Washington, D.C. –At a briefing in the Capitol yesterday, three distinguished organizations praised Reps. Michael E. McMahon (D-NY) and Allyson Y. Schwartz (D-PA) for introducing The Support Working Parents Act and their consistent commitment to working families.

The Supporting Working Parents Act would allow all families, regardless of their income, to receive a credit of 35 percent of their child care expenses.  Under current law, taxpayers earning less than $43,000 a year receive a credit that’s equal to 35 percent of their child care expenses. However, for families earning more than $43,000 a year – a figure well below the median national income for two wage earner families – the tax credit phases out to just 20 percent of expenses.

At yesterday’s briefing, representatives from Third Way, American Enterprise Institute and First Focus each discussed the positive impact The Supporting Working Parents Act would have and praised the Representatives for introducing a common-sense piece of legislation that is vital to easing the burdens of working families across the country.

“We have an out-of-date tax code that’s out of touch with modern realities,” said Tess Stovall, Senior Policy Advisor for Third Way’s Economic Program.  “This is a long-overdue expansion of the child care tax credit and an issue of simple reality for today’s parents.  Third Way commends Reps Schwartz and McMahon for working hard to protect middle class families throughout the country.”

“This legislation is not just another middle-class tax cut; it promotes economic growth,” said Alan D. Viard, Resident Scholar at the American Enterprise Institute.  “It is good tax policy to provide tax relief for work-related costs, such as child care.  Numerous statistical studies show that reducing the cost of child care causes more parents to enter the workforce.  This bill, introduced by Reps. Schwartz and McMahon, is a cost-effective and common-sense way to encourage work.  I urge Members of Congress across the ideological spectrum to support this proposal.”

“The First Focus Campaign for Children supports the dedicated efforts of Representatives Schwartz and McMahon to help working families access quality child care.  Their legislation, the Support Working Parents Act of 2010, not only simplifies and improves the child care tax credit, it promotes a federal tax code that acknowledges both the expense and value of parenting,”  said Megan Curran, Senior Director of Family Economics at First Focus.

This one simple change in the tax law proposed by Reps. Schwartz and McMahon would allow middle-class, working families to get a bigger tax break to cover the rising cost of child care.  A single 35 percent tax credit rate for all families not only eliminates disparities in the tax credit, it nearly doubles the maximum allowable credit from $1,200 to $2,100 to help account for the increased cost of child care.

In 39 states, the cost of one year’s worth of infant child care exceeds the cost of one year’s tuition at a four-year public university. In the state of New York, a parent spends between $11,000 and $14,000 per year on child care; in Pennsylvania, the cost is between $8,000 and $10,000. However, the median income in New York is a little more than $70,000 and in Pennsylvania it’s about $50,000, making most families ineligible for the current 35 percent child care tax credit.

Said the Representatives when the bill was introduced:

“Far too many families across the country are faced with the daunting challenge of finding high-quality child care that won’t break the bank.  Expanding the child care tax credit for middle-income families will strengthen our economic recovery by helping parents balance their responsibilities at work and at home. During these tough economic times it is more important than ever that parents have the choice to re-enter the workforce and know that high-quality care is available for their children.” (Rep. Schwartz)

“It makes no sense that families making below the median income but more than $43,000 per year would be ineligible for this credit.  In an area where the cost of living is high, such as New York City where my district is located, working families need all the help they can get. Changing the tax code so that the child care tax credit is available to all families is the right thing to do. The money that these families will get from the tax credit will be put back into our economy, used for their child’s education or simply help them makes ends meet. I am so proud to partner with Rep. Schwartz on this worthwhile initiative and hope all of our colleagues will support it.” (Rep. McMahon)

In addition to Third Way, American Enterprise Institute and First Focus, The Supporting Working Parents Act is supported by numerous organizations devoted to helping today’s families succeed, including Early Care & Education Consortium, Every Child Matters, First Focus Campaign for Children and Voices for America’s Children.

Information on the Organizations at today’s Capitol briefing:

Third Way is the leading moderate think-tank of the progressive movement.  Its aims include an economic agenda that is focused on growth and middle class success; a culture of shared values; a national security approach that is both tough and smart; and a clean energy revolution.  Third Way creates high-impact products for use by elected officials, candidates and the Administration.

The American Enterprise Institute for Public Policy Research is a private, nonpartisan, not-for-profit institution dedicated to research and education on issues of government, politics, economics, and social welfare. Founded in 1943, AEI is home to some of America's most accomplished public policy experts--from economics, law, political science, defense and foreign policy studies, ethics, theology, health care, and other fields.

First Focus is a bipartisan advocacy organization dedicated to making children and families a priority in federal policy and budget decisions. First Focus takes a unique approach to children’s advocacy, engaging both traditional and non-traditional partners in a broad range of efforts to increase federal investments in programs that address the needs of our nation’s children. In all of their work, they seek to raise awareness regarding public policies impacting children and families and to ensure that related programs have the resources necessary to help children grow up in a healthy and nurturing environment. 

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