Working Families Assistance Act of 2004

WORKING FAMILIES ASSISTANCE ACT OF 2004 -- (House of Representatives - June 22, 2004)

Mr. CANTOR. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 4372) to amend the Internal Revenue Code of 1986 to provide for the carryforward of $500 of unused benefits in cafeteria plans and flexible spending arrangements for dependent care assistance.

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Mr. CARDIN. Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, let me thank my friend from Virginia for bringing forward this legislation which I support. I think it is a very important change in the flexible spending arrangements that are permitted under the Internal Revenue Code. And I thank the gentleman from Virginia (Mr. Cantor) for bringing forward this legislation.

Mr. Speaker, as my friend has indicated, this bill would permit a taxpayer to carry forward up to $500 of unused benefits in a dependent care flexible spending arrangement from one year to the next plan year. The flexible spending arrangements are a way that you can use pretax dollars to pay for expenses that are, according to what the policy makers have determined, areas that we want to encourage our constituents to be able to spend. This is in dependent care expenses, to take care of our children. This is certainly an area where it is becoming more and more difficult for working families to be able to afford dependent care for their children.

The flexible spending arrangements allow them to use pretax dollars in order to offer some help and assistance. The problem with the flexible spending arrangements is that you have to determine at the beginning of the year how much money you are going to spend for dependent care. If you are wrong and you put away too much money, you lose that money. That is certainly a pretty harsh penalty for misjudging the amount of money that you will need for dependent care. And, therefore, this bill would allow a taxpayer to roll over up to $500 from one tax year to another. And it certainly makes sense to make this modification in our Internal Revenue Code.

Mr. Speaker, I might point out though that I am disappointed that we are not doing more, not doing more for dependent care in our society. In the committee that I serve on, the Committee on Ways and Means, we have looked at authorizing additional day care aid to our states. In my own state of Maryland the only way that you can get assistance on dependent care is to go on to cash assistance welfare. That does not make a lot of sense.

Prior to a year ago, we were helping working poor in our state with dependent care from the state government using Federal assistance. Well, we have not increased that Federal assistance. I would urge us to consider increasing the amount of dollars made available for safe, affordable day care for our constituents.

In the meantime, Mr. Speaker, I do support H.R. 4372. It is a step in the right direction. And I would encourage my colleagues to accept this bill.

Mr. Speaker, I reserve the balance of my time.