Clinton Unveils Tax-Credit Plan for Child Care

Unveiling what he touted as the “single largest national commitment to child care” in U.S. history, President Clinton on Wednesday called on Congress to approve $21.7 billion in tax breaks and federal subsidies to reduce the financial burden on working parents.

Under Clinton’s plan, which also aims to improve the quality of child care, states would get an extra $7.5 billion over five years to increase child-care subsidies they provide to eligible parents. As a result, the number of children eligible for such assistance would double to more than 2 million.

The existing federal child-care tax credit would be increased by $5.2 billion over five years.

Businesses that provide child-care help would get a tax break, and the government would provide $800 million to expand after-school care programs for 500,000 children, particularly so-called latch-key kids who come home to empty houses in the afternoon.

“We know that the government cannot raise or love a child,” Clinton said at a White House ceremony packed with child-care advocates. “What the government is supposed to do is to help to create the conditions--and give people the tools--that will enable them to raise and love their children while successfully participating in the American workplace.”

GOP reaction to Clinton’s proposal was notably measured, reflecting the reality that many voters support measures to increase child-care options.

Indeed, the GOP clearly wants to guard against ceding the child-care issue to Democrats. On Tuesday, for example, California Gov. Pete Wilson, a Republican, proposed a broad expansion of state programs for preschoolers, including $665 million more for child care, subsidies to help needy children attend preschool programs and expanded care for infants and toddlers. Overall, Wilson would more than double child-care spending in California to about $1.8 billion.

Clinton’s plan, which will be a key feature of the 1999 budget he submits to Congress next month, is the latest in a series of White House initiatives on the domestic policy front. On Tuesday, he proposed expanding Medicare coverage for a new assortment of older workers and retirees.

About a third of the new child-care costs would be covered by money from a proposed settlement designed to protect tobacco companies from future health-related lawsuits--an accord that has yet to make its way through Congress.

Some congressional Republicans were quick to point that out on Wednesday.

“I am pleased the president has added his voice to the call for improving the availability, affordability and quality of child care,” said Sen. James M. Jeffords (R-Vt.), chairman of the Senate Labor and Human Resources Committee. But he urged caution in “spending tomorrow’s ‘tobacco dividend,’ no matter how worthy the cause.”

He added: “Money that may come from a tobacco settlement should be used to address tobacco-related problems.”

Clinton’s proposal expands a block grant to the states that currently provides the main federal aid for child-care programs.

Additionally, his plan enables families with annual incomes under $60,000 to qualify for increased federal child-care tax credits, which would average $358 annually.

Clinton said the expanded tax credit would mean that a family of four making $35,000 a year “and saddled with high child-care bills will no longer pay one penny in federal income taxes.”

A tax credit also would be given to firms that provide child-care services, either by operating facilities on site or reserving slots in existing facilities. The 25% tax credit on qualified costs could not exceed $150,000 a year. Clinton’s budget would allot $500 million over five years for such credits.

The proposed tax break for employers was similar to a plan by Sen. Herbert Kohl (D-Wis.) that passed the Senate last year but failed to win sufficient support in the House.

“I applaud the president’s decision to focus on a program that lets private businesses take actions that will increase the supply of quality child care,” Kohl said.

The Clinton initiative would add $3.8 billion during the five-year period to the Head Start program and double to 80,000 the number of infants and toddlers under age 3 eligible for services under Early Head Start. The increase would move Clinton toward his goal of serving 1 million children in Head Start by 2002.

And the plan would establish a scholarship fund to provide $250 million for additional training of up to 50,000 child-care providers. The workers, who would get $1,500 each, would have to remain in the field at least a year.

Sharing the podium with Clinton at Wednesday’s White House ceremony was First Lady Hillary Rodham Clinton, a longtime children’s advocate.

“I thank my wife who has been talking to me about all these things for more than 25 years now and is sitting there thinking that I finally got around to doing what she has been telling me to do,” Clinton said to laughter. “I was thinking it would be nice to have something new to talk about for the next 25 years. That’s one of the major reasons for this event today.”