“There isn’t a single reason in the world when any parent needing to pay for day care should not have a $8,000 tax credit,” he told an audience at the Poor People’s Campaign presidential forum.
Biden has not released more details on this plan, and his presidential campaign didn’t specify whether all households, regardless of income, would be able to get the credit.
But in 1981, Biden stood alone against expanding a child care tax credit. The Senate voted 94-1, with the then-Democratic senator from Delaware the sole no vote. And what was surprising was not just his vote, but the way he justified it on the Senate floor.
Many of the former vice president’s positions from this time period are now at odds with where the current Democratic Party is, prompting challenges from his 2020 primary opponents about whether he still holds them or whether he has evolved. His campaign declined to comment for this piece.
Biden was concerned that wealthier families shouldn’t get government assistance for child care. He also made a moral argument, saying the federal government shouldn’t encourage parents to leave the home for work unless it’s absolutely necessary for economic survival. It’s an argument that, had it carried the day, would have disproportionately affected women.
Biden ― who had spent part of the past decade as a single father following the deaths of his wife and daughter ― lamented that the Senate was considering a bill to give well-off working parents a tax credit for child care expenses. From a report in the Indianapolis News on July 29, 1981:
I think it is a sad commentary on this society when we say, as a matter of social policy, that we should make it easier for people who have neither the financial necessity nor the personal need to forget their responsibility to take care of a child all day from the time the child is an infant until the time he or she gets in school. I do not care whether in a modern marriage you want the man or the woman to take that responsibility. That has to be resolved by each couple individually. ...
So what we are doing now as a social policy, is saying, “Here, drop them off at 8 o’clock in the morning and pick them up at 3 o’clock in the afternoon, because I want a new patio; because I want to go on vacation; because I want to expand my horizon.” As a social policy I think it is undesirable and wrong.
To be clear: Biden did not oppose the child care tax credit. He supported expanding it for couples making less than $30,000 (about $88,000 in today’s terms). The amendment he voted against benefited people earning more than $30,000 ― but more notably it also would have helped workers with the lowest incomes, who would have been able to receive cash refunds had it become law in its original form.
Biden offered his own amendment to eliminate the credit for couples making a combined income of more than $30,000. Single parents would have had no cap.
In his floor remarks on July 28 of that year, Biden framed his argument in personal terms. He noted that his own Senate salary was $60,000, and his current wife, Jill Biden, made $15,000 as a teacher.
“It is outrageous to make my father, who makes less than $20,000 a year, to pay a tax to see to it that I can put my child in a day care center. I think that is preposterous,” he said, using his father as a stand-in for the U.S. taxpayer. “If my wife and I want to do that, no one should be able to stop us. ... But my father should not pay for that.”
There are those who will say that this amendment will hurt women’s opportunities to work, that it discriminates against women. Well, I will stack my voting record on women’s issues in the nine years that I have served here in this body against anybody else in this body. Sen. Joe Biden (D-Del.), 1981
Biden well understood the challenges of working and raising children, especially as a single parent. He had lost his wife and daughter in a car accident in 1972, right before his swearing-in as a senator.
“All you have to do is to be a single parent for a couple of days and find out that you have no choice, you have to do something,” Biden said. “You either stop working and take care of that 2-year-old child full time or you find someone in your family to take care of your child or you pay somebody to take care of your child.”
Pete Davis worked as a congressional tax economist at the time. He said he did not remember Biden’s child care tax stand. He did remember seeing Biden take the train home to Delaware on weeknights throughout the 1970s to be with his two surviving children.
“Whenever you see a solo vote against something, he’s just trying to make a statement,” Davis said. “He has no intention of killing the bill.”
Where Biden really received pushback from his fellow senators was on the issue of empowering women to enter the workforce.
The reality was, especially then ― and still now ― that child-rearing responsibilities most often fell on the mother. So Biden’s belief that families should ideally have one parent at home would effectively mean that fewer women would be able to pursue career opportunities. At the very least, Biden believed, the government shouldn’t be encouraging such a break from tradition.
In the 1980s, the number of women working outside the household had been rising steadily, reaching 50%, up from less than 35% three decades prior, according to the Bureau of Labor Statistics. (Female labor force participation peaked at 60% in 1999.)
The amendment that Biden opposed was supported by women’s groups and was part of an effort to acknowledge this changing family life.
“I have taken the view that a mother who joins the workforce ought to be able to deduct the cost of hiring a babysitter, no matter what her tax bracket might be or what it costs to hire the babysitter. I predict, in time, that is where we are going to be, because it is discriminatory to do otherwise,” said Sen. Russell Long (D-La.) in response to Biden’s proposal of an income cap.
Other senators noted that $30,000 was still squarely middle class. And the income cap didn’t take into account how many children a family had. That income would look very different to a family of four children compared to a family with one child. Additionally, as Sen. Howard Metzenbaum (D-Ohio) pointed out at the time, a single parent making $1 million would still be eligible for the tax credit under Biden’s proposal.
Biden responded, once again, on social policy grounds, saying “the single biggest problem facing us today is our desire to avoid individual responsibility.”
“If you have a mother, father, son or daughter, it is your responsibility to make whatever sacrifices are necessary to provide for the care of those folks unless there is a financial or physical inability for you to do so,” said Biden, then 38.
Over the past 40 years, lawmakers have repeatedly made the tax code more generous to working parents as attitudes toward work and family have shifted and two-parent households increasingly became two-income households.
Lawmakers created the earned income tax credit in the 1970s to give low-income workers a cash refund at tax time, essentially boosting wages as a way of both encouraging work and reducing poverty. They also created the child and dependent care credit to lower taxes for people with child care expenses that were necessary for them to do their jobs.
But the latter credit was not refundable, meaning if it pushed a low-income worker’s income tax bill below zero, they wouldn’t get the money back in a refund, as with the earned income credit. In 1981, both Democratic and Republican senators wanted to make the child credit refundable.
“If your income is too low to pay taxes, a tax credit such as this is of no help at all unless it is made refundable,” Sen. Al D’Amato (R-N.Y.) said.
Biden did not say anything about refundability, instead arguing simply that wealthy two-parent families shouldn’t get the credit.
The child care tax credit was one part of a much broader tax bill called the Economic Recovery Tax Act, which slashed income tax rates across the board and made several big changes to the tax code, including indexing tax brackets to inflation so they would be automatically adjusted every year to keep pace with rising prices and wages.
“In ’81 you had big Reagan tax cuts, huge tax cuts being considered, and you had one refundable credit at the time, the Earned Income Tax Credit, so this was going to make a second refundable tax credit,” Mark Mazur, the Robert C. Pozen director of the Tax Policy Center, said in an interview. “Back in those days, it was viewed as a bigger deal.”
The final bill made the child and dependent care tax credit more generous, but did not include Biden’s income limit or the refundability provision, which was just one part of the amendment Biden opposed. The overall bill passed the Senate 67 to 8, with Biden voting yes.
To this day, the child and dependent care credit is not refundable and has no income limit, meaning it primarily benefits middle-income and wealthy households. But Congress has continuously expanded the earned income tax credit, which primarily benefits working parents, and in 1997 created the Child Tax Credit, which Republicans expanded for wealthy households in their 2017 tax law (largely covering the elimination of another provision that benefited families). The child credit went to 14 million households last year, while only about 6 million claimed the child care credit. The earned income tax credit, which mostly benefits parents, went to 24 million.
Beyond that 1981 vote, Joe Biden has supported the child credit and other expansions of tax credits for working people. In 2009, Biden helped get three critical Republican senators to support the Obama administration’s stimulus package, which included a provision making it easier for families to get a refund from the child tax credit. And the fiscal cliff deal of 2012 that Biden was instrumental in securing preserved a previous expansion of the credit, which as a senator Biden had also voted to create in the 1990s.
His outburst in July 1981 may have been an isolated incident. He wasn’t on the Finance Committee, which oversees the tax code.
“It’s not that often that people who aren’t on the committee get into technical discussions of tax policy,” Davis said.
Nowadays, bigger tax credits are at the forefront of Democratic policy innovation, with presidential candidates pitching tax credits to offset housing costs, to offset child care costs, to slash poverty across the board. And Biden is getting in on the action, with his proposed $8,000 tax credit for “any parent needing to pay for day care.”
It’s not clear exactly what the former vice president means. He could be talking about boosting the child credit, which allows households to subtract $2,000 per child from their tax bill. Or he might favor changing the original child and dependent care tax credit, which typically gives middle- and upper-income families somewhere between $500 and $600, since that credit specifically requires taxpayers to document their child care expenses.
The most progressive tax credit would not only be refundable, so that lower-income households get cash back at tax time, but it would also eliminate the income requirement, so that the very poorest ― people with no income at all ― could still benefit. Several Democrats in the House, the Senate and the 2020 primary field have endorsed such ideas. Biden’s campaign has declined to say what he’s getting at.
During the floor debate in 1981, Biden acknowledged that some of his arguments sounded like something from the Moral Majority ― the right-wing evangelical group that was a political force at the time. But he disputed any criticisms that he wasn’t backing women’s rights.
“There are those who will say that this amendment will hurt women’s opportunities to work, that it discriminates against women,” Biden said. “Well, I will stack my voting record on women’s issues in the nine years that I have served here in this body against anybody else in this body.”