There are many costs to consider when starting a family, and the price for child care may be chief among them.
Families often spend as much as 25% of their income on childcare, according to Simon Workman, director of early childhood policy at the Center for American Progress. Such a large cost can have a rippling effect, from a parent needing to drop out of the workforce to couples putting off having more children.
“Child care and paying child care tuition is a family’s second-biggest expense … after rent and the mortgage, sometimes even exceeding” those costs, Workman says.
Sen. Elizabeth Warren of Massachusetts and Pete Buttigieg, former mayor of South Bend, Indiana, each propose that no family spend more than 7% of its earnings on learning costs for their young children.
“This means an average savings of over $10,000 per child per year for those families making below median income, and significantly reduced costs for all families.” according to Buttigieg’s campaign site.
Under Warren’s proposal for universal child care, a family of four, earning $80,000 a year, and paying $9,000 in annual child care costs for their 1- and 3-year-old could save roughly $7,400 per year.
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Warren would also invest federal funds so that families earning incomes that are less than 200% of the federal poverty line would pay nothing for early child care.
Such savings would be meaningful.
“When you think of what families are paying right now … the number is often about 25% of their income, so reducing that to 7% would be a huge benefit to families,’’ Workman says.
Sen. Amy Klobuchar of Minnesota would have a similar 7% cap on spending for child care, but specifically for families who earn up to 150% of their state’s median income.
She would also bolster early childhood Head Start programs with grants, and partner with states to make sure young children from low and moderate-income families can attend pre-school.
Former New York City Mayor Mike Bloomberg would also increase the number of children receiving care through Early Head Start, which focuses on lower-income households.
He would increase the number of families eligible to receive grants to pay for child care and enable more lower and middle-income parents to deduct such expenses on their taxes.
Trump aims $1 billion in funding toward child care
The latest budget proposed by President Donald Trump asks for $1 billion to boost the supply of child care available to families.
Ivanka Trump, an adviser to her father, has made affordable child care a signature issue. In 2017, she pushed for the new tax law to double the child tax credit from $1,000 to $2,000, and to make a larger number of parents eligible to get a refund.
The administration also asked Congress at the time to increase funding to the states for child care block grants by 40%.
Follow Charisse Jones on Twitter @charissejones