Bipartisan Congressional Briefing on Making the Tax Code Help Working Families with the Cost of Child Care

Earlier this week, the First Five Years Fund, along with the Save the Children Action Network, the National Association for the Education of the Young Child, and KinderCare, hosted a bipartisan, bicameral Hill briefing in partnership with the cosponsors of the Promoting Affordable Childcare for Everyone (PACE) Act – Senator Angus King (I-ME), Representative Kevin Yoder (R-KS) and Stephanie Murphy (D-FL). Supporting the healthy development of young children, beginning at birth, is an important issue that bears significant impact on everyday life in America, yet families today struggle to keep up with the rising cost of quality child care. Members gave remarks on the PACE Act, which would strengthen the Child and Dependent Care Tax Credit (CDCTC), the only existing tax credit designed specifically to help families with the costs of work-related child care expenses. At a time of heightened partisanship, it’s no small feat that an Independent, a Democrat, and a Republican Member of Congress can come together in agreement on an issue – and that issue is consistently early childhood education.

Representative Murphy (D-FL) commended her colleagues on both sides of the aisle for preserving the CDCTC in the tax reform bill as it currently exists in the tax code, and highlighted that: “More work remains to be done. These tax options…need to be updated to reflect today’s child care costs, which have increased by more than 20% in the last 15 years.”

Senator King (I-ME) explained that supporting employees properly with a child care tax credit like the CDCTC is as much a necessary business expense as it is for business-owners to pay rent on their place of business. When employees are not supported in this critical way, it disincentives entering and remaining in the workforce, resulting in the shortage of qualified workers seen today in his home state and across the country:  “If we don’t enable people to work, that has a serious detrimental effect on the American economy.”

Representative Yoder (R-KS) thanked his colleagues on the House Ways and Means Committee, Representative Smith (R-NE) and Representative Noem (R-SD) for their advocacy on the Committee to preserve the CDCTC in the House tax reform bill in the face of many credits across the tax code being eliminated. Representative Yoder emphasized that: “For parents that have to work, we want to make sure that they have the tools at their disposal to make that possible with child care support.”

Panelists included Angel McKinney, the District Leader of Deerwood KinderCare in Miami, Florida, Valerie Collins, a parent of an infant and a three-year-old in Maryland, and Alan Viard, a Resident Scholar at the American Enterprise Institute. As a child care administrator and a business leader, McKinney sees how families have to make hard choices about where to send their children for child care based on the cost, and how accessing the CDCTC can help parents afford quality child care options for their children while they work. As a working mother in a two-income household, Collins shared her experience of navigating for affordable, quality child care for her two young children. Because her three-year-old attended a quality child care with highly trained and committed providers, signs of his autism were recognized by staff and the necessary early interventions were put into place to support his learning and development. Viard addressed the necessity for any work-related cost to be accounted for in the tax code as a way to mitigate the financial hurdles that could keep people out of the workforce, which is the role of the CDCTC in enabling parents to work.

Congressional staffers from Senator King’s and Representative Yoder’s offices illuminated what next steps look like in strengthening the CDCTC in tax reform. With introduction of the Senate tax reform bill forthcoming, it’s worth noting that two members of the Senate Finance Committee, Senator Burr (R-NC) and Senator Heller (R-NV) are both co-sponsors of the Senate PACE Act. As tax reform moves forward, advocates on and off the Hill continue to emphasize how the CDCTC directly helps families provide for themselves while their children benefit from child care, and that expanding it will reduce child care costs and lead to higher work participation, in addition to increased tax revenue.

To view a recording of the briefing, click here.