The Trump administration announced that they are now considering changes to the Child and Dependent Care Tax Credit, which gives parents a small tax benefit on their previous year’s child care bill. While the administration has laid out a plan that prioritizes tax cuts for wealthy corporations, the details on helping hard-working families afford child care remain fuzzy. Instead of giving huge tax cuts to corporations, the focus should be on working families.
Here are five questions the Trump administration needs to answer on its child care plan.
- How much help will the plan actually provide to hard-working families struggling to pay for child care?
Child care is one of the biggest expenses that a family faces, and it is critical to helping parents keep their jobs and provide for their children’s basic needs. A typical family of four earning $40,000 per year will spend 20 percent of their monthly income on child care. The annual cost of care for one child in a center is about $10,000. Unless the Trump administration makes a significant investment in child care, families will continue to struggle with these costs.
- How will this plan help families pay their child care bill each week or month?
A tax credit comes to families only once a year, after they file their taxes for the previous year. However, in day-to-day life, families must pay their child care providers on a weekly or monthly basis. If families cannot afford their child care throughout the year, a tax credit is too little, too late. The Trump administration needs to explain how they will provide child care assistance to families when they need it, allowing parents to continue working.
- How will dependent savings accounts help families living paycheck to paycheck?
Trump has also proposed dependent care savings accounts, which allow families to save money tax-free to use for child care, private school tuition, or extracurricular activities such as horseback riding lessons. However, many families live paycheck to paycheck and do not have disposable income to take advantage of these accounts. In fact, 46 percent of Americans report that they do not have $400 to cover an unexpected emergency. Meanwhile, wealthy families will take advantage of these accounts as tax shelters and stash funds tax free to use at their leisure.
- How will the plan address child care quality and access?
Many parents struggle to find high-quality child care in their neighborhood. Approximately 42 percent of children under age 5 live in child care deserts, areas where the need for child care grossly outpaces the supply. The problem is even more pronounced in rural areas, where 55 percent of young children live in child care deserts. A tax credit will do nothing to build the supply of child care—nor will it help providers improve its quality. One study found that just 10 percent of child care providers in the United States are high quality. Given that the earliest years of a child’s life are critical to brain development and foundational skills that set children up for academic success, the Trump administration must address how they will ensure child care providers can provide enriching early learning environments for young children.
- What about child care workers whose wages are so low that they struggle to make ends meet?
A typical child care provider makes about $10 per hour. About half of child care providers have wages that are so low that they qualify for public assistance. As a result, many child care workers face financial insecurity, health issues, and stress from poor working conditions. The Trump administration must articulate how they will support the child care workforce by addressing the chronically low wages and limited professional development opportunities available to workers. These professionals are the linchpin upon which the rest of labor force depends to care for their children while they are working.
President Trump claims he supports women and families, but he continues to propose ideas that provide no relief. It’s time the Administration was clear on a policy that delivers on their rhetoric.
Katie Hamm is the Vice President for Early Childhood Policy at the Center for American Progress.