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Clinton's Child Care Proposal Draws GOP Supporters And Critics

By Sue Kirchhoff, CQ Staff Writer

President Clinton's Jan. 7 announcement of a $21.7 billion child care package kicked off what is expected to be a spirited debate in Congress about how far to expand federal aid to working families -- not whether to do so.

Republicans and Democrats differ in their approaches, but both parties are developing child care initiatives that would likely appeal to female and suburban voters in the 1998 congressional elections.

Clinton's initiative, to be included in his fiscal 1999 budget proposal, would increase funding to the states by $7.5 billion over five years, boost the child and dependent care tax credit for families making less than $60,000 annually, create a tax credit for businesses that provide day care facilities and allocate 500,000 new after-school care slots.

Unveiling the proposal at a White House ceremony, the president called it "the single largest national commitment to child care in the history of the United States."

In the Senate, a cross-aisle coalition led by Christopher J. Dodd, D-Conn., has been working on child care legislation that would also mix tax breaks and direct subsidies. The group, which includes Judiciary Committee Chairman Orrin G. Hatch, R-Utah, hopes to complete work by Clinton's State of the Union address later this month.

In the House, Speaker Newt Gingrich, R-Ga., in December asked Reps. Jennifer Dunn, R-Wash., vice chairman of the House Republican Conference, and Deborah Pryce, R-Ohio, conference secretary, to craft a child care proposal.

"I am pleased that the president seems to be fighting the urge to have the federal government control child care and has embraced the Republican ideal of tax relief," Pryce said.

Lawmakers are increasingly emphasizing children's issues. Last year, Congress approved a $20 billion children's health initiative and increased funding for education as part of the balanced-budget law (PL 105-33).

Child care is an issue that crosses income and geographic lines because quality child care can be expensive and hard to find. For families at all income levels, it is a top household expense. In 1995, more than 12.9 million children under age six were in a day care setting, according to the National Center for Education Statistics. About 45 percent of infants under age one were in child care on a regular basis.

While there appears to be a consensus for some sort of child care legislation, there are strong concerns on Capitol Hill about the Clinton plan. Some Republicans criticized its scope, calling it a return to big government spending. They also complained that the proposal, a priority of first lady Hillary Rodham Clinton, did little to support stay-at-home mothers.

The strongest reservations, from both parties, centered on the fact that the White House is counting on higher tobacco revenues to finance about one-third of the proposal.

It is assumed those revenues would come from implementation of a legal settlement between states and tobacco companies, but passage of the tobacco deal is uncertain.

"Those of us who recall the 'peace dividend' of a few years ago should be cautious now about spending tomorrow's 'tobacco dividend,' " said Senate Labor and Human Resources Committee Chairman James M. Jeffords, R-Vt. He is also part of Dodd's working group.

Health and Human Services Secretary Donna E. Shalala promised the administration would find spending changes to pay for the child care initiative if tobacco money did not materialize.

"This is not pie in the sky. We are very far along, we believe, in consensus on getting the tobacco legislation," Shalala said.

The administration took pains to stress its proposal was not a new federal entitlement. While calling on states to improve regulation of child care facilities, the White House is not recommending mandatory federal standards.

The Clinton proposal would:

  • Increase the federal Child Care and Development Block Grant by $7.5 billion over five years. States will receive $3 billion in fiscal 1998 under the existing program. Congress in the 1996 welfare overhaul (PL 104-193) voted to expand the program. The White House said the new money would allow states to provide subsidies for more than 2 million children by 2003.
  • Increase the child and dependent tax credit for taxpayers whose adjusted gross income is less than $60,000 a year. The White House said the plan would provide an additional average credit of $358 a year for families and would eliminate tax liability for almost all families with incomes below 200 percent of the federal poverty line, or $35,000 for a family of four.
  • Create a tax break of up to $150,000 a year for businesses that provide child care. During debate on the fiscal 1998 tax bill last year, the Senate voted for a similar plan by Sen. Herb Kohl, D-Wis. It did not become law.
  • Provide $800 million to expand before- or after-school care programs.
  • <

    While not requiring federal regulation of child care, the proposal would aid state efforts to license and oversee day care centers, improve background checks of care providers and provide $250 million over five years for scholarships to better train child care workers.

    The plan also provides an additional $3.8 billion over five years in funding for the Head Start educational program for pre-schoolers. Congress funded that program at $4.35 billion in 1998.

    © 1998 Congressional Quarterly Inc. All rights reserved.
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