Feenstra: Lowering the cost of childcare for our families

On my 36-county tour, I have met with families, small business owners and childcare providers who are rightfully concerned about the skyrocketing cost of childcare. As a father of four, I agree that we need real solutions to lower costs for our families, especially as inflation eats away at paychecks and gas prices are on the rise.

While my children have grown up, I remember the days when my wife and I had to balance our jobs with raising our four kids, and ultimately, sending them to daycare. To be blunt, it wasn’t easy, and to this day, too many parents are still struggling to find affordable childcare options that fit into their schedules and allow them to pursue full-time careers.

Like I do after all my stops on my 36-county tour, I took my candid conversations with families, businesses and childcare professionals back to Congress and led legislation to address the childcare affordability crisis. My two-pronged approach focuses on helping businesses supplement the cost of childcare for their workers and ensuring that families can keep more money in their pockets to dedicate to the care of their kids.

Alongside my colleague from Nebraska, Rep. Adrian Smith, who serves on the House Ways and Means Committee with me, I introduced the Small Business Dependent Care FSA Opportunity Act. This legislation would create a new tax credit for small businesses with up to 100 employees for the start-up costs of offering Dependent Care Flexible Spending Accounts (DCFSA) as an employee benefit. A DCFSA is a pre-tax savings account that can be used to pay for summer camps, before- and after-school programs, and other forms of daycare. In this case, employees would be able to park up to $5,000 per year in an employer-offered account to dilute the increasing cost of childcare.

The need for this reform is profound. According to the 2023 Bureau of Labor Statistics Employee Benefits Survey, only 27 percent of people employed by a small business with fewer than 100 employees have access to a DCFSA, while 61 percent of employees at larger businesses have access. This imbalance unfairly punishes small businesses – which employ the vast majority of Americans – and prevents them from retaining workers. By making it easier for small businesses to help their employees cover the cost of childcare, we can keep our main streets strong, lower costs for families, and help parents balance their careers with raising their families.

In conjunction with this bill, I also introduced the Combatting High Inflation Limiting Daycare (CHILD) Act to double the amount of money that families are allowed to save tax-free in DCFSAs to pay for childcare. This approach lets parents – not federal bureaucrats – decide how best to spend their hard-earned money when it comes to caring for their children. In light of recent economic indicators, the contribution limit would also be adjusted for inflation to keep up with rising prices.

Since 1986, the maximum contribution limit of $5,000 per household has not changed. It doesn’t make any sense. That’s why my bill would double the limit from $5,000 to $10,000 for joint filers and from $2,500 to $5,000 for independent filers. When we let families keep more of their hard-earned money and allow parents to make the best decisions for their children, we achieve better outcomes. This legislation puts parents in the driver’s seat and incentivizes smart investments in childcare.

A strong workforce and a resilient economy depend on affordable and accessible childcare options. By allowing our businesses to help their employees cover childcare expenses and giving parents more financial flexibility when it comes to putting their kids in daycare, we can keep our families rooted in rural Iowa and support economic growth up and down our main streets. I will continue to advocate for policies that help our families thrive, and work to get these two bills across the finish line and signed into law.

Rep. Randy Feenstra (R-Hull) has represented Iowa’s Fourth Congressional District in the U.S. House of Representatives since 2021.