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The Senate Finance Committee has released the text of its budget reconciliation bill. Like the House-passed version, the Senate bill would harm families and early educators by making drastic cuts to vital programs that families rely on and reducing the revenue available to invest in critical programs like child care. The child care provisions included in the Senate bill would do little to mitigate these immense harms and largely would not reach the families who most struggle to afford child care.

  • Tax breaks for the rich deplete revenues for child care and other programs for families. In order to tackle the child care crisis in this country, we need to greatly expand investments in the child care system and significantly increase direct child care assistance. But both the House and Senate versions of the bill would cut trillions in federal revenues, a massive giveaway to wealthy individuals and big corporations that would come at the cost of investments in women and families. It will put the transformative changes to child care that we need further out of reach.
  • The program cuts will hurt child care providers and the families who struggle most to afford child care. Both versions of the bill make drastic cuts to programs like Medicaid and SNAP (formerly known as food stamps), which would harm families who struggle most to afford necessities like child care. Additionally, early educators disproportionately rely on basic needs programs, with nearly 28 percent covered by Medicaid. Early educators already struggle to make ends meet, and these cuts would push them further into economic precarity. 
  • The bill targets and harms immigrant families, endangering early educators, immigrant communities, and the child care system. Both versions of the bill specifically exclude immigrant families from tax benefits and basic needs programs, including many immigrants who are lawfully present in the country. This will deprive many immigrants–who represent 20 percent of the early educator workforce–of food assistance, health care, and income support. The bills also increase funding for immigration enforcement activities, which would put early educators at risk and undermine the child care system that relies on their work.
  • The child care provisions included in the bills do not meaningfully help early educators, address the cost of care, or build the supply of care.
    • Both the House-passed bill and Senate bill would expand the 45F Tax Credit for Employer-Provided Child Care, which is intended to incentivize employers to provide child care benefits to their employees. However, in practice, the credit is not widely utilized and largely benefits big corporate employers who can afford to, or already provide, child care services to their employees. The bills increase the size of the credit, but the proposed credit amount still falls far short of the tremendous cost of establishing an on-site child care center—meaning that even the expanded credit would be unlikely to meaningfully increase the child care supply or employee access to child care services. 
    • The Senate version of the bill would expand the Dependent Care Assistance Program (DCAP). DCAPs are voluntary benefits that employers can offer that provide tax savings for employees who can afford to put money aside for child and dependent care expenses. DCAPs are mostly available to high-income earners in specific industries. Importantly, DCAPs do not provide more resources for care, limiting their usefulness for families most in need of help accessing and affording child care. The Senate bill would increase the amount that employees can contribute to their accounts, which would only benefit higher earners who have access to DCAPs in the first place.
    • The Senate version of the bill would modestly increase the size of the Child and Dependent Care Tax Credit (CDCTC), which helps some families cover some of their work-related, out-of-pocket child care expenses. However, under current law, families with low incomes receive little to no benefit from the CDCTC because the CDCDTC is not refundable, and this expansion would do nothing to make the credit more available to them. Additionally, even for families who would benefit from the proposed increase to the size of the CDCTC, the CDCTC would still be insufficient to cover the immense cost of child care.  

The tax proposals related to child care in the Senate Finance Committee’s legislation would not meaningfully address the child care crisis. Overall, this bill prioritizes the wealthiest, reduces revenues for programs like child care, attacks immigrant families, raises costs, and cuts programs that families rely on.Â