Women’s Economic Well-Being Depends on Reliable Child Care. Can Bipartisan Lawmakers Fix the Broken System?
by Olivia Rockeman
By now, it’s a well-established fact that the U.S. child care system is in need of some serious fixes. Nearly 16,000 child care centers closed during the pandemic. Families are spending a significant portion of their income on child and infant care: Child care costs represent between 8% and 19.3% of median family income per child, according to the U.S. Department of Labor. Waitlists for day care slots in some cities are over a year long. Many child care professionals have left the industry for good.
The child care industry is broken for multiple reasons: While demand far outpaces supply, child care is also fundamentally an expensive proposition. Amerians want safe, appropriate environments for highly vulnerable infants and young children, which require specific staffing ratios. It’s a seemingly simple problem that requires complex solutions from businesses, families, and governments.
On the surface, it might appear as though the U.S. government has lost its focus on child care. Federal subsidies meant to stabilize the industry after the pandemic ran out in recent months. Meanwhile, costs for parents continue to rise, and providers in states like North Carolina have said they’ll have to close if lawmakers don’t step up with additional financial support.
“If you have that opportunity to stay home, I think it is remarkable. But if accessibility and affordability of child care is an impediment to you reentering, we felt like it was important for us to come together to have a common sense, bipartisan solution,” Senator Katie Britt, a mother of two teenagers, told ABC News in July 2024.
For Senators Katie Britt (R-AL) and Tim Kaine (D-VA), however, child care remains top of mind. In July, the senators introduced two pieces of legislation that, together, aim to make child care more accessible by strengthening existing tax credits and increasing the supply of child care providers and workers.
“If you have that opportunity to stay home, I think it is remarkable. But if accessibility and affordability of child care is an impediment to you reentering, we felt like it was important for us to come together to have a common sense, bipartisan solution,” Sen. Britt, a mother of two teenagers, told ABC News in July.
Solving these issues is crucial for the majority of American families with children. Dependable child care not only improves women’s long-term economic outcomes but also enhances parental and child health and well-being.
A 2023 working paper from the White House Council of Economic Advisers showed that when child care is within reach, parents are better able to balance work and family responsibilities, leading to improved family dynamics and child development. Conversely, when reliable child care is lacking, families may face increased stress and challenges that affect both parents and children. Expanding child care availability, therefore, directly impacts the overall well-being of families, not just economic factors.
Senator Britt and Kaine’s proposals are unique because—in addition to increasing the size of the Child and Dependent Care Tax Credit (CDCTC) and making it refundable—they seek to provide incentives for employers to open their own child care facilities and address turnover among child care workers.
Child care is generally not a partisan issue. About 60% of Republican voters and approximately 80% of Democrats say that federal funding for child care and early learning programs should be increased, according to a bipartisan 2022 poll released by the First Five Years Fund (FFYF). Senators Britt and Kaine aren’t the first bipartisan pair to bring forward legislation that attempts to reduce the financial burden of child care. In the first half of 2024, eight bipartisan child care-related bills were introduced in Congress.
In February of 2024, Representatives Claudia Tenney (R-NY) and Brad Schneider (D-IL) introduced the Promoting Affordable Childcare for Everyone (PACE) Act, which aims to update federal child care incentives. Separately, the Child Care Investment Act of 2023, introduced by Representatives Salud Carbajal (D-CA) and Lori Chavez-DeRemer (R-OR), seeks to increase the amount of pre-tax income parents can set aside for child care expenses.
Senator Britt and Kaine’s proposals are unique because — in addition to increasing the size of the Child and Dependent Care Tax Credit (CDCTC) and making it refundable — they seek to provide incentives for employers to open their own child care facilities and address turnover among child care workers.
The Child Care Availability and Affordability Act, the first of Sen. Britt and Kaine’s two bills, would increase the CDCTC to a maximum of $2,500 for families with one child and $4,000 for families with more. Importantly, it would make the tax credit refundable, which is particularly helpful for lower-income families. The bill would also allow families to deduct up to $7,500 of their child care expenses through the Dependent Care Assistance Program, 50% more than they can currently.
“Nobody does child care to make money, but many stop doing it or never go into it because of money,” Kaine says.
Those incentives for families would lower the cost of child care, but they won’t fix another more vexing issue: Almost one-third of parents searching for child care cannot find a place for their child, according to an assessment of child care gaps conducted by the Bipartisan Policy Center, a non-profit organization based in Washington, D.C.
To address the supply issue, Senators Britt and Kaine also propose bolstering the underutilized Employer-Provided Child Care Tax Credit, also known as 45F, which incentivizes employers to provide child care to their employees. The legislation would increase the maximum credit from $150,000 to $500,000.
Currently, the take-up rates for 45F are quite low. Among the roughly 70,000 corporate income tax returns filed for general business credits in 2016, between 169 and 278 corporate income tax returns claimed the Employer-Provided Child Care Credit, according to a recent report from the U.S. Government Accountability Office.
There’s hope that the Kaine-Britt proposal could encourage and reward businesses to provide on-site child care, but “increasing supply might need solutions beyond the tax code,” according to the Urban-Brookings Tax Policy Center.
Child care supply can also be susceptible to worker shortages. While numbers are slowly rebounding, between April and August 2024, 16,000 workers left the child care industry, according to the U.S. Bureau of Labor Statistics. That’s likely because federal emergency funds that supported daycare centers during the pandemic ran out and because many employees sought higher pay elsewhere. The average child care employee earns just $14.60 an hour.
Kaine, whose son is an early childhood educator, told CBS19 News many are leaving because of low pay.
“Nobody does child care to make money, but many stop doing it or never go into it because of money,” Kaine said.
The Child Care Workforce Act, the second part of Sen. Britt and Kaine’s plan, would establish a grant program for states and localities that want to expand pay supplement programs for child care workers to increase supply and reduce turnover. Grantees would provide supplements, paid out at least quarterly, directly to both home- and center-based child care providers licensed by states.
Similar programs in Virginia, Nebraska, Oklahoma, and Maine have improved supply of workers, educator turnover, and worker well-being and satisfaction, according to Senators Britt and Kaine. For example, in January 2024 Maine announced the first round of increased and tiered monthly stipends for child care workers ranging from $275 to $625 across three tiers based on education and experience. The funds are provided through the Maine Early Childhood Workforce Salary Supplement System, which provides assistance to eligible child care providers to address challenges in the child care workforce and ensure access to affordable, high-quality child care options for Maine families.
The need for modern-day child care legislation, like many of America’s most complex challenges, didn’t emerge overnight. In 1971, the Comprehensive Child Development Act proposed a multibillion-dollar national day care system for three- and four-year-olds. The bill passed both the House and Senate but was vetoed by President Richard Nixon, who expressed concerns that it might favor communal approaches to child-rearing over family-centered ones and called it fiscally irresponsible.
Since then, the country has relied primarily on a diverse network of private providers, including family-based, religious, and informal options. While this system offers families a variety of choices, limited supply in certain areas can push prices up, making child care less affordable for some families of low and middle income.
Lowering child care costs for families likely won’t result from one major federally-funded program or a few changes to the tax code. Fixing the system will require buy-in from the White House, state and local lawmakers, businesses, workers, and families.
While Sen. Britt and Kaine’s proposals, and others like them, aren’t as ambitious as some child care advocates would hope, they mark a significant step in the right direction. Two-thirds of families are struggling to find care for their children: It’s time to champion bipartisan solutions that move the needle forward rather than waiting for sweeping federal programs that might never come.
Olivia Rockeman is an Engage contributor and freelance writer whose work focuses on how people and institutions respond to changing economic, environmental, and cultural trends.
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