Biden’s plan would cap costs at 7% for thousands of families
Julie Groce knew raising a child would increase her expenses, but it’s different from what she was prepared for.
“I thought nappies were going to cost more than childcare. Like I thought that was going to be the stressor. It’s not, it wasn’t the stressor. It’s child care,” Groce said.
Groce and her husband pay about $1,100 a month for childcare, which is actually a little less than the average cost in the United States.
“For many states, the monthly cost of care exceeds a family’s average mortgage payment, and the annual cost is higher than state tuition for many families in many states,” Stephanie Schmidt said.
Schimdt works for the Center for Law and Poverty which has advocated for a significant increase in government funding to support child care. A cause that the president defended during the speech on the state of the Union.
The president’s plan would cap child care costs at 7% of a household’s income if they’re up to 2.5 times the state’s median income and households earning 75% or less of the median income would pay nothing.
For example, look at Ohio where the median household income is close to 56,000. So a family in Ohio earning $70,000 per year would have their child care costs capped at $4,900 per year. That’s 7% of their annual income. Families earning $42,000 or less would pay nothing, in this example.
“What that would mean for families is just that there would be so many more options and so many more opportunities for them. There would be so much less stress for them, and child care being affordable and accessible would mean they would have more money in their pockets, which would provide them with greater economic stability,” Schmidt said.
“We made the difficult decision to sell our house and moved in with the in-laws. I was trying to get daycare so I could get back to work and contribute to the family home, but I didn’t realize the waiting lists were so long here,” said San Francisco mother of two Lily Marquez. .
Marquez says she and her partner looked for daycare after the birth of their second child, but saw prices around $3,000/month. So Lily left the workforce to stay home with the kids and they sold their house to move in with her in-laws.
When she was able to enroll in a public program, they had been on the waiting list for over three years.
The cost cap plan is part of the Build Back Better bill, which passed the House but stalled in the Senate. The hope is that the renewed attention might get it through or it might pass as a standalone bill.