Larson, House Democratic Leaders Introduce American Affordability Act of 2025 to Take on Cost-of-Living Crisis

Washington, D.C. - Today, House Social Security Subcommittee Ranking Member John B. Larson (CT-01) announced the introduction of the American Affordability Act of 2025 with Tax Subcommittee Ranking Member Mike Thompson (CA-04), and Ways and Means Committee Ranking Member Richard E. Neal (MA-01). Their plan takes on the cost-of-living crisis squeezing families nationwide, with real solutions to expand affordable housing, lower energy bills, cut taxes for working families, help student loan borrowers, and protect households from skyrocketing healthcare premiums.

It includes Rep. Larson's Neighborhood Homes Investment Actand Revitalizing Downtowns and Main Streets Actto expand affordable housing options, as well as his Hydrogen Production and Investment Tax Credit Actto spur the development of clean energy.

"Americans across the country are getting squeezed by high costs everywhere they look, from energy bills to health care premiums, groceries, and rent," said Larson. "Trump's cost-raising tariffs, cancellation of clean energy projects, and devastating health care cuts have only made it more difficult for families to make ends meet. While President Trump calls affordability a 'hoax' and pushes tax breaks for his billionaire friends, my Democratic colleagues and I are coming together with a real plan that takes on this cost-of-living crisis and cuts taxes for working families, not the wealthy."

"Families are doing everything right and still falling behind as costs keep rising," said Thompson. "The American Affordability Act is about real relief for families: affordable housing, lower energy bills, more affordable childcare and healthcare, and bigger paychecks. This bill delivers targeted tax relief and smart investments that help families make ends meet and restores the promise that hard work should be enough to get ahead in our country."

"While Donald Trump projects and dismisses affordability fears as a 'hoax,' Democrats have been and always will be at the front of the fight to lower costs for everyday workers and families. Tax Ranking Member Mike Thompson knows that whether it's tackling the housing crisis, making childcare more affordable, or lowering health and energy costs, we have so much work to do to ease the minds of the American people and foster opportunity. The American Affordability Act is a blueprint for the next step in our fight for what we are united to deliver: lower costs and easier, better lives," said Neal.

The American Affordability Act:

Expands Access to Affordable Housing

• Creates the first-ever monthly Renter Tax Credit for individuals and families paying more than 30% of their income on rent and creates a First-Time Homebuyer Tax Credit to help low- and middle-income earners

• Creates a new tax credit to bridge the gap between the cost of building or repairing a home and the home's value once it is built, powering the development of 500,000 affordable, single-family homes over the next ten years

• Incentivizes the conversion of vacant office spaces and other commercial properties into new housing, reserving at least 20% of new units for low-income residents

• Increases the homeowner capital gains tax exemption to encourage more home sales and reduce the cost to buy a home, doubling the threshold to $500,000 for single filers and $1 million for joint filers

Lowers Energy Costs

• Creates a new 30% tax credit for long-range electric transmission to lower the cost of grid modernization projects, taking steps to prevent mass power outages and lower ratepayer bills

• Restores tax credits for homeowners to install home energy efficiency upgrades, solar panels, geothermal, and other cost-reducing power sources

• Spurs the development of American-made clean energy by providing a tax credit to companies that reduce carbon emissions by producing "green" and "blue" hydrogen and fuel cells

• Authorizes tax credits to purchase new and used electric vehicles and electric bikes

Stops Trump Healthcare Price Hikes

• Permanently extends expiring Affordable Care Act tax credits, protecting 112,000 Connecticut residents from sky-high premium hikes

• Prevents insurance providers from dropping vaccine coverage due to Secretary Kennedy's anti-science restrictions, including coverage for MMR, COVID-19 and Hepatitis B shots

Cuts Taxes for Families and Workers

• Restores the expanded Child Tax Credit for working parents, providing monthly payments of $300 for each child over the age of six and $360 for each child under the age of six

• Extends the Earned Income Tax Credit for adults without children and expands eligibility to cover working young adults

• Permanently extends tax cuts for tipped workers, and expands "no tax on tips" to include automatic gratuities

• Expands the $250 teacher expense tax deduction to include early childhood educators

Makes Childcare More Affordable

• Increases the maximum dependent care Flexible Spending Account (FSA) contribution from $7,500 to $10,000, automatically adjusting the contribution limit for inflation

• Creates a new $5,000 refundable tax credit to cover startup costs needed to open family childcare centers

• Makes the adoption tax credit fully refundable, opening the door for more low-income families to pursue adoption

• Creates a new tax credit to support working family caregivers

Helps Student Loan Borrowers

• Doubles the student loan interest tax deduction for married couples, to $2,500 per person and makes any forgiven student loans tax-free

• Expands eligibility for the American Opportunity Tax Credit, to support students during the first six years of their higher education with up to $2,000 per year

• Excludes Pell Grants from income, ensuring aid received through this program is tax-free for students

Other cosponsors of the American Affordability Actinclude: Wesley Bell (MO-01), Donald Beyer (VA-08), Brendan Boyle (PA-02), Judy Chu (CA-28), Angie Craig (MN-02), Danny Davis (IL-07), Rosa DeLauro (CT-03), Suzan DelBene (WA-01), Dwight Evans (PA-03), John Garamendi (CA-08), Daniel Goldman (NY-10), Jimmy Gomez (CA-34), Steven Horsford (NV-04), Julie Johnson (TX-32), Timothy Kennedy (NY-26), Doris Matsui (CA-07), Sarah McBride (DE-AL), Kristen McDonald Rivet (MI-08), Morgan McGarvey (KY-03), Gwen Moore (WI-04), Frank Mrvan (IN-01), Jimmy Panetta (CA-19), Stacey Plaskett (VI-AL), Mike Quigley (IL-05), Andrea Salinas (OR-06), Linda Sanchez (CA-38), Bradley Schneider (IL-10), Hillary Scholten (MI-03), Terri Sewell (AL-07), Tom Suozzi (NY-03), and Dina Titus (NV-01).

Read the full bill text HERE.