China see an opportunity.“Now students will come to people like us,” said Kevin Ferrone, an academic dean at Crimson Global Academy, an online school. “The industry is going to shift to online, and payments will be made through foreign payment systems” to evade the new rules, he said.For now, the industry is facing an existential crisis. Companies like Koolearn Technology, which provides online classes and test-preparation courses, have said the rules will have a direct and devastating impact on their business models. Analysts have questioned whether they can survive.Global investors who once flooded publicly listed Chinese education companies ran for the exits last week, knocking tens of billions off the industry in recent days.Scott Yang, who lives in the eastern city of Wenzhou, wondered if his 8-year-old son’s after-school program would continue next semester. He has already paid the tuition, and he and his wife depend on the program for child care. Each day, someone picks up his son from school and takes him to a facility for courses in table tennis, recreational mathematics, calligraphy and building with Legos.Banning after-school classes will allow only families that can afford private tutors to give their children an edge, Mr. Yang said. Instead of alleviating any burden, the ban will add to it.“It makes it harder,” he said, “for kids of poor families to succeed.” More

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    Biden $1.8 Trillion Plan: Child Care, Student Aid and More

    The proposed American Families Plan would expand access to education and child care. It would be financed partly through higher taxes on the wealthiest Americans.WASHINGTON — The Biden administration on Wednesday detailed a $1.8 trillion collection of spending increases and tax cuts that seeks to expand access to education, reduce the cost of child care and support women in the work force, financed by additional taxes on high earners.The American Families Plan, as the White House calls it, follows the $2.3 trillion infrastructure package President Biden introduced last month, bringing his two-part package of economic proposals to just over $4 trillion. He will present the details to a joint session of Congress on Wednesday evening.The proposal includes $1 trillion in new spending and $800 billion in tax credits, much of which is aimed at expanding access to education and child care. The package includes financing for universal prekindergarten, a federal paid leave program, efforts to make child care more affordable, free community college for all, aid for students at colleges that historically serve nonwhite communities, expanded subsidies under the Affordable Care Act and an extension of new federal efforts to fight poverty.Administration officials cast the plan as investing in an inclusive economy that would help millions of Americans gain the skills and the work flexibility they need to build middle-class lifestyles. They cited research on the benefits of government spending to help young children learn. In a 15-page briefing document, they said the package would help close racial and gender opportunity gaps across the economy.Many of the provisions, like tax credits to help families afford child care and a landmark expansion of a tax credit meant to fight child poverty, build on measures in the $1.9 trillion economic rescue plan Mr. Biden signed into law last month. The package would make many of those temporary measures permanent.But the plan also includes a maze of complicated formulas for who would benefit from certain provisions — and how much of the tab state governments would need to pick up.The package could face even more challenges than the American Jobs Plan, Mr. Biden’s physical infrastructure proposal, did in Congress. The president has said repeatedly that he hopes to move his agenda with bipartisan support. But his administration remains far from reaching a consensus with Republican negotiators in the Senate.Republicans have expressed much less interest in additional spending for education, child care and paid leave than they have for building roads and bridges. They have also chafed at the tax increases Mr. Biden has proposed, including the ones that will help pay for his latest package.The president is proposing an increase in the marginal income tax rate for the top 1 percent of American income earners, to 39.6 percent from 37 percent. He would increase capital gains and dividend tax rates for those who earn more than $1 million a year. And he would eliminate a provision in the tax code that reduces capital gains on some inherited assets, like vacation homes, that largely benefits the wealthy.Mr. Biden would also invest $80 billion in personnel and technology enhancements for the I.R.S., in hopes of netting $700 billion in additional revenues from high earners, wealthy individuals and corporations that evade taxes.Republicans and conservative activists have criticized all those measures. Administration officials told reporters that the president would be open to financing the spending and tax credits in his plan through alternative means, essentially challenging Republicans to name their own offsets, as Mr. Biden did with his physical infrastructure proposal.Still, many of the details in his new proposal poll well with voters across the political spectrum. Much of the package could win the support of the full Democratic caucus in Congress, which would need to band together to pass all or part of the plan through the fast-track process known as budget reconciliation, which bypasses a Senate filibuster.Expanded access to government-subsidized preschool and community college may have broad appeal. Workers with only high school degrees are often stuck in low-wage jobs, and two-thirds of mothers with young children are employed, and thus need reliable child care. The high cost of quality day care and pre-K puts these services out of reach for many families, who may rely on informal networks of relatives and neighbors who are untrained in early education.Expanding access to pre-K has been particularly popular over the past decade in states and cities, including some with Republican governors. A large body of research shows that achievement gaps between poor and middle-class children emerge in the earliest years of childhood and are present on the first day of kindergarten. Administration officials contend that free, quality early childhood education can both help cash-strapped parents and build students’ skills in ways that will help them become more productive workers.Still, there are major disagreements about how generous any expansion of pre-K should be. President Barack Obama’s administration generally favored a centrist approach in which new seats were geared toward lower-income families.Mr. Biden’s plan differs in that it calls for universal preschool for all 3- and 4-year-olds, including those from affluent families. That is the same approach pioneered in recent years by city programs in New York and Washington, which expanded quickly to serve a diverse swath of families, but not without some evidence that they replicated the segregation and inequities of the broader K-12 education system.Bruce Fuller, a professor of education at the University of California, Berkeley, has been a critic of the universal approach, instead favoring more targeted programs. He questioned whether states would do their part to fund the expansion and said the goal of paying all early childhood workers $15 per hour was too modest to broadly improve the quality and stability of the work force.“How governors weigh these competing priorities, ethically and politically, remains an open question,” he said.The proposed investment from Washington comes at a precarious time. Preschool enrollment declined by nearly 25 percent over the past year, largely because of the coronavirus pandemic. As of December, about half of 4-year-olds and 40 percent of 3-year-olds attended pre-K, including in remote programs. And only 13 percent of children in poverty were receiving an in-person preschool education in December, according to the National Institute for Early Education Research.Unlike the preschool proposal, the child care plan is not universal. It would offer subsidies to families earning up to 1.5 times their state’s median income, which could be in the low six figures in some locations. It would also continue tax credits approved in the pandemic relief bill this year that offer benefits to people earning up to $400,000 a year.As with Mr. Biden’s previous policy proposals, the American Families Plan offers something to many traditional Democratic Party constituencies. The administration is closely tied to teachers’ unions, and while many early childhood educators are not unionized, the proposal also calls for investments in K-12 teacher education, training and pay, which are all union priorities. One goal is to bring more teachers of color into a public education system where a majority of students are nonwhite.The expansion of free community college would apply to all students, regardless of income. It would require states to contribute to meet the goal of universal access, senior administration officials said on Tuesday. Mr. Biden would also expand Pell grants for low-income students and subsidize two years of tuition at historically Black colleges and universities, as well as at institutions that serve members of Native American tribes and other minority groups.Mr. Fuller said he expected the community college proposal to effectively target spending to the neediest students. About one-third of all undergraduates attend public two-year colleges, which serve a disproportionate number of students from low-income families.The paid leave program will phase in over time. The administration’s fact sheet says it will guarantee 12 weeks of paid “parental, family and personal illness/safe leave” by its 10th year in existence. Workers on leave will earn up to $4,000 a month, with as little as two-thirds or as much as 80 percent of their incomes replaced, depending on how much they earn.Other provisions include late concessions to key Democratic constituencies. Administration officials had removed the health care credits last week but added them back under pressure from Speaker Nancy Pelosi of California and others. They bucked pressure from House and Senate Democrats to make permanent an expanded child tax credit created by the pandemic relief bill, extending it through 2025. But the plan would make permanent one aspect of the expanded credit, which allows parents with little or no income to reap its benefits regardless of how much they earn. More