Executive Session
Floor Speech
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Mrs. SHAHEEN. Madam President, I come to the floor this afternoon to discuss legislation that I introduced this week with our colleagues, Barbara Boxer, Patty Murray and Kirsten Gillibrand. Our legislation responds to the rising cost of childcare in the United States and the impact it is having on millions of working families.
Our bill, called the Helping Working Families Afford Child Care Act, would help these working parents. It would help them afford childcare so they can go to work and support their families. What it does is update the child and dependent care tax credit that was passed in 1976 and has only been updated once since that time.
Access to affordable childcare is a necessity for working parents. I raised three daughters and I have seven grandchildren, so I appreciate just how important it is for working parents to know their children are being supervised by quality caregivers.
Sadly, I struggled with childcare from the time my first child was born in 1974 until the year my last child finally went off to college in 2004. Unfortunately, I am watching my daughters deal with that same struggle of how to find quality childcare for their kids.
A working parent can be productive in the workforce only when they know their children are safe. That is why the rising cost of childcare is a real burden for millions of families--especially for working mothers. Childcare costs are taking up an increasingly larger share of a typical family's take-home pay.
I visited a great NAEYC accredited childcare center in Nashua, NH, earlier this week, and I saw their infant room--where they care for infants. The average cost for full-time care for an infant in New Hampshire in a childcare center was almost $12,000 in 2012, the last year for which we have data. It costs $12,000. For a family trying to make ends meet, this is a huge cost.
In fact, in the Northeast the cost of full-time, center-based care for children now represents the highest single expense for a typical household. It costs more than housing, more than college tuition, more than transportation, food, utilities or health care.
Unfortunately, as the cost of childcare has grown, one critical tax credit that helps defray childcare costs has failed to keep pace. The child and dependent care tax credit was first enacted in 1976 with strong bipartisan. It was supported by both Democrats and Republicans. This credit provides a tax credit to working parents for a portion of their childcare expenses. However, the limits on the credit are not indexed to inflation, and so their value has actually decreased over time. In fact, the limits have been increased just once in the past 25 years. The tax credit simply is not keeping pace with the growing cost of childcare.
The Helping Working Families Afford Child Care Act would update and improve this tax credit so it responds to the increasing burden of childcare costs. First, the bill would increase the amount of childcare expenses that are eligible for the credit. Right now families can only claim expenses up to $3,000 for one child and $6,000 for two or more children. That just doesn't make sense in New Hampshire or anywhere else in the country. In New Hampshire the average cost of childcare can exceed $12,000 for a single child.
This bill increases the tax credit starting in 2015 and indexes the cost to inflation so they will continue to keep pace with rising childcare costs. The bill also makes the tax credit fully refundable and phases out the credit for families making over $200,000 a year. It better targets how the money is spent.
Right now the tax credit is poorly targeted. It provides zero benefit for too many families who need it the most. By making the credit refundable, the bill better targets the tax credit to families who are most in need of childcare assistance.
I have been working on early childcare and education for most of my public career, especially during my years as Governor of New Hampshire. One of the lessons I have learned is that providing access to early and affordable childcare and education is not just about helping families make ends meet--although that is an important piece of it--it is also a short-term and long-term issue for our businesses and our economy.
As Governor I worked with the New Hampshire business community and established the Governor's Business
Commission on Child Care and Early Childhood Education to engage business leaders in addressing the State's childcare and early education needs. We did a study that looked at the impact of the shortage of quality childcare in New Hampshire back in the 1990s. We found that businesses were losing up to $24 million a year as a result of childcare-related absenteeism, and nearly one in four employees was forced to change jobs or switch to part time as a result of their inability to find satisfactory childcare.
We have many national studies that show that quality, dependable childcare for employees is vital to a company's productivity. In fact, researchers estimate that childcare breakdowns leading to employee absences cost businesses $3 billion a year because parents are concerned about where their kids are.
In addition, a majority of companies report that employee absenteeism is reduced when quality childcare services are offered. Employee turnover is also reduced, and we know how important employee retention is to a business's bottom line.
The long-term benefits to our workforce are also clear. Research shows that quality childcare and early childhood development are critical to preparing our children for tomorrow's jobs. We know that the first 5 years are the most critical in the development of a child's brain. During these years children develop their cognitive, social, emotional, and language skills that form a solid foundation for their lives.
Research shows that children who received quality childcare do much better in school; they are less likely to drop out; they are more likely to read at grade level; they are less likely to repeat grades; they are less likely to need special education; and they are less likely to get into trouble. The experiences children have in their first few years will affect them, their families, and our society for the rest of their lives. I think it makes more sense for us to invest in early childhood care and education because we can either spend the money then or we can spend a whole lot more money later. When kids don't get a good start in life, they wind up getting into trouble and can end up in prison.
I used to talk about the cost of early care and education being about $1 for $7 that gets spent at the other end if we don't pay for these costs. It is a whole lot cheaper to pay for childcare than it is to pay for prison. That is why we have to respond to the rising cost of childcare. We have to ensure that working families can afford quality childcare.
The legislation we introduced this week will help working families in the short term, and it will especially help working mothers as they go to work. It will support the early development of our children, which is so critical to our future, our economy, and our workforce.
I am hopeful we can get a lot of sponsors for this legislation and get bipartisan support just as the credit had when it passed in 1976 so we can provide the help that working families need.
I thank the Presiding Officer, and I yield the floor.
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