The American Opportunity Agenda: Make Quality Affordable Childcare Accessible
For new mothers to stay in the workforce, they have to know that there is affordable-quality daycare available. Because how can you keep earning a paycheck for your family when you can’t afford the child care needed so you can get back to work? With paychecks stagnant, hard working parents are having a hard time earning enough to put young children in a child care center, let alone cover other household expenses.
Statistics show that today’s working families must rely more on child care than ever before. A generation ago, a working mother with young children was unusual. In 1975, 39% of mothers with young children worked outside the home; in 2005, that number was 63%. Half of middle-class working moms with children under the age of 5 rely on day care centers or other paid care. Across the nation, more than 6.7 million children are in child care outside the home each day. Families with young children on average spend about $6700 a year on child care, nearly as much as what the average family spends on groceries.
To address the rising cost of child care, Senator Gillibrand is championing flexible options for different types of families with varying needs, to help reduce the cost of quality of child care.
Senator Gillibrand is working to more than double the Dependent and Child Care Tax Credit (DCTC) and Dependent Care Flexible Spending Account (DCFSA). The current child care tax credit was originally capped at $2,400 in 1981. In the nearly thirty years since then, it has increased by only $600 – even though its value, adjusted for inflation, would be close to $5,700. The Right Start Act will increase that ceiling to $6,000 per child, up to $12,000 for two children, restoring it beyond its original value, at a time when child care costs have risen to more than $14,000 for an infant. Additionally, the Right Start Act will make the credit fully refundable, and increases the percentage of eligible benefits up to 50% (from 35%), and increases the maximum credit from $1,050 to $3,000.
Additionally, we should encourage college students to study and work in child care. The Right Start Act will create a new tax credit of $2,000 a year for up to three years for any college graduate who specializes in child care and works at least 1,200 a year in a child care facility.
Finally, Senator Gillibrand has introduced the Child Care Deduction, which will allow families to deduct the costs of child care from their tax liability, up to $14,000. Families that opt not to receive the expanded DCTC, would be able to take the above-the-Line deduction, which would help mitigate the high cost of child care. After all, child care expenses are necessary, non-optional costs to families with working parents that cannot forfeit needed wages. Therefore, it is inherently a business decision.
By making affordable, high quality child care available, we not only help strengthen our children’s development and quality of life, but we create stronger families and a stronger economy.