FOR IMMEDIATE RELEASE                                              

Monday, January 25, 2010

CONTACT: Cullen Schwarz

Office: (202) 225-5802

OBAMA SUPPORTS CHILD CARE RELIEF, AS REP. PETERS’ FIRST BILL WOULD PROVIDE

Previewing State of the Union Address, President Calls for Expanding Child Care Tax Credit, Just as Peters’ H.R. 1500 Would

Washington, D.C. – At a meeting of the president’s Middle Class Tax Force today, President Barack Obama and Vice President Joe Biden announced Administration support for expanding the Dependent Care Tax Credit (DCTC) from 20 to 35 percent of qualifying child and dependent care costs, just as the first bill Congressman Gary Peters introduced as a Member of Congress would do.  The president said he will discuss the initiative in the first State of the Union speech of his presidency Wednesday night.   

Congressman Peters introduced the Helping Families Afford to Work Act (H.R. 1500) last March and subsequently held a roundtable meeting with local families to discuss the tremendous burden of rising child care costs.  The United Way has endorsed Congressman Peters’ bill, as has the Detroit Free Press.  Click here to view Free Press editorial and other previous news coverage.

“Rising child care costs are now one of the greatest burdens on middle class families, especially in this economy,” said Rep. Peters.  “The average price of full-time center care in America increased at almost twice the rate of inflation in recent years, and other than food and shelter, preschool and child care are now the costliest household expenditure for many families.  We need to work together to create jobs, but we also need to act to help middle class parents afford to work if they do have jobs.  I am hopeful that the president’s support for this proposal will help provide the momentum necessary to come together in a bipartisan way to help alleviate this growing problem.”

The cost of child care has risen so much that daycare can now be higher than the cost of attending a public university. In Michigan, the average family spends between $7,000 and $9,300 a year on child care, while the average cost of tuition at a Michigan public university is $8,754. The average cost of child care varies by state, but ranges from $4,560 to as high as $15,895 annually for full-time center care for an infant.  In Michigan, the average family spends $6,300 and $9,300 a year on child care.

Peters’ bill would go even further than the president’s proposal, not only increasing the percentage of child care expenses eligible for the credit but also double the maximum expenses that may be claimed for one child from $3,000 to $6,000, recognizing the decreased value of the DCTC due to inflation and soaring child care costs.  The original Dependent Care Tax Credit was signed into law by President Reagan in 1981; since then, inflation has made the maximum tax credit worth much less to families.  Currently the DCTC provides, at most, a credit of $1,200 for a family making $43,000 or more with two children.  Under President Obama’s proposal, the maximum credit for a family with two children making up to $80,000 a year would increase to $2,100.  Under Peters’ Helping Families Afford to Work Act, families would receive up to a $4,200 credit, a substantial help to families paying thousands of dollars a year for child care.

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