Roosevelt Institute: Direct Spending on Care Work: Thinking Beyond the Tax Code for Caregiving Infrastructure
Proposal Overview
Name: Roosevelt Institute: Direct Spending on Care Work: Thinking Beyond the Tax Code for Caregiving Infrastructure
Year: 2025
Sponsoring Organization and Key Author(s):
Sponsoring Organization:
The Roosevelt Institute is a think tank focused on advancing economic and social policies inspired by Franklin and Eleanor Roosevelt.
Key Authors:
Indivar Dutta-Gupta
Program Details
Overview: Policy report highlights the negative impacts of the current lack of affordable, quality care choices, and limited paid family leave. The study suggests that robust and equitable support for family caregivers requires increased direct federal spending, as tax-based policies alone are insufficient and inefficient. The report suggests that current tax subsidies, like the Child and Dependent Care Tax Credit (CDCTC), are often regressive and fail to address systemic issues. Instead of taxbased solutions, the report advocates for federal policy changes through direct spending; implementing a nationwide paid family and medical leave program; and making Home and Community-Based Services mandatory under Medicaid. It recommends reforming certain tax policies, such as making the CDCTC fully refundable to better align with direct spending and avoid discriminating against low-income families.
Major Legislative Recommendations
Expand/Enhance Caregiver Programs
Infrastructure
Recommends grant funding to help develop care options in underserved areas that operate during nontraditional hours (such as evenings, nights, and weekends.) It proposes requiring states to offer a range of care options in areas with insufficient supply, directly financing the creation of childcare and long-term care options in underserved areas, and targeting policies to reduce economic and racial disparities.
Medicaid
Recommends making HCBS a required benefit in Medicaid and increasing federal support for Medicaid HCBS.
Financial Supports for Family Caregivers
Tax Credit/Deduction for Caregiver Expenses
Recommends making the Child and Dependent Tax Credit fullyrefundable.
Recommends the following: (1) restricting higher-income households’ access to the Dependent Care Assistance Program (DCAP); (2) an employer-sponsored tax benefit that allows workers to set aside pretax income for child and dependent care expenses, and; (3) limiting access to those with less financial need. These changes should free up revenue to more directly and equitably support family caregivers through expansion of the Child and Dependent Care Tax Credit (CDCTC).
Recommends expanding eligibility criteria for tax-based care policies, integrating tax credit outreach, and aligning benefit and phaseout levels of tax-based care policies with direct spending programs.
Training and Education
Caregiver Training
Recommends requiring states that receive significant federal care or workforce development funding to develop career pathways and professional development opportunities in the caregiving sector.
Workplace Supports
Expanded Family Medical Leave
Recommends a nationwide paid family and medical leave program with progressive wage replacement so lower-paid workers receive a higher percentage of their earnings.