Obama’s budget puts historic focus on child care and working families

Inequality and wage stagnation, traditional talking points of the left, seem increasingly to be bipartisan concerns. Democrats and Republicans alike want to be known for their support of working families, a population put front and center in President Barack Obama’s budget, released this week.

Much of the $4 trillion plan will be rejected straightaway by the Republican Congress. But there could be substantial overlap between the parties when it comes to child care and other work supports, judging from last year’s bipartisan reauthorization of the federal child care block grant and the emerging pro-family agenda of Sens. Marco Rubio, R-Fla., and Mike Lee, R-Utah. 

More than any other president, Obama has thrown his rhetorical weight behind the unmet demands of the 1970s women’s movement such as equal pay, child care access and paid family and sick leave. His new plan includes a comprehensive but individually modest menu of benefits for children and parents — those living near the poverty line as well as households with six-figure earnings. It reflects the reality that most women, especially at lower levels of income and educational attainment, work inside and outside the home.

The White House budget puts an unprecedented focus on parenting supports, from birth to kindergarten. It starts with the fact that the United States is alone among developed countries in providing no government-mandated paid parental, sick or family leave to workers. Obama would set aside $2 billion to reimburse five states for the costs of implementing paid leave, building on a trend of similar local programs.

In terms of child care, the plan has two prongs. Households at up to 200 percent of the federal poverty level (equal to about $38,000 in annual income for two parents with one child) would be guaranteed a small public subsidy, an improvement to the existing, underfunded system. Families earning above this threshold would get their benefit at tax time: a reduced burden of up to $3,000 for each dependent in paid care, triple the current maximum.

But parents should know this is not a cash return. The proposed child care credit is nonrefundable, meaning that it kicks in only for those who have already paid an equal or greater amount in taxes and typically has the effect of simply lessening what is owed. Some states have a refundable version: in Colorado, for instance, a per-child rebate for households earning up to $60,000 annually.

The child care tax credit is an “anti-poverty initiative started to encourage people to work,” said Caroline Chen, a professor in the tax clinic at Santa Clara University School of Law. “Three thousand dollars would be significant, given the high cost of child care.”

It’s not uncommon for families across the U.S. to spend as much on child care as rent. The Obama budget “recognizes that child care expenses are a challenge up and down the economic spectrum,” said Bill Jaeger of the Colorado Children's Campaign. “Moderate-income families are not eligible for [subsidies] and can’t take advantage of the [current] tax credit. They are not able to afford the high cost of child care.”

“This is the first year child care is not our biggest expense,” said Aaron, a graduate student and freelancer in Brooklyn, N.Y., who asked that only his first name be printed. He and his wife together earn about $80,000, a quarter of which goes to high-quality child care for their toddler. The proportion would have been even greater had they not secured a spot for their other child — a 4-year-old — in a free prekindergarten program recently established in New York City.

Obama has advocated for preschool for all — or at least for struggling families at or below 200 percent of the federal poverty level. The White House budget would allocate $75 billion over 10 years to universal pre-K, again through state partnerships. It would also expand Early Head Start, a high-quality early education program for 3-year-olds, to 30,000 more children, and would stretch Head Start (for 4-year-olds) to a full-day program.  

The costs of these proposals would, in theory, be covered through taxes on tobacco and slightly increased levies on wealthy individuals and multinational corporations operating abroad. Obama’s promised war on income inequality more closely resembles a skirmish but has the right building blocks in mind, say family advocates.

“Women’s work, particularly among mothers working when kids are young, has stayed at very high levels since the ’90s, and that’s starting to affect who the decision-makers are,” said Olivia Golden, executive director of the policy group CLASP. “The question of what will actually happen this year is hard to answer, but it’s a huge statement. [The budget] is very responsive to the reality of people’s lives.”