U.S. Childcare Costs Are Astonishing. Here's How Biden Plans to Help
by Maurie Backman | Updated July 25, 2021 - First published on Jan. 18, 2021
Biden has a plan to ease the burden of childcare at a time when so many families need help.
There's a reason a lot of parents fall out of the workforce after having kids -- the high cost of childcare means it's not worth going to work. An estimated 55% of U.S. families say they spend at least $10,000 a year on childcare, according to Care.com. And when we consider the average cost of that care -- $565 a week for a nanny and $215 a week for a daycare center -- it's easy to see why.
The burden can be especially high for parents of multiple children who aren't yet school-aged. But this year, even parents of school-aged kids may be racking up higher childcare bills than normal. Many schools throughout the country have yet to return to a full-time, five-days-a-week schedule, and a large number continue to operate on a fully remote, or virtual, basis. As such, parents who normally spend a smaller amount of money on after-care programs have had to find room in their budgets for full-time care. It's not shocking, then, that 40% of working parents have had to make adjustments to their employment situation since the pandemic started, according to FlexJobs.
Thankfully, President-elect Joe Biden recognizes the hardship faced by a lot of families with young children. To this end, he's made several proposals to help ease the burden.
Biden is looking out for parents
As part of his recently revealed $1.9 trillion coronavirus relief package, Biden wants to help make childcare more affordable. For one thing, he's calling for an additional $15 billion in funding for the Child Care and Development Block Grant program. This money is allocated to states for childcare subsidies for low-income families with children aged 12 and under. That aid would come on top of the $10 billion in funding the program already received from the recently passed $900 billion stimulus package. December's package also included the $600 checks many people have already seen hit their bank accounts.
Biden is also pushing for an expansion of the Child Tax Credit, which is currently worth up to $2,000 per child under the age of 17. Specifically, Biden seeks to boost that credit to $3,000 per child -- $3,600 for kids under the age of six. And, he's looking to make the Child Tax Credit fully refundable.
Right now, the credit is only partially refundable -- up to $1,400 per child can come back to tax-filers in refund form. This means that if a given tax-filer doesn't owe the IRS money, they'll only get $1,400 per child, not the full $2,000. But Biden wants to make the entire credit refundable to help families more.
Additional childcare assistance
Biden also seeks to expand the Child and Dependent Care Credit. Parents who pay for childcare can claim this credit. By contrast, the Child Tax Credit is for parents of children under 17, regardless of whether they pay for care. Right now, the Child and Dependent Care Credit maxes out at $1,050 per child under the age of 13, or $2,100 for two or more children under 13. Biden's proposal would boost the credit so it's worth up to $4,000 for one child, or $8,000 for two or more children. The credit will also be available, at least partially, to families earning up to $400,000, which speaks to the fact that childcare can be a burden even for higher earners with multiple children. And, it will be refundable.
Of course, Biden will need the support of lawmakers to push his proposal through. But the fact that he's looking out for parents is a good thing, especially given the number of families who are struggling immensely during the pandemic.
Alert: highest cash back card we've seen now has 0% intro APR until 2023
If you're using the wrong credit or debit card, it could be costing you serious money. Our expert loves this top pick, which features a 0% intro APR until 2023, an insane cash back rate of up to 5%, and all somehow for no annual fee.
In fact, this card is so good that our expert even uses it personally. Click here to read our full review for free and apply in just 2 minutes.
About the Author
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.