Schwartz & McMahon: Child Care Shouldn’t Break the Family Bank

Posted May 12, 2010 at 5:48pm

Across the country, working mothers and fathers face an all-too-common dilemma: finding quality child care that won’t break the bank. Putting Americans back to work is central to our economic recovery, but too many families are forced to limit their productivity and earning potential because of the high cost of child care.

[IMGCAP(1)]Who knew that today’s parents would need a trust fund to pay for child care, let alone college? In 39 states, the cost of one year’s worth of infant day care exceeds the cost of one year’s tuition at a four-year public university. In fact, the cost of child care in our two states alone highlights the crippling costs families face. In the state of New York, a parent spends between $11,000 and $14,000 per year on child care; in Pennsylvania, the cost is between $8,000 and $10,000.

Under current law, taxpayers earning less than $43,000 a year receive a credit that’s equal to 35 percent of their expenses. However, the median income in New York is a little more than $70,000, and in Pennsylvania it’s about $50,000, making most families ineligible for the current 35 percent child care tax credit despite the staggering costs that burden the families in our two states.

For two-career families already experiencing tighter budgets in a tight economy and struggling to get ahead, high child care costs are a serious burden.

That’s why we are introducing legislation to nearly double the current tax break families receive for child care costs. If Congress passes our proposal, a typical American family with two children can receive a tax credit to cover up to $2,100 in child care costs, up from just $1,200 under current law.

The Support Working Parents Act would help millions of parents across the country cover the rising cost and necessity of child care. In addition to providing more money for child care, this bill will also give parents a tax credit for the cost of summer camp, after-school care and other child care expenses for school-age children.

We achieve this goal by eliminating a penalty on middle-income families and making the tax code fairer for everyone. For families earning more than $43,000 a year — a figure well below the median national income for two-wage-earner families — the tax credit phases out to just 20 percent of expenses. Our proposal would eliminate this phase-out and allow all families, regardless of their income, to receive the full credit of 35 percent of their child care expenses.

Our proposal is a common-sense step toward modernizing and simplifying the tax code so it recognizes the realities of today’s families. Over the past 35 years, the number of two-income families has nearly doubled, and the cost of child care has skyrocketed. Working parents are the backbone of our economy, and it is time this tax provision caught up with today’s modern family.

Our bill enjoys the support of a number of organizations devoted to helping today’s families succeed, including Third Way, Early Care and Education Consortium, Every Child Matters, First Focus Campaign for Children, and Voices for America’s Children. Vice President Joseph Biden’s Middle Class Task Force also put forth a similar proposal in January.

This initiative will strengthen American families and America’s economy by helping parents meet their responsibilities to their families and their jobs. That’s why we’ll be working hard to enact the Support Working Parents Act.

Rep. Allyson Schwartz is a Democrat from Pennsylvania. Rep. Michael McMahon is a Democrat from New York.