Ivanka Trump isn’t the only Washington rookie championing measures to help working families—you can add Rep. Stephanie Murphy, a freshman Congresswoman from Florida, to that list, too.
Working Mothers
Ivanka Trump isn’t the only Washington rookie championing measures to help working families—you can add Rep. Stephanie Murphy, a freshman Congresswoman from Florida, to that list, too. Along with Rep. Kevin Yoder of Kansas, Murphy recently introduced a bill that would help make childcare more affordable for millions of families.
It’s not the first time members of Congress have drafted legislation to help families cover the skyrocketing cost of childcare—five similar measures have been introduced this year alone. What makes the latest one unique is Murphy is a Democrat and Yoder is a Republican. It’s the only bipartisan bill on the table.
In fact, the Promoting Affordable Childcare for Everyone Act, or PACE Act, shares several similarities to the plan Ivanka Trump has advocated for on behalf of her father's administration: Namely, it would make the Child and Dependent Care Tax Credit refundable, a big step forward for working families. Right now, working parents can use the CDCTC to receive a tax credit for childcare expenses up to an amount of $3,000 for one child and $6,000 for two. Here’s the catch: Low-income families typically receive no benefit because they have little or no federal income tax liability and the CDCTC is not refundable.
“Just by making the credit refundable, over 1 million more families would be able to benefit from the tax credit,” says Amy Matsui, senior counsel and director of government relations for the National Women’s Law Center, which supports the PACE Act.
Both Ivanka's and Murphy’s plans address that problem by giving low-income families money back at tax time. The PACE Act, however, is a bit more generous, giving low-income families $3,000 in credits, versus Ivanka’s $1,200 proposal.
While $3,000 may not seem like a huge amount given today’s exorbitant childcare costs—at an average of $9,589 per year, infant care now carries a higher price tag than college in 33 states—for a family of four making less than $15,000 a year, the credit would be life-changing.
“Childcare costs are increasingly taking over a significant portion of a family's budget, to the point that parents sometimes opt to leave their jobs or cut back on hours to care for their kids,” Murphy tells Working Mother. “In fact, only about 30 percent of families in my state can even afford the cost of infant care.”
The PACE Act differs from Ivanka’s proposal in another big way: It’s not nearly as generous to higher-earning families. Ivanka’s plan would allow couples who make $500,000 or less and single parents earning $250,000 or less to fully deduct the cost of childcare from their taxes (capped at the average cost of childcare for the child’s age in the state)—a move that amounts to a huge tax break for high-income families. That generosity (and an estimated $500 billion price tag) drew criticism from the right and left alike. An analysis by the Tax Policy Center found that 70 percent of the total child-related tax benefits from Ivanka’s plan would go to families making more than $100,000.
Like Ivanka’s plan, the PACE Act would put more money back in working parents’ pockets—just not nearly as much. It increases the amount of allowable expenses for childcare, but the cap remains the same (at $3,000 for one child and $6,000 for two). A middle class family of four making $55,000 a year would get $900 more back at tax time to help pay for childcare.
That more modest approach may increase the likelihood of Republican support for the measure, or one like it, down the road. Murphy says she was happy to hear the Trump administration may now be shifting towards a proposal similar to the PACE Act.
“Most meaningful reforms in our nation’s history have been bipartisan in nature,” she points out. “While Congress is gridlocked by partisan politics, addressing the high cost of childcare should be an area where we can reach consensus as this issue is a concern for all working families, regardless of their party affiliation.”
This article originally appeared in Working Mothers.
