High-quality, reliable child care is essential for parents to be able to go to work and for children’s success in school and beyond. Yet for too many families, particularly low- and moderate-income families, this care is out of reach. But recent events are signaling more interest among policymakers to address this critical issue.
Last week, Senator Patty Murray (D-WA) and Representative Bobby Scott (D-3rd/VA) took a significant step forward by introducing the Child Care for Working Families Act. This bill would make significant strides towards fixing the serious gaps in our child care system and supporting families and children. It would dramatically expand access to high-quality care by ensuring that no family under 150% of State Median income would spend more than 7% of their income on child care. It would also provide funding to increase compensation for providers and make more training opportunities available, increase the supply of child care in areas with shortages, and improve the quality of care.
In addition to supporting significantly increased investments (such as those in the Child Care for Working Families Act), policymakers are considering improving tax benefits to families to help them meet their child care expenses. The federal Child and Dependent Care Tax Credit (CDCTC) is designed to help working families with the cost of the child care they need for parents to work. But the CDCTC needs to be improved – in part, because many low-income families are unable to fully benefit from the credit because it is nonrefundable and does not reflect the rising costs of child care.
In last Thursday’s Senate Committee on Finance hearing on Individual Tax Reform, Senator Bob Casey (D-PA) highlighted the high cost of child care – noting that in 33 states and the District of Columbia, infant care costs exceed in-state public college tuition. He referenced the Child Care for Working Families Act, and asked how tax credits could help low-income families better afford high- quality child care.
One of the expert witnesses, NYU law professor Lily Batchelder, recommended structuring child care tax benefits as a refundable tax credit that would provide more benefits to the families who struggle the most with child care costs. Senator Casey’s Child and Dependent Care Tax Credit Enhancement Act of 2017 is one of several proposals that would significantly improve the Child and Dependent Care Tax Credit, including by making it refundable.
Child care is fundamental. There is an upswing of momentum to help hardworking families better access high-quality child care, which is why there is growing support for proposals – such as the Child Care for Working Families Act and improving the CDCTC – that would help even more families afford the reliable child care they so desperately need.