Donald Trump Proposing Child-Care Subsidies

By Janet Hook and Richard RubinElectionDow Jones Newswires

Donald Trump is proposing new federal subsidies for child care, including tax deductions, rebates for lower-income households and new tax-preferred savings accounts, as well as a new promise of paid maternity leave for workers who don't now have it.

The proposal, set to be unveiled at a speech outside Philadelphia Tuesday evening, is the latest move by the Republican presidential nominee to build up a policy agenda that has been short on detail. The child-care proposal could help Mr. Trump appeal to blocs of voters who have resisted him, such as women and swing voters that dominate the Philadelphia suburbs, even as it contravenes parts of GOP orthodoxy on tax and social policy.

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Mr. Trump is to be accompanied by his daughter Ivanka, who helped craft the child-care proposal and who spoke about the issue at the July Republican convention.

The plan fleshes out and broadens the general idea Mr. Trump brought up in an economic policy speech in Detroit in early August, when he said he wanted to offer tax deductions for child-care expenses.

Mr. Trump's proposal calls for allowing taxpayers -- both those who take the standard deduction and those who itemize deductions -- to deduct child-care expenses up to an amount equal to the average cost of care in their state. The deduction wouldn't be available to individuals earning more than $250,000, or couples earning $500,000.

The proposal also calls for providing six weeks of paid maternity leave through unemployment benefits to parents whose employers don't offer paid maternity leave. Republicans have long resisted the idea of having the U.S. emulate other countries' paid leave programs, warning about budgetary costs and government mandates. The Trump campaign said the cost of his paid-leave policy would be offset by reducing waste and abuse in the unemployment insurance program.

The Trump proposal also would offer "spending rebates" of up to $1,200 a year to lower-income families through the Earned Income Tax Credit.

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Mr. Trump also calls for a new savings account for families to save for caring for their children or their elderly parents. The accounts would be broader and more widely available than current tax-preferred "flexible spending" accounts that are available only through employers.

The proposal relies on deductions, which are more valuable to higher-income households. Democrats typically favor tax credits, which have a capped dollar value that benefits lower-income families as a share of income.

Carmel Martin, executive vice president for policy at the liberal Center for American Progress Action Fund, said that Mr. Trump's proposal still provided too much of its benefits to upper-income families. The $1,200 for low-income families is inadequate, she said, and while there is a proposed income cap for the child-care tax deduction, even upper-income people would get benefits from the tax preferred savings account.

"Donald Trump released a regressive and insufficient 'maternity leave' policy that is out-of-touch, half-baked and ignores the way Americans live and work today," said Maya Harris, policy adviser to Democratic nominee Hillary Clinton, in a statement Tuesday.

Mrs. Clinton has advanced a proposal to limit child care costs to 10% of a family's income, but has offered few details on how that would work. She has also called for universal access to preschool education, increased federal subsidies and tax breaks for child-care costs, a program to promote raises for child care workers, increased spending for Early Head Start programs, and scholarships for college students with children.

Mrs. Clinton has also proposed a law to guarantee workers up to 12 weeks of paid family and medical leave to care for a new child or a seriously ill family member. Her plan would specify that workers on leave get at least two-thirds of their regular wage, up to a ceiling,

A Trump campaign aide who described the plan couldn't say how much revenue the new tax breaks would cost. He said it would be part of Mr. Trump's broader tax overhaul and economic policy, which will be expanded in detail in a speech Thursday. He said that the goal was for the entire package to be deficit-neutral.

Rep. Kevin Brady (R., Texas), chairman of the House Ways and Means Committee, said he hadn't yet reviewed the details of Mr. Trump's plan, saying only that the nominee's overall tax package "is very close to the House Republican blueprint."

The House GOP tax plan doesn't mention child care at all, instead consolidating the existing child tax credit and personal exemptions into a single tax break.

Mr. Trump has been filling out his policy proposals in recent weeks. Last week, he detailed an array of military-spending increases he would seek, and he proposed a new program to foster school choice. Before that, he gave more details of his immigration policies in a speech in Arizona.

Write to Janet Hook at and Richard Rubin at

(END) Dow Jones Newswires