The Early Education Savings Program Act, introduced Tuesday, would expand 529 savings plans to cover child care expenses for children younger than 5 at state-licensed child care facilities.
“Every parent knows raising a family is way too expensive,” Rep. Kristen McDonald Rivet, D-Mich., said in a statement. “When parents can’t access affordable child care, they can’t go to work, and both their families and our economy suffer. Expanding 529s to cover child care is an easy and important step that will help families save for and afford child care for their young kids.”
Under the bill, H.R. 6272, the accounts would have no cap on contributions or balances used for child care expenses, according to the bill's sponsors. The legislation is co-sponsored by Rep. Ashley Hinson, R-Iowa.
Child care affordability "continues to be a crisis for the nation’s workforce," McDonald and Hinson said, citing U.S. Chamber of Commerce estimates that "states lose $1 billion per year in economic activity due to a lack of affordable and accessible child care."
The study also found "that absences and employee turnover, which often stem from a lack of child care, cost employers between $400 million and $3 billion a year," the lawmakers said.
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