When Rep. Salud Carbajal, D-Calif., sat down with constituents post-pandemic, they sent him back to Washington with an edict: we need more affordable and available child care.
“This was their number one priority that they brought to my attention,” said Carbajal on a recent afternoon in his Washington, D.C. office. “I came back, scoured the legislative arena to find out what type of legislation I might be able to move forward to make an impact, to help businesses and help families who are struggling with child care costs. And we realized that there was already an existing framework, tax credit framework in the tax code. But the reason it wasn’t being utilized more is because it was outdated.”
His bill, the Child Care Availability and Affordability Act, would revamp the current employer-provided child care tax credit to encourage more businesses to provide child care for employees. It would increase the maximum credit available to large companies, currently just $150,000, to $500,000 a year and give a $600,000 tax credit incentive to smaller businesses. It would also provide incentives for multiple businesses to join together to create a child care option.
The cost of child care can be a burden on families. The Department of Labor estimates that daycare for one child cost as much as $15,600 a year in 2022, with U.S. families spending between 8.9% and 16.0% of their median income on full-day care.
“We don’t have enough child care facilities. We don’t have enough child care slots for communities and people to put their children in, and that raises the price. It’s a supply and demand issue,” he said.
Carbajal’s district is home to Patagonia’s main campus in Ventura, Calif. The company already offers on-site child care at the campus as well as its distribution center in Reno, Nev. Carbajal toured the Ventura child care center, which served as further inspiration to get this bill across the finish line.
“They said it’s one of the biggest benefits they can actually…come spend their break with their baby. And just like, hey, how are you doing? It’s like, what a treat! They could come have lunch with their child,” he said, getting animated recalling his visit. “Not only is it convenient, not only is it affordable, but it allows them to spend that much more quality time with their children.”
But Carbajal knows that not every business has the capabilities to offer such a perk — which is why he calls this tax credit “vitally important to incentivize other businesses to do what Patagonia has already done on their own, above and beyond the current existing tax credit.”
The legislation also has bipartisan support this time around — but in both chambers of Congress. Rep. Mike Lawler, R-N.Y. is co-leading the bill in the House and Senators Katie Britt, R-Ala., and Tim Kaine, D-Va., in the upper chamber.
Republicans, who control both the House and the Senate, are currently working on writing a tax package that could potentially include Carbajal’s bill. But while Carbajal is hopeful, his bill will get a vote this Congress, he says he won’t support a tax package that hurts his constituents — even if it means voting against his own legislation.
“I have to consider the totality of the legislation, of how it’s going to impact everyday working middle-class families. That, for me, is the ultimate litmus test,” said Carbajal. “That will demonstrate how I vote.”
“I’m hopeful that this bill will make it in as one positive light in an overall bill. But unless it’s a balanced bill, it’s going to be a challenging piece of legislation.”
