24 Jul 2024 BPC ACTION LETTER FOR THE RECORD: SENATE FINANCE HEARING ON CHILD CARE in Children
On behalf of the Bipartisan Policy Center’s Early Childhood Initiative (ECI), BPC Action submitted a letter for the record regarding the Senate Finance Committee hearing, Examining the State of Child Care: How Federal Policy Solutions Can Support Families, Close Existing Gaps, and Strengthen Economic Growth, on July 9.
Access to affordable, high-quality child care remains a challenge for working parents. A BPC-Artemis survey of non-working Americans found one in three cited caring for children as the main reason why they are not in the labor force.
When a lack of child care constrains parents’ ability to work, it creates ripples in our broader economy. Not only are individual households affected, but businesses and tax revenues suffer.
- Businesses lose productivity and incur costs associated with recruiting and training new staff.
- Families lose income and their overall spending capacity is reduced.
- Federal and state governments lose tax revenue.
BPC Action recommends Congress modernize tax incentives that support business and enable parents to enter or remain in the workforce:
- Employer-Provided Child Care Tax Credit (45F)
- Employer Credit for Paid Family and Medical Leave (45S)
- Child and Dependent Care Tax Credit (CDCTC)
- Dependent Care Assistance Plans (DCAPs)
Taken together, the federal government’s existing efforts (45F, 45S, the CDCTC, and DCAPs) can reduce the financial burden of child care on working parents and businesses if they are modified. Enacting BPC’s recommendations would increase the impact of these tax provisions on working families, the broader American workforce, and the productivity of our entire economy.
Read the full letter to committee leadership here.
