President Donald Trump’s recently passed Big Beautiful Bill features crippling cuts to health insurance, food stamps, and clean energy programs, yet significant new spending on child care. Lawmakers plan to invest $16 billion into three federal tax credit programs that haven’t been permanently updated in decades.

That a Republican-led Congress would lead on new child care spending is unusual and reflects changing political priorities, as child care becomes harder for families to afford and harder for businesses to ignore.

Traditionally, social conservatives have been skeptical of federal involvement in child care, viewing it as a family responsibility rather than a government role, and fearing that subsidies could edge out private or faith-based providers. Meanwhile, fiscal conservatives have spent years pushing to shrink — not expand — domestic spending.

Even Democrats, who made child care central to their social agenda, failed to deliver when they held unified control in 2021. Their sweeping Build Back Better agenda collapsed as advocates struggled to prioritize among competing demands and key lawmakers balked at the overall cost.

The new child care provisions — spearheaded primarily by Sen. Katie Britt of Alabama — deliver distinct nudges toward affordability, access, and infrastructure.

Lawmakers:

• Raised the cap on Dependent Care Flexible Spending Accounts for the first time since 1986, from $5,000 to $7,500. These employer-sponsored accounts let families pay for eligible expenses like day care, preschool, and summer camp using pre-tax dollars.
• Permanently expanded the tax credit for working parents — known as the Child and Dependent Care Tax Credit (CDCTC) for the first time since 2001. The typical benefit for a dual-earner, middle-income family with two kids will increase from $1,200 to $2,100.
• Tripled the tax credit for businesses that help employees find or provide care, with extra incentives for small employers. This was also last updated in 2001.
• Modestly expanded the Child Tax Credit (which can be used for a broader array of household expenses beyond child care). They raised the maximum refundable portion from only $1,600 to $1,800 per child.

Those likely to benefit from most of these investments are middle- and upper-middle-class parents, especially those with steady earnings and access to workplace benefits like flexible spending accounts. These families often face steep child care costs — median spending is around $800 per month, according to the Federal Reserve — but earn too much to qualify for most existing subsidies.

Very low-income families will have much less to celebrate since the child care credits can’t be claimed by households that owe little or no........

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