Imagine paying less than half of what you currently pay for child care.
Or be one of the thousands of parents who could send their 3 and 4 year olds to free preschool as the system grows.
These and other ideas for making child care less expensive and more accessible are proposals Washington is seriously considering, with great impetus from the White House.
But there are many hurdles ahead before these breaks can become permanent or even last for years. How will it all be paid for? Can parents figure out the maze of programs for how to claim breaks?
Members of Congress are struggling to understand the blizzard of potential benefits. Sen. Pat Toomey, R-Pa., A seasoned lawmaker and member of the Senate Finance Committee, must have thought for a minute when asked how he would explain the proposals to voters.
“It’s hard to explain,” he said afterwards.
It’s clear: Child care expenses for a California family cost an average of around $ 17,400 per year, the third highest cost in the country. The price of child care for a 4-year-old is on average around $ 11,475 per year, according to data from the White House and the Economic Policy Institute, which compiles statistics from several sources. .
Here are some of the potential ways that the White House plans, which Congress is currently considering, would help California parents:
▪ The 7% cap. A family of four earning less than $ 157,848 – 150% of the state’s median income, according to the Census Bureau – would not pay more than 7% of its income for child care under the Biden plan.
This means that for a typical family earning the state’s median income of $ 105,232, child care expenses would be capped at $ 7,366 per year, according to the non-partisan California Budget and Policy Center.
A median of $ 91,605 for a family of three would mean a cap of $ 6,412 in child care costs. It is not yet clear how the government would make up the difference with child care providers.
In California, children are now eligible for subsidized care if their families earn 85% or less of the median income, if they can secure a place. This means that around 750,000 children aged 0-2 are eligible, although far fewer actually get a place.
Under the Biden plan, all would have access, though precise details remain unclear, and another 300,000 would become eligible for subsidized care, according to the Public Policy Institute of California.
▪ Pre-kindergarten. The proposal to offer a free universal preschool would benefit children aged 3 and 4. Currently, 243,000 children in California benefit from this assistance. The PPIC estimates it could reach $ 1 million as part of the White House plan.
The state’s California State Preschool Program, Head Start, and Transitional Kindergarten now help fund some of these programs.
▪ Tax breaks for childcare and dependents. Parents would get help in the future as the plan would make the increase in the tax credit for child care and dependents permanent this year.
This year, families can get a credit for up to half of their eligible child care expenses for children under 13, up to a maximum of $ 4,000 for a child and $ 8,000 for a child. two or more.
This means that a family earning $ 105,332 and paying $ 7,366 for child care could take out $ 3,683 in taxes.
Families earning less than $ 125,000 per year can get a 50% refund. Those with incomes between $ 125,000 and $ 440,000 could get partial credit.
▪ Tax breaks for children. The Biden plan would also extend the recently increased child tax credit until 2025. This year, it offers qualifying families $ 3,000 for each child aged 6 to 17 and $ 3,600 for those aged 5 and under to. ‘in 2025.
Most of the benefits for Californians would go to households earning less than $ 51,700, according to the Institute for Taxation on Economic Policy.
Can Biden win this fight?
Child care advocates hail the potential changes as a major breakthrough.
“With the early learning and child care provisions included in the (Biden) American Families Plan, there is no doubt that President Biden understands that child care is not just a tabletop issue. kitchen, but a vital pillar of the US economy, ”said Sarah Rittling, executive director of the First Five Years Fund.
There are concerns and obstacles to getting one of the loopholes in the law.
Mario Cardona, head of policy and practice at Child Care Aware of America, said the tax breaks are “significant improvements to ensure families have the resources they need to access child care and promote child care. the health and well-being of their children “.
But, said Cardona, “They are not a substitute for direct investment in child care. We will need a sustained and strong federal investment to develop an affordable, accessible and equitable child care system that values the work of caregivers and serves all communities.
We are also worried about the cost. Biden is proposing a tax increase on the rich to help pay for the proposal.
“The Biden administration is not proposing ways to reduce the cost of child care. They are proposing ways to increase the cost of child care and pass more of the bill to taxpayers, ”warned Andrew Lautz, director of federal policy at the National Taxpayers Union.
Republicans have shown no desire to move forward with raising taxes. The GOP lowered the top tax rate from 39.6% to 37% currently in its 2017 tax cut bill, seen as the iconic achievement of the Trump administration.
The chances of childcare changes going through Congress, however, remain favorable. The Senate could use a special budget process to skip breaks that would require 51 votes for approval. The Senate Democratic caucus has 50 members and Vice President Kamala Harris would break any tie.
This story was originally published June 1, 2021 5:00 a.m.