An unlikely duo has teamed up to try to fight the US’s childcare problem – Business Insider
In an era when bipartisan efforts in Washington have been few and
far between, two members of Congress — a Republican and a
Democrat — have unveiled a new bill aimed at making childcare
more affordable, hoping to garner support for potential inclusion
in a coming tax plan.
Last week, Reps. Kevin Yoder of Kansas and Stephanie Murphy of
Florida introduced the Promoting Affordable Childcare for
Everyone Act in the House. The legislation aims to make childcare
more affordable for families by modestly tweaking existing tax
credits and raising spending-account limits used to cover the
costs of childcare.
The PACE Act proposes making the Child and Dependent Care Tax
Credit — a deductible tax credit for parents of children under 13
— refundable, allowing families with no tax liabilities to take
advantage of the credit. Many families today cannot benefit from
the credits because they don’t earn enough to pay income taxes.
The bill would also tie the credit’s value to inflation to meet
rising childcare costs.
“As we begin to look to modernize the tax code, we have to be
responsive to those families that are struggling,” Yoder said in
an interview. “Childcare is one of the biggest line items on
young families’ monthly budget.”
According to the bill’s proponents, for a lower-income family of
four making less than $15,000 a year, the bill would increase
benefits from nothing today to a refundable $3,000 credit. For a
family of four making $55,000 a year, the legislation would
increase the tax refund by $900.
The plan would also raise the cap on the amount families could
put into flexible spending accounts to $7,500 from $5,000, a move
the bill’s crafters said would effectively lower taxes on
The proposal is a companion to the PACE bill introduced by Sens.
Angus King, a Maine independent who caucuses with Democrats, and
Richard Burr, a Republican from North Carolina, in the chamber
earlier this year.
Childcare costs remain a heavy burden for millions of Americans.
According to a 2015 Center for American Progress
report, American families on average spend 29% of their
after-tax income on childcare costs, which can exceed tuition and
fees for a public four-year college in 31 states and the District
The PACE Act isn’t the only affordable-childcare plan that has
been floated this year.
In June, Sens. Kirsten Gillibrand, a New York Democrat, and Tom
Cotton, a Republican from Arkansas, introduced a bill aimed at
improving childcare for military families by experimenting with
public-private military partnerships.
President Donald Trump’s administration has also nodded at trying
to make childcare affordable, dispatching Ivanka Trump to discuss
the issue at high-profile events.
But the White House has waffled and stalled on the issue.
Trump’s initial proposed plan relied on tax deductions, which
tend to benefit individuals and families with higher tax burdens.
But in April, The Washington Post reported that the president was
shifting course from an earlier childcare bill that critics said
disproportionately benefit well-off families.
A senior administration official told The Post that the
administration was considering a proposal similar to PACE that
would increase the value of the credits and make the tax credit
The bill is more modest than aggressive plans that Democrats have
proposed in the past, including proposals that would cap family
childcare spending at 10% of income.
Murphy acknowledges that the plan doesn’t go as far as she would
like but says the bill is most likely one of the best that could
be signed into law during this congressional term.
“You can’t let the perfect get in the way of making progress,”
Murphy told Business Insider. “We need to get this passed and
move incrementally towards addressing a variety of issues facing
Yoder’s support for the bipartisan bill comes as he faces what
will probably be a difficult reelection. He is one of 23
Republican members of Congress whose districts were won by
Hillary Clinton last year. He won reelection by a small margin,
and Democratic groups have already invested money in unseating
him in 2018.
Both Yoder and Murphy said they weren’t particularly conscious of
any potential political implications — positive or negative — of
“She’s a target of the NRCC, and I’m a target of the DCCC,” Yoder
said of the committees that seek to bolster their respective
party in the House, “but frankly, beyond that, we’re just trying
to do our jobs. These elections happen so frequently already, we
certainly think in the nonelection year, we can focus on policies
that help our constituents and solve problems and tune out all
that political chatter at least for a little while.”