Childcare is becoming more and more difficult for families to afford in Maine and around the country. Not only is that a problem for our families, it’s a problem for our economy. Parents shouldn’t be faced with an impossible choice between childcare and their jobs, and that’s why I’ve joined with one of my Republican colleagues on a bill to support working families.
Together with my friend Senator Richard Burr (R-N.C.), I’ve introduced the Promoting Affordable Childcare for Everyone (PACE) Act in order to improve the federal tax policies that help make childcare more affordable for families across America. By modernizing and updating the tax policies that reduce the cost of childcare, the PACE Act would substantially improve the federal tax benefits that support working families.
In almost half the country, the annual cost of full-time childcare for a four-year-old is greater than the average cost of in-state tuition at a 4-year college. That is astounding, and it puts real pressure on American families — especially low-wage workers who, on average, spend more than 30 percent of their income on childcare.
The federal government has created two tax benefits to help working families offset the costs of childcare: the Child and Dependent Care Tax Credit (CDCTC) and Dependent Care Flexible Spending Accounts (FSAs). And while these initiatives are well-intended, they are in need of an update. Because neither of these policies have kept up with inflation, they have become less useful over time as the cost of childcare has increased.
That’s where the PACE Act comes in. This bipartisan bill would take several steps to update the CDCTC and FSAs — not only to make them more generous, but to make sure they are adjusted with inflation to keep pace with changes in the economy. More specifically, the bill would make the CDCTC refundable to expand its benefit for low-wage workers, and would also increase its value to put more money back in the pockets of working parents.
The PACE Act is just one part of a push I’m making to help strengthen our workforce and tackle poverty at the same time. I believe we can improve federal programs to make them more effective at helping to lift people out of poverty, get people off of government assistance, and grow our economy. I’ve also introduced two other pieces of legislation — the EMPOWER Act and the LADDER Act — to support workforce development and give people the skills and opportunities they need to get ahead. There is no one solution; but if we come at this issue from multiple sides, we can strengthen our economy for everyone.
When it comes to childcare and the economy, it’s really this simple: we can’t get people back to work if they can’t afford to pay for childcare and if our existing programs aren’t helping them like they should. And we can’t expect Maine’s economy to grow if people aren’t entering the workforce. The PACE Act can go a long way to improve the childcare landscape for our working families.
