Who Trump’s Plan To Pay Stay-at-Home Parents $9,000 Benefits Most - Newsweek
The Trump administration's proposal to pay parents to stay at home with their kids may not cause many Americans to quit their jobs, pull their kids from day care or fire their nannies.
After housing, child care is often the biggest expense families with two working parents have, making it one of the top sources of stress. Still, many parents can't afford to leave employment because even after paying the high costs of child care, their income, employer-provided health insurance and perks that come with their jobs are too valuable.
The Trump administration wants to give parents more options when it comes to child care and has proposed paying eligible parents $9,000 per year. Parents would have to be married, and the plan may come with income limits.
Rebekka Grun von Jolk, a lead economist at World Bank, told Newsweek that the proposal is similar to one that Germany had in place. She said the funds seemed to go to families who would not have used formal child care anyway. So parents who were going to stay at home or were already staying at home benefited most.
For many parents, $9,000 isn't enough to quit their jobs. Employed mothers working full time earn a median salary of about $65,000 per year, according to the U.S. Census Bureau. Depending on the state they live in and their tax situation, that person could bring home $52,000 after taxes.
With the average cost of care being about $13,000 per child per year, that parent would be left with $39,000. So the $9,000 benefit would unlikely be enough for them to leave the workforce. However, the Trump administration's plan could be a more enticing proposition for larger families.
Brendan Cushing-Daniels, an associate professor of economics at Gettysburg College, told Newsweek that it's possible the proposal could persuade working parents to quit their jobs if they have multiple young children.
For example, if a Mississippi couple has three kids and one parent earns $85,000, the potential income cap, and another parent earns $50,000, they could spend $30,000 in child care costs each year. Between the tax savings of one parent staying at home and the $27,000 from the program, that family could see a net increase in disposable income, Cushing-Daniels said.
The United States would not be the first country to pay parents who don't use child care. Finland provides a stipend for parents who do not use public day care for kids under the age of 3. Parents get 377.68 euros, equivalent to $433, per month as a base pay and then 113.07 euros monthly for each additional child.
In Hungary, parents can receive up to 70 percent of their salary to stay at home with their kids until they're 2 years old. Parents can then receive up to 28,500 Hungarian forints, equivalent to $90.38, per month until their child turns 3.
Final details have not been released about the Trump administration's proposal, which would pay families who have one parent stay at home with their kids $9,000 per year per child. However, these requirements are expected to be included:
Republicans had mixed reactions to the Trump administration's proposal. Some, including conservative commentator Michael Knowles, called it one of Trump's "best policies." Andrew Kolvet, a spokesperson for the conservative nonprofit Turning Point USA, likewise called the policy "phenomenal."
Michael Flynn, who served as national security adviser during the first Trump administration, described the policy as a "nice gesture" but said it didn't go far enough.
"$9K is insufficient. This number must be much higher and anyone homeschooling should also be exempt from paying various taxes (maybe federal, maybe state or local)," Flynn wrote on X.
He added, "This is a nice gesture (at this political point in the administration's tenure) but wholly incomplete and not enough!"
Other Republicans equated the plan to socialism. Angela Morabito, who served as the Education Department's press secretary during Trump's first term, wrote on X, "Taxing working moms to fund someone else's stay-at-home lifestyle is a gut punch."
Critics have also noted that the proposal would take money from the Child Care and Development Fund, a $12 billion pot that states use to help subsidize child care for low-income families.
"Allowing millions of current stay-at-home parents to access those funds would inevitably mean fewer resources for working parent recipients," the Foundation for Research on Equal Opportunity said in a blog post.
For many families, the decision of whether to have a parent stay at home doesn't always come down to child care costs outweighing their salary.
Quitting a job could also mean losing 401(k) benefits, which can be financially beneficial in the long run. And for parents who leave the workforce to stay at home with their children, returning to employment after the kids are in school may not be easy.
There's also the matter of health insurance. In some families, one parent may earn a higher salary, but the other parent's job may offer the better or more affordable health insurance policy. So deciding who leaves the workforce may be a more complicated calculation.
Given the backlash from some Republicans, it's unclear whether the administration will move forward with the proposal. But even if it does, the U.S. likely won't see an influx of stay-at-home parents.
Contact the Newsweek editor on this story: Shakeema Edwards.
