Beyond The Horse Race: The Trump Childcare Policy
A look into one of Trump’s few concrete policy proposals
By Aaron Lindstrom
The Progressive Teen Staff Writer
THE MOST UNFORTUNATE THING ABOUT ELECTION CYCLES is their tendency to create a focus just upon the horse race and not on the issues that confront us as a country. Throughout all of the leaked emails, released tapes, bouts of illness and outrageous comments, you might not have heard that even Donald Trump has tried to talk about policy. So you may have missed this particular bit of news. On September 13, 2016, Trump released a policy towards childcare that was largely laid out and engineered by his oldest daughter, Ivanka Trump. This was in itself a unique event in this year’s election campaign; the crisis of childcare has gotten so bad that both candidates concede that reform is necessary so that mothers across the workforce can continue to provide for their children. Let’s take a look at the specifics of the Trump plan. If you are interested in the Clinton campaign’s childcare plan, you can view that here.
The Facts
According to the Department of Labor, the percentage of mothers in the workforce with children under the age of 18 has increased by almost 23% in the last 40 years, from only 47.4% of mothers in the workforce in 1975 to 70.3% of mothers in the workforce today.
The same source reveals that there is a huge income disparity between those two groups: the average income for married mothers who are the primary breadwinner is approximately $80,000 a year, well above the GDP per capita of $57,100 (families where the father is the primary breadwinner, by contrast, have that father making about $2,000 less, and when both spouses have income they make $10,000 less). On the other hand, single mothers have a median income of $23,000, around a quarter of the income of married mothers who are the sole breadwinner.
Even Donald Trump, who earned the Politifact “Liar of the Year” award in 2015, can find facts and evidence to support the conclusion that we need a better childcare system. So what specific proposals does he have in mind?
First Proposal: Changing the Tax Code
TRUMP’S FIRST PROPOSAL WOULD REFORM THE TAX CODE in order to make the cost of childcare tax-deductible. It would allow individuals making less than $250,000 a year ($500,000 a year) to deduct the cost of childcare from their income taxes for up to four children ages 13 or younger, or elderly dependents, and up to the average cost of childcare in their state. Trump would also allow family’s low-income families to receive a spending rebate through the Earned Income Tax Credit. The Trump plan makes it clear that this would not be restricted based upon the type of care; nursery school, after school care, and enrichment activities would all receive this deduction and would not exempt families that use stay-at-home parents, or if they choose instead to use paid professionals, promoting what Trump describes as “freedom of choice.” This could reduce the tax burden on families, especially low-income single moms by thousands of dollars a year.
Second Proposal: Childcare Savings Accounts
THE SECOND MAJOR PROPOSAL FROM TRUMP’S PLAN is the creation of “Dependent Care Savings Accounts.” (DCSAs). This would allow anyone with an unborn child, existing child or elderly dependent to establish one of these accounts, of which all contributions and savings deposited into this account would be tax-deductible. An individual cannot deposit more than $2,000 a year into this account, however the money in that account would roll over from year-to-year. Also, the first $1,000 deposited into his account per year would be half-matched from the government, which allows up to $500 a year extra for childcare and elderly care expenses.
These accounts could be used for enrolling kids in the school of your choice, as well as “other enrichment activities”. If money still exists in the account when the child in question reaches the age of 18, that money could be used to help fund higher education. Money from this account could also be used in the case of an elderly dependent; services such as adult daycare would be allowed to be covered by these accounts.
The main purpose of these accounts, though, is to handle emergency expenses. As Trump points out, 47% of Americans cannot meet an unexpected expense of $400 without resorting to borrowing or selling personal property. These accounts would strive to allow families to account for these emergency expenses.
Third Proposal: Regulation Reform
THIS PROPOSAL TAKES ONE KEY FORM that is much more along the lines of a traditional Republican talking point: reducing regulation with the hope of the free market developing solutions. According to Trump, “Current federal efforts to reduce childcare costs, such as the pre-tax flexible spending accounts available to many workers, are biased toward center-based care… informal networks of friends and relatives are an important source of childcare that is convenient and trusted. These flexible arrangements can also help meet the need for care during nontraditional hours.”
Research into the topic reveals an interesting revelation: there are no federal regulations regarding childcare. Instead, every single state has its own department for regulating and certifying childcare providers. This leads to many wildly different statuses when it comes to childcare regulations. The Administration for Children and Families (ACF) even has a list of what states have met various federal standards. You can see what about your state’s existing childcare plan will change based upon Trump’s desire to emphasize choice, especially regarding unorthodox hours.
Fourth Proposal: Employee Incentives to provide Childcare
According to the National Employee Survey of 2014 from the Families and Work Institute, only 7% of employers provide access to childcare at or near the work site. Along the lines of this logic, Trump proposes extending the tax-deductible proposal for individuals to corporations as well. He also proposes an upgrade of the tax credit outlined in H.R. 1836 from 2001.
This tax credit in question was introduced in H.R. 1836 in 2001, one of the sets of the Bush Tax Cuts. To quote directly from the Trump plan, “That law gave companies that provide appropriately-licensed on-site childcare centers a tax credit of up to 25% of facility expenditures, plus 10 percent of resource and referral costs, up to a limit of $150,000 per calendar year; a portion of the credit is recaptured if the center is kept in service for less than 10 tax years. The Trump plan would increase the cap, shorten the recapture period, and devise ways for companies to pool resources in order to make the credit more attractive.”
Fifth Proposal: Maternity Leave
THE TRUMP PLAN CONCLUDES with tackling the one issue that is almost universally brought up when discussing childcare. Indeed, the Trump plan calls for six weeks of paid maternity leave for new mothers. So first a quick summary of our current situation: our current leave plan is based upon H.R. 1 under the Clinton administration, the first law passed by Bill Clinton. The full text of the bill can be read here.
The current policy is effectively as follows: you only receive the leave if you have been at the company for at least twelve months and have worked at least 1,250 hours. Additionally, the company must have more than 50 employees. It also maximizes the amount of leave to twelve months and most significantly, it is unpaid.
This law excludes many people in certain professions — contractors and part-time employees, for example, if you are employed at a small business. It even provides an option for employers to reject your leave if you are a “highly compensated employee” who lives within 75 miles of the work site.
According to the Bureau of Labor Statistics, only 11% of workers in 2012 had access to paid family leave. Trump proposes to change this by providing up to six weeks of paid maternity leave. Presumably, though the plan does not specify, the mother could take another 6 weeks of unpaid leave.
The Shortfalls
While there are many benefits of this plan, not everything is sunshine and roses. First of all, due to the nature of how income tax deductions work, the wealthy would get a much larger tax break than the poor. As the Guardian points out, “Under Trump’s plan, wealthy families making $500,000 would get a child care tax break of about $40 for every $100 they pay for child care. Meanwhile, families making $60,000 would only get $15 for every $100 spent on child care.”
This plan also only provides maternity leave to new mothers. It does not provide paternity leave whatsoever to new fathers, meaning that while this plan claims to promote “freedom of choice” when it comes to childbirth, it still limits the mother as being the only viable caregiver for the first few months of the new child’s life, regardless of what the family’s situation might be.
The other problem that the Trump plan faces is that it simply does not address the root of the problem. If you are paying $18,000 a year for childcare costs and cannot afford $18,000, then a tax deduction is not going to be particularly helpful. This plan does very little to assist with the actual cost of childcare and instead focuses on assisting families that already can afford the upfront, but might have a difficult tax burden because of it.
In Conclusion
In summary, the Trump plan would would seek to do the following:
- Rewrite the tax code to make childcare tax-deductible
- Create government-subsidized accounts to pay for emergency childcare expenses
- Reform regulation to promote new solutions
- Provide employer incentives towards providing on-site childcare
- Allow six weeks of paid maternity leave
Despite its shortfalls, however, this plan would be a step forward to help some of the problems facing women in this country. Regardless of what you think of Trump, this plan will hopefully help to drive the conversation forward and benefit both sides, as long as we can look beyond the horse race and focus upon the issues facing us a country.
