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Ivanka Trump finds her cause, and Democrats love it

CNBC logo CNBC 3/7/2017 Ylan Mui

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Ivanka Trump faces an uphill battle as she tries to build support for her signature issues of affordable childcare and paid family leave, courting corporate executives and wooing lawmakers in hopes of generating momentum amid a packed legislative agenda in Washington.

Trump appears to be making headway with one important player, however: her father. In President Donald Trump's speech laying out his vision for America to Congress last week, he highlighted both issues as having bipartisan appeal, along with defense and infrastructure spending.

"My administration wants to work with members of both parties to make child care accessible and affordable, to help ensure new parents that they have paid family leave," Trump said to a round of applause.

But the prospect of near-term action remains slim. The White House has set an aggressive timeline for making good on its core campaign promises: It hopes to repeal and replace the Affordable Care Act by Easter and then tackle a massive overhaul of the nation's tax code by August. There are also routine tasks such as drafting the federal budget and raising the debt ceiling that have turned into flashpoints in the past.

Meanwhile, Ivanka Trump's proposal has gotten pushback from several corners. Her plan would allow families to deduct childcare expenses from their taxable income. The amount is capped at the average cost of childcare in their state and applies to children younger than 13. Stay-at-home parents would also be eligible for the deduction.

Low-income families would be able to receive a refundable tax credit of 7.65 per cent of their childcare costs, though stay-at-home parents are not eligible for this benefit. In addition, her plan would create savings accounts of up to $2,000 a year. Contributions would be tax-deductible and any earnings would be tax-free.

"It's smart to use the tax system for child care policy," said Sheila Marcelo, chief executive of health care marketplace Care.com, told CNBC. "I disagree that a deduction is not necessarily the most effective way if we're trying to address the cost of care."

Marcelo recently attended to a dinner with Ivanka Trump and other female executives to solicit their perspectives on the broad issues of women in the workplace and family-friendly policies. Marcelo said they did not debate the details of Trump's plan but said her preference is for a larger refundable credit to provide greater benefits for poor households.

Benefits go mostly to top earners

An analysis by the Tax Policy Center found that 70 percent of the benefits would go toward households making $100,000 or more. The estimated after-tax income of families making less than $40,000 would increase by just $20, the report found. Households earning between $100,000 and $200,000 would enjoy a $360 boost.

The Tax Policy Center projected the total cost of the tax breaks would be $116 billion over the next decade.

"This is an example of a proposal that could spend less and help people more by targeting it properly," said Heidi Hartmann, president of the Institute for Women's Policy Research.

Still, Trump's proposal dovetails with Democrats' calls for childcare and family leave policies that encourage women to enter and remain in the workforce. She surprised conservatives and liberals alike when she announced the plan in a speech at the Republican National Convention last summer and followed up with a roundtable with female GOP lawmakers while there.

Since then, Trump has been meeting with key lawmakers make her cause and gauge their interest. Last month, she invited several Republicans to the White House to discuss the issues. Senator Deb Fischer, R.-Neb., was among the attendees. She recently reintroduced a bill that gives companies tax credits for providing paid family leave and another that would boost protections for women seeking equal pay in the workplace.

"The White House has expressed strong interest in making progress on them," Fischer said. "Let's seize this opportunity and make a difference for families across this country."

In addition, policy staff from the influential House Ways and Means committee held a phone call with the Trump's transition team in January before the inauguration, according to a congressional aide.

"We've had some preliminary and very productive discussions with the Trump transition team and their desire to make childcare more affordable for families," committee Chairman Kevin Brady, R.-Texas, said in a statement. "So we're exploring a number of options. They've brought some ideas forward, and it's early in those discussions, but we're having them."

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