Congress passed the Universal Childcare Affordability Act in a landmark bipartisan vote, capping childcare costs at 7% of family income for households earning under $200,000 annually. The legislation, signed by President Trump, is estimated to save the average American family with two young children $14,000 per year and directly affects 22 million children under the age of five.
The bill creates a federal subsidy program that pays childcare providers the difference between what families contribute and the actual cost of care. It also sets minimum quality and wage standards for childcare workers, who currently earn a median of $14.60 per hour despite their critical role in enabling parental workforce participation.
Economists project the law could boost female labor force participation by 6 percentage points and add $600 billion annually to GDP by reducing the structural barrier that childcare costs present to working parents, particularly mothers.