off the charts
POLICY INSIGHT
BEYOND THE NUMBERS

Build Back Better Reduces Racial Disparities

| By CBPP
centerlogodarkblue-neweb_centerlogo-partnership-blue_copy.png

CBPP

The House Build Back Better (BBB) legislation takes important steps to address racial disparities rooted in this nation’s long history of racism and discrimination, which has created large gaps in both opportunities and outcomes in education, employment, health, and housing. BBB promises to achieve significant benefits for millions of people — children of color in particular — by investing in programs and policies with a proven track record. And it pays for these investments with progressive policies that require the wealthy and profitable corporations to pay a fairer amount of taxes.

Among other things, BBB would:

  • Cut poverty — especially among children — and narrow long-standing racial disparities in child poverty. BBB extends the American Rescue Plan’s expansion of the Child Tax Credit for 2022, which is expected to lift 4 million children above the poverty line and narrow the difference between the poverty rates for Black and white children by 44 percent (compared to what the rates would be otherwise) and to narrow the difference between the poverty rates for Latino and white children by 41 percent. BBB also permanently ensures that the full Child Tax Credit is available to children in families with low or no earnings in a year. This is particularly important for Black and Latino children, about half of whom received a partial credit or no credit at all before the Rescue Plan expansion because their families’ incomes were too low, compared to about 20 percent of white children. By reducing poverty among children, BBB’s Child Tax Credit improvements will improve families’ quality of life now and improve children’s health, education, and employment opportunities in adulthood.
  • Reduce homelessness and housing instability. Racism and policies that uphold it have put people of color at greater risk of high rental cost burdens, overcrowding, eviction, and homelessness. People of color made up over half of those who experienced homelessness in 2020, and are 62 percent of renter households with low incomes who are paying over half their income for housing and are at elevated risk of homelessness. BBB will fund about 300,000 more Housing Choice Vouchers, which bridge the gap between households’ incomes and the cost of housing; studies show vouchers are highly effective at helping low-income people afford adequate, stable housing. We estimate that 71 percent of those receiving the new vouchers will be people of color.
  • Expand health coverage and access to care. BBB closes the Medicaid coverage gap through 2025, providing a pathway to coverage for more than 2 million people with incomes below the poverty line in states that haven’t adopted the Affordable Care Act’s Medicaid expansion. People of color make up 60 percent of those in the coverage gap, including 28 percent who are Latino and 28 percent who are Black. Closing the coverage gap is critical to advancing health equity in other areas where troubling racial and ethnic disparities exist, including maternal and child mortality, access to mental health treatment, and access to treatment for substance use disorders. It will also make access to care more equitable by improving the stability of rural health systems that people of color rely on.

    BBB also extends premium tax credit improvements through 2025 to make marketplace coverage more affordable and increases Medicaid funding in Puerto Rico and other territories. The Urban Institute analyzed the impact of permanently improving the credits and closing the coverage gap via an expansion of marketplace subsidies and found that more than 1 in 3 uninsured Black people would gain coverage in 2022 — the largest gains of any racial or ethnic group.

    Finally, BBB includes important Medicaid improvements, including a provision ensuring that all pregnant and postpartum enrollees receive a full year of coverage after pregnancy ends and a new state option to provide team-based, coordinated care for pregnant and postpartum people. Both are critical tools for reducing disparities that have driven a crisis in maternal health, which has been particularly harmful for Black people and American Indian and Alaska Native people. The package also includes provisions from the Black Maternal Health Momnibus Act, which would provide additional investments to expand and diversify the perinatal health workforce (including midwives and doulas), provide grants for maternal mental health equity, and strengthen monitoring of maternal health outcomes, among other provisions.

  • Improve access to preschool and child care. BBB will reduce racial inequities in access to opportunity in early childhood within participating states. First, it guarantees access to voluntary, free preschool programs for all 3- and 4-year-olds in these states. Black children are disproportionately enrolled in lower-quality preschool programs due to housing segregation and income disparities; access to high-quality early childhood programs will help children gain significantly in both short-term school readiness and long-term educational and employment outcomes. Second, BBB makes child care affordable for parents with children up through age 5 in participating states, advancing equity and opportunity for children while also making it easier for parents to afford child care. This will especially benefit Black and Latino families, since they are likelier to struggle with high child care costs.
  • Reduce childhood hunger, which children of color disproportionately face. Due in significant part to harsh, long-standing inequities and structural racism, food insecurity is particularly acute for people of color, including kids. In 2020, Black and Latino households with children were more than twice as likely to experience food insecurity as white households. BBB extends through 2024 a summer grocery benefit, first provided nationwide during the pandemic, for children who typically receive free or reduced-price school meals during the school year. BBB also enables more schools with large numbers of low-income students to serve free meals to all students. These changes will reduce hunger and food insecurity and, because even short-term periods of food hardship pose long-term risks for children, they will improve their prospects for long-term health and well-being.
  • Provides paid family and medical leave to workers who need to take time off to care for a new child or ill family member or to attend to their own health issue. Currently, the U.S. is alone among similarly wealthy nations in lacking a national paid leave program. Workers of color are less likely to have access to any family and medical leave, paid or unpaid, and are likelier to have to forgo needed time away from work, mainly because they cannot afford to take an unpaid leave. Creating a national paid leave program will shore up families’ incomes when a worker needs to take time off and enable more workers to strike a better balance between work and family.
  • Allows people without a documented immigration status who have been in the United States since the end of 2010 to work lawfully and to live in the U.S. without fear of deportation. More technically, the House bill would direct the Department of Homeland Security to allow people to apply for a “parole” immigration status, which would allow them to work lawfully and be protected from deportation. But this status could not last beyond September 30, 2031, so policymakers would have to act to ensure that individuals granted parole through this process do not lose the ability to work lawfully and to live without fear of deportation. While far from a comprehensive immigration reform solution that provides immigrants a pathway to citizenship, this provision would afford people — albeit temporarily — a more secure place in their communities. Many immigrants who could apply for parole are people of color.
  • Makes college more affordable by boosting Pell Grants, which help low- and moderate-income students pay for college, and by directly investing in Historically Black Colleges and Universities, Hispanic Serving Institutions, Tribal Colleges and Universities, and Minority Serving Institutions. In addition, the bill invests in colleges’ efforts to improve college success and completion. Both sets of investments will help more students of color afford, attend, and succeed in higher education. And, to expand opportunity for individuals with limited employment opportunities to upgrade their skills and secure better jobs, the bill increases investments in workforce development programs such as job training, apprenticeship, and training programs for jobs in high-demand industries.

BBB finances these measures to foster a more equitable recovery with revenue increases affecting wealthy households and large corporations and savings from reducing the cost of prescription drugs. These revenue measures will also push back against growing inequality of income and wealth. Centuries of racism and discrimination in employment, housing, education, and the criminal justice system have systematically locked Black, Indigenous, and other people of color out of economic opportunities, which is reflected in income and wealth inequality today. In 2019, for example, white families’ median net worth was nearly eight times higher than Black families’ and five times higher than Hispanic families’. And just 8 percent of the highest-income families (the top 1 percent) identify as Black, Latino, or American Indian or Alaska Native, even though these groups account for more than 35 percent of all families, according to the Institute on Taxation and Economic Policy. BBB will move the tax code in the direction of reducing racial disparities.