New Bill in Congress Seeks to Provide the Childcare Industry More COVID-19 Relief

A new act aimed at helping both families obtain childcare and childcare providers stay solvent has been introduced to congress. Developed by Rep. Nita M. Lowey (D-NY), who represents New York’s 17 District and is chairwoman of the House Appropriations Committee and Rep. Richard E. Neal (D-MA), who represents Massachusetts’ 1st District and is chairman of the House Ways and Means Committee, the Child Care for Economic Recovery Act aims to stabilize the child care industry through the Child Care is Essential Act while improving the health and safety of child care facilities for children and families.

Childcare providers have been struggling to stay in business, with many states shutting down childcare to all but essential workers during the COVID-19 outbreak. Other providers have closed voluntarily during the pandemic, with many shutting down permanently and others questioning if they’ll be able to reopen or stay in business once they do.

The Child Care is Essential Act was introduced in early June by Sen. Patty Murray (D-WA) in early June. The bill, which has not yet been voted on, establishes and provides $50 billion in appropriations for the Child Care Stabilization Fund so childcare providers can apply for and receive grants during and after the COVID-19 pandemic.

The Child Care For Economic Recovery Act builds on the Child Care is Essential Act by providing additional funding in fiscal year 2020 for social services block grants, infrastructure grants and needs assessments, and taxpayer services, with the focus on improving child care safety while COVID-19 remains a public health emergency.

Specifically, the bill adds and modifies certain tax provisions to:

• “increase and make refundable the child and dependent care tax credit;
• increase the exclusion from employee income for employer-provided dependent care assistance;
• allow employers payroll tax credits for certain fixed expenses of child care facilities closed due to COVID-19 (i.e., corovirus disease 2019), certain employer-paid employee depended care expenses, and the employment of workers who perform domestic services in the private home of an employer; and
• allow a carryover of unused benefits or contributions remaining in a dependent care flexible spending arrangement from the 2020 plan year to the 2021 plan year."

In an op ed written for CNN, Rep. Lowey says, “To ease the untenable bind facing Americans families, our legislation would more than triple guaranteed federal child care funding from $2.9 billion a year to $10 billion a year for the next five years, with state match requirements for the increase temporarily suspended to help employers and workers with certainty and stability during the economic recovery.”

“This funding would both support work and reduce disparities in child care accessibility and the education opportunity gap, and the multiyear funding would provide employers and workers with certainty and stability during the economic recovery.”

“Our bill also includes a landmark $10 billion for grants to states to help assess long-term structural challenges child care facilities face, and make essential adaptations, reconfigurations, and expansions in response to coronavirus,” she writes.

This bill joins other child care bills that have been introduced during the COVID-19 epidemic. In April, Sen. Elizabeth Warren (D-MA) and Sen. Tina Smith (D-MN) introduced a $50 billion child care bail out to save the industry from the impact of COVID-19. Sen. Kelly Loeffler (R-GA) introduced a resolution calling for the payments to States for the Child Care and Development Block Grant program to be sufficient to cover losses experienced by child care providers due to the COVID-19 pandemic, and Sen. Patty Murray (D-WA) introduced a bill to support education and child care during the COVID-19 public health emergency, and for other purposes.

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