Family Finances

Is Build Back Better the Start of a Benefits Reset for Workers?

November 15, 2021  • Financial Security Program, Tim Shaw & Justin King

Congress remains engaged in deep negotiations over a bill advancing President Biden’s “Build Back Better” agenda. While media coverage has focused on the fluctuating price tag and the predictably messy roller coaster of negotiations, at its heart the legislative package is about workers. It involves the public and private benefits they need to be fully engaged in the economy, to be financially stable now, and to be secure later. What are the core benefits workers need? What do they deserve? 

The pandemic’s sprawling economic impact is now in a phase some are calling “The Great Resignation,” a dynamic upheaval of the labor market that economists and researchers are rushing to understand. Wages are up, and so are “quits.” Workers and goods appear to be in short supply in many places, and inflation has risen. What is clear, and was true previously but made obvious by the pandemic, is that jobs alone do not guarantee financial security. Workers need access to quality public and private benefits, like paid leave and retirement benefits, to stabilize their financial lives and thrive. This “Build Back Better” bill supports the financial lives of workers and families in the United States with a multi-faceted approach, substantially improving the suite of public and private benefits available to them. 

After months of negotiations, the House seems poised to pass the bill by Thanksgiving. Should the House bill pass, the legislation will continue to evolve to get through the evenly divided Senate. While less expansive and expensive than previous versions, the current bill signals a rare and serious conversation about the full set of financial security benefits workers need to participate fully in the economy. As noted by public and private benefits experts on the Leadership Advisory Group for the Aspen Financial Security Program’s Benefits21 initiative, key provisions in Build Back Better enhance critical benefits and their roles in the financial lives of workers and their families.

Key Build Back Better provisions are in line with a modernized benefits system that supports financial security 

The Benefits21 framework for a modernized, integrated system of public and private benefits recognizes that income alone will not produce financial security for the vast majority of people in America. Neither will the combination of income and savings. People need access to the risk-pooling and economies of scale that public and private benefits provide. Specifically, benefits:

  1. Provide income support and reduce the cost of living expenses.
  2. Enable resilience and protection from major economic shocks.
  3. Support wealth-building and investments in opportunity and economic mobility.

Provisions in the “Build Back Better” agenda represented by the legislation before the House address two of the ways that benefits need to support workers’ financial security. Below are summaries of the core of these provisions and how they might affect workers and their families, as well as insights from key leaders across the corporate, academic, labor, and social sectors. 

Increasing income support and reducing key household expenses: Tax Credits and Care Investments 

Tax Credits

The Build Back Better legislation boosts household income by temporarily extending the expansions of the Child Tax Credit (CTC) and Earned Income Tax Credit (EITC) instituted by the American Rescue Plan Act. By expanding the value of each of the credits, making the CTC fully refundable to reach the lowest-income households, and increasing eligibility for the credits, the proposals meaningfully increase the income of millions of households. The Niskanen Center’s Samuel Hammond previously estimated that the expanded CTC would lift 4.5 million children out of poverty and support over 500,000 full-time jobs at the median wage. The bill makes the refundability provisions of the CTC permanent but only extends the other elements for the CTC and EITC for one year.

“The expanded Child Tax Credits and enhanced EITC benefits included in the ARP have and could continue to result in dramatic reductions in poverty,” says Bradley Hardy, associate professor at the McCourt School of Public Policy at Georgetown University and a member of the Benefits21 Leadership Advisory Group. “These are the types of innovative policy expansions that are supported by a broad base of evidence on the long-term importance of income support.” 

Child Care & Pre-K Investments

The legislation also boosts the income of critical workers in our economy and addresses one of the largest household expenses of families by providing substantial funding for and increasing access to child care. It provides funding to create inclusive, universal access to preschool for 3- and 4-year olds, caps other child care expenses at 7% of income for most families when fully phased in, and subsidizes increased child care worker pay.  

According to David Rolf, founding president of SEIU 775 and another member of the Benefits21 Leadership Advisory Group, “Caregiving is the fastest-growing job in the country, and also one of the lowest-paid. The Build Back Better plan will raise caregiver wages and benefits and give caregivers—who are overwhelmingly women, immigrants, and people of color—a seat at the table to raise worker standards.”

Protecting workers from major financial shocks: Healthcare and Paid Leave


Households without health insurance do not only regularly put off treatment and have trouble affording necessary medication, but are also disproportionately likely to incur a large amount of medical debt which can lead to wage garnishment, asset seizure, and court fees if the households cannot afford the debt. The House bill proposes provisions that would reduce uninsurance and increase insurance affordability by enhancing tax credits for health insurance under the Affordable Care Act and making more households eligible for those credits in states that did not expand Medicaid. One estimate found that these provisions would increase the inclusivity of publicly supported health care and reduce the number of uninsured people by 7 million.

Paid Leave

The legislation also provides funding to provide four weeks of paid parental, medical, and caregiver leave for most workers, including full-time, part-time, and self-employed workers. It also provides funding to ensure states and small businesses implementing new paid leave policies can afford to do so. The program provides the most generous benefits for low-income workers, who are three times more likely than other workers to go without pay when taking parental, medical, or caregiver leave (61% vs 20%), are much more likely to go without leave because they can’t afford it, and draw down savings, borrow, or put off paying bills while taking unpaid leave.

“The US stands alone among developed nations without a national paid family leave policy,” says Maria Contreras-Sweet, 24th Administrator of the US Small Business Administration and member of the Benefits21 Leadership Advisory Group. “The Build Back Better proposal would fill that gap and ensure that all workers, especially women, don’t have to make the impossible choice between providing for their families and caring for their children, the health of a loved one, or themselves.”

A comprehensive benefits system remains a goal—but one within reach

The proposed Build Back Better legislation would take critical steps toward creating a comprehensive, modernized system of benefits that better meets the needs of today’s workers. Should the legislation become law, new and expanded benefits will become available to millions of workers excluded from existing supports, representing a substantial improvement over the status quo.

And still, a great deal of work will remain to effectively create an America where all workers have the benefits they need to thrive. Important policies—such as a universal workplace retirement savings access requirement—were removed from the proposed House bill during negotiations. Other essential reforms, such as changes to Unemployment Insurance to improve access and adequacy, were not included in the formal negotiations. In addition, many of the policies included in this version are temporary, creating ongoing uncertainty for workers and employers.

The government also faces the substantial challenge of implementing these new policies so that they reach the people they are intended to serve. Even delivering checks is more complex than it seems; millions of households are not yet receiving CTC payments because they have not filed taxes with the government in the past few years. Filing taxes also does not guarantee that people are receiving the payments for which they are eligible, or that they are receiving appropriate amounts. These challenges persist despite substantial effort from the Biden administration, supplemental technological tools built to ease access by the nonprofit Code for America, and enrollment efforts from the social sector. The challenges involved in delivering monthly checks to families with children underscore the need for benefit reforms that are inclusive, people-centered, portable, and interoperable. A benefit on the books has no value to workers who cannot access it.

“There is still work to be done to bring secure, equitable, and inclusive benefits to frontline workers and their households, however, the Build Back Better Plan makes great strides in this direction,” says Molly Hemstreet, executive co-director of the Industrial Commons and member of the Benefits21 Leadership Advisory Group. “The plan embodies many of the values and concrete solutions put forth by the Benefits21 platform which was informed by frontline workers’ voices. We look forward to the implementation of these solutions to create the true security all workers and families deserve.”

The pandemic is waning, but not gone. Wages are rising but without inclusive and equitable access to public and private benefits to help workers thrive. Many workers are expressing their dissatisfaction with their working conditions and are making their voices heard through quitting and striking. The proposed Build Back Better legislation signals a critical inflection point—where workers might see real strides toward modernizing public and private benefits to better align with their financial needs and the realities of 21st-century employment in our country. Now is the time to join our Benefits21 community and be a part of an ecosystem that is working to create a system of benefits that is inclusive, people-centric, portable, and interoperable—one that helps all workers achieve financial security. 

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