WASHINGTON—U.S. Senators Maggie Hassan (D-NH) and Joni Ernst (R-IA) are leading a bipartisan, bicameral effort to increase access to child care for working families in New Hampshire, Iowa, and across the country.
The Improving Child Care For Working Families Act builds on the American Rescue Plan by permanently increasing the amount of tax-free dollars working parents and their employers can set aside in a dependent care assistance plan (DCAP) to use toward child care expenses. While the American Rescue Plan increases the DCAP limit to $10,500, the change is only in effect for the year 2021. This bill offers lasting relief by making the change permanent.
“I’ve long heard from parents across New Hampshire about challenges that they face affording child care, and the COVID-19 pandemic has only underscored the need to take action on this pressing issue,” said Senator Hassan. “I am glad to partner with my colleagues in the House and Senate on this bipartisan bill that could make a difference for hard-working families’ bottom lines.”
“We know that child care has long been an issue in states like Iowa, and across the country, which is why, even before this pandemic, I’ve worked across the aisle to address this crisis. This bipartisan bill is a commonsense solution that will benefit both our working moms and dads and small businesses—and has the support of many state and national organizations. I’m proud to join my colleagues in the House and Senate to put forward this proposal that will allow our working families and small businesses to use more of their hard-earned dollars, tax-free, to get their kiddos the best quality care possible,” said Senator Ernst.
"Now more than ever, it is important to support our nation’s working families. Employers can support their employees’ child and dependent care needs by offering dependent care assistance plans, often in the form of flexible spending accounts. Unfortunately, for most families, the average cost of child care each year is much greater than the contribution limits under the program. The Bipartisan Policy Center thanks Senators Ernst (R-IA) and Hassan (D-NH) and Representatives Axne (D-IA) and Fitzpatrick (R-PA) for their work to increase the contribution limits for these plans, which will help more parents afford child care and ensure employers can better support their employees with caregiving needs. We are pleased to see the introduction of this bicameral, bipartisan legislation, and look forward to engaging on this important issue," said Linda Smith, Director, Bipartisan Policy Center’s Early Childhood Initiative.
In addition to Senators Hassan and Ernst, Senators Kyrsten Sinema (D-AZ) and Thom Tillis (R-NC), and Representatives Cindy Axne (R-IA) and Brian Fitzpatrick (R-PA) joined in introducing this legislation.
Throughout the pandemic, Senator Hassan has worked to support children and families. The American Rescue Plan, which Senator Hassan helped pass into law, increases the child tax credit to $3,000 (or $3,600 for children under the age of 6). Earlier this year, Senator Hassan also joined Senator Shaheen in announcing $19 million in child care funding for New Hampshire through the December COVID-19 relief package that they helped negotiate and pass into law.