02/09/2017 | Press release | Distributed by Public on 02/17/2017 10:09
The Promoting Affordable Childcare for Everyone (PACE) Act of 2017 has been introduced in the 115th Congress by Senate co-sponsors Angus King (I-Maine) and Richard Burr (R-N.C.). In a statement about the bill, the senators expressed concern that low-income families are now spending more than 30 percent of their incomes on child care costs.
The legislation (as explained in a summary of the act) would make important changes to the current Child and Dependent Care Tax Credit (CDCTC) aimed at broadening supports for families with childcare needs. The bill includes provisions for:
The legislation would also make changes to Dependent Care Flexible Spending Accounts (FSAs) by:
The bill would help families with school-age children cover the cost of afterschool and summer learning programs for children up to the age of 13.
The bipartisan bill's introduction in the Senate comes on the heels of President Trump's child care proposal, unveiled last fall during the presidential campaign, and developed in partnership with his daughter Ivanka. In mid-January, before taking office, Trump's transition staff met with the Ways and Means committee to discuss the proposal which, in combination with new maternity leave provisions, would have a $300 billion price tag according to CNN reports.
Trump's proposal would alter the Child and Dependent Care Tax Credit so that any couple earning up to $500,000 (or individual earning up to $250,000) would be able to deduct up to the average cost of child care in their state. Additionally, low-income families that benefit from the Earned Income Tax Credit would be eligible for rebates of up to $1,200. The New York Times reports that families would choose between the new rebate for low-income families or the old CDCTC, so that additional benefits to these low-income families would be slight.
Trump's modifications to Dependent Care Savings Accounts, according to a CNBC article, would match at 50 percent a low income family's saving up to $1000 for these tax-deductible accounts. The accounts could be saved and withdrawn tax free so long as they were spent on eligible expenditures such as 'traditional child care, afterschool programs, and school tuition.' Tax analysts reported that this provision would also have greater effects for higher income tax-payers.
The White House 'Issues' webpage does not currently list child care as a policy issue.