Donald Trump unveiled his economic vision in a Detroit speech Monday, tackling jobs, wages and … child care. The Republican presidential nominee drifted from his party’s familiar territory and proposed a way to make the service more affordable for struggling American families. Trump’s idea: Allow working parents to “fully deduct” the expenses from their taxes.
Now both Trump and Clinton have announced ambitious plans for the future of American child care, and they share two characteristics: Both are ambiguous, and neither candidate has outlined how they'd pay for it all.
The biggest difference between the plans is perhaps who they would serve. Trump is targeting working families. Hillary Clinton's includes relief for the out-of-work poor.
By offering child-care relief as income-tax deduction, Trump's move would likely save middle- and upper-class households money. (Some of that burden, of course, is already deductible: Working parents can deduct a portion of their child-care expenses up to $6,000 from their federal income taxes.) But some economists say Trump's plan leaves out the working class and unemployed:
By implementing his proposed childcare subsidy as a tax deduction rather than a tax credit, Trump effectively excludes all poor families.
— Justin Wolfers (@JustinWolfers) August 8, 2016
Clinton revealed her child-care plan about three months ago, proposing to cap the expense at 10 percent of a household’s income. She intends to reach that lofty goal with tax credits and subsidized child care, both of which would require an enormous public investment. Subsidized care is already available to kids across the country, but advocates say waiting lists can delay the service for months.
She also proposed boosting pay for child-care workers, a strategy she thinks will help improve the quality of care by reducing employee turnover, and expanding a “home visiting” program geared toward lifting low-income children.
The candidates' child-care plans come as the cost of child care nationwide soars, pushing presidential contenders on both sides of the ideological aisle to address it.
The average annual cost of day care now surpasses the price of in-state college tuition in 31 states. It eats up at least 30 percent of a minimum-wage worker’s income in every state, according to a report last year from the Economic Policy Institute, a Washington think tank.
In Washington, D.C., for example, the average yearly cost of day care is roughly $22,000.
Clinton’s plan isn't surprising. Democrats have long spoken out about expanding access to quality child care. Before Monday, though, Trump hadn’t talked about a specific child-care policy on the campaign trail. At a town-hall event in Iowa in November, he offered a solution that doesn't require government investment: company in-house child care.
"It's not expensive for a company to do it," he said, according to news reports. "You need one person or two people, and you need some blocks and you need some swings and some toys. You know, surely, it's not expensive. It's not an expensive thing. I do it all over, and I get great people because of it. ... It's something that can be done, I think, very easily by a company."
His eldest daughter, however, announced her father’s commitment to helping the nation’s working mothers at the Republican National Convention in July. Aides say Ivanka Trump is advising him on family-friendly policies.
“I'm a huge advocate for women and women's issues, like child care,” she told Harper’s Bazaar in a new profile, out Monday. “The cost of child care is incredibly onerous. In half the country, the cost of child care exceeds the cost of housing. It's the largest expense for households. It's not sustainable or appropriate."
More on Wonkblog: