Guaranteeing Child Care For All Low-Income Families

Oct 01, 2007

The Future of Children s latest publication, The Next Generation of Antipoverty Policies, focuses on eight policy proposals for reducing poverty in the U.S., including a proposal to restructure federal child care subsidy programs and federal tax policy related to child care.  This proposal is detailed in an article titled "Next Steps for Federal Child Care Policy" by Mark Greenberg and is based on the premise that current U.S. child care strategies fail to meet four policy goals: that every parent who needs quality child care should be able to afford it; all families should be able to place their children in settings that foster education and healthy development; all families should be able to choose among child care providers; and a set of good child care choices should be available to families.  After demonstrating that these goals are not being met by current child care policies the article asserts that they can be achieved by making the Child and Dependent Care Tax Credit refundable and expanding it to cover 50 percent of child care cost for low-income families and replacing the federal child care block grant with a guarantee for child care assistance to families earning below 200 percent of poverty.  This guarantee would be administered by the states through a federal-state funding formula in which families pay a co-payment that increases with their income, and states pay the remaining cost of care.  States would also be responsible for improving the quality of child care through the use of a federally funded Early Care and Education Strategy Fund.   It is estimated that the Child and Dependent Care Tax Credit changes would cost nearly $25 billion over five years and the child care guarantee and Early Care and Education Strategy Fund is estimated to cost $18 billion annually.