Bush Seeks Child Care Aid for 2 1/2 Million Poor Parents : Tax Credit of $1,000 Proposed

President Bush, in his first major legislative proposal, today asked Congress to approve a $1,000 child care tax credit for 2.5 million low-income families with children under age 4.

The White House said the program would cost $2.5 billion a year by the time it is fully implemented in the 1993 fiscal year. Estimated costs during the 1990 fiscal year that begins Oct. 1 were put at $187 million.

During the first year, a tax credit would be available to families with incomes of up to $13,000. Families earning up to $8,000 would be eligible for a credit equal to 14% of income up to a maximum of $1,000. The size of the credit would be reduced for families with incomes in the $8,000-to-$13,000 range.

The credit would be refundable so that a family with little or no tax liability would receive assistance. For example, a family with an income of $5,000 that owed no federal taxes would receive a government check for 14% of its income or $700 under the plan.

By the 1994 calendar year, families with annual incomes of up to $20,000 would be eligible for some tax credits. At that time, the White House estimated that 3.5 million families would be covered by the program.

‘One of Key Issues’

Bush, in a written statement, described child care as “one of the key issues facing the nation.”

He said his proposal, which represented fulfillment of a promise made during last year’s presidential campaign, would increase the range of child care options available.

Congress is considering a variety of child care proposals, including a plan endorsed by unsuccessful Democratic presidential candidate Michael S. Dukakis that would provide money directly to government-certified day-care centers.

But Bush said that approach discriminates against parents who arrange for family members, friends or neighbors to care for their children. Church-based day care centers also might be ineligible for government funding under the Democratic plan because of constitutional limits on government assistance to religious organizations.

“Parents are best able to make decisions about their children and should have the discretion to do so,” Bush said in his statement. “Assistance should go directly to parents. They, not the government, should choose the child care they consider best for their children.”

“The federal government should not become involved in licensing decisions, and federal financial support should not be made contingent upon state licensing decisions,” Bush said.

“Our plan will benefit all low-income working families with children, not just those who participate in government-sponsored child care,” he added.

White House spokesman Marlin Fitzwater conceded that there was no guarantee that the assistance, which would be refundable in order to be available to families without tax liabilities, would actually be used for child care.

But he said it would be helpful to low-income families in any event.

“Every little bit helps. Poor people need this money. They can use it to good effect.” Fitzwater said. “There aren’t many people under $8,000 who are not in serious need.”