The Big Story: Women startup leaders call on Congress to expand child tax credit
Today, 60 women founders and startup ecosystem leaders from 26 states are calling on Congress to permanently expand the child tax credit, helping to support women entrepreneurs. Women founders, who drive innovation across the startup ecosystem and are increasingly their family’s breadwinners, need access to affordable child care to be able to pursue entrepreneurship. As Congress settles in with their end-of-year to-do list, mothers and women entrepreneurs encourage Congress to support them by expanding child care resources like the child tax credit.
Expanding child care resources enables more people to start businesses. In 2021, Congress temporarily expanded the credit through the American Rescue Plan, helping millions of families with children to afford the resources they needed, from rent, to food, to child care. The expansion kept over 3 million children out of poverty while giving parents more of a financial cushion so that they could pursue paid work and work more hours. And the credit was larger and fully refundable, allowing more low-and no-income families to benefit. For many would-be founders, the expansion allowed them to pursue entrepreneurship, resulting in thousands of new businesses created, because they had a more robust safety net. The return to a lower credit throttles those gains, and an impending crisis in child care access and affordability puts them further at risk as billions in child care stabilization funds are set to expire at the end of the month. Millions of families are at risk of losing their access to affordable care for their children, something lawmakers are seeking to address through the Child Care Stabilization Act.
For women founders who are mothers, access to affordable child care is critical. Women founders already face significant barriers outside of caregiving responsibilities—like diminished capital access and fewer networking opportunities. Women founders often have to work harder for less despite the fact that women-founded startups are more likely to be successful than their male-founded counterparts when they receive the resources and support they need. They perform better over time, produce higher return on investment, and generate more revenue over five years. But child caregiving responsibilities slow the startup journeys of women everyday, as mothers continue to shoulder the bulk of child care responsibilities. Without more support—including through an expanded child tax credit—and more affordable child care, women founders will continue to struggle. Congress must take steps to ensure working families, including women founders, have access to the care they need, including by permanently enhancing the child tax credit.
Policy Roundup:
Congress explores AI in hearings, closed-door forum. This week, Congressional committees held several hearings on AI, diving into issues of transparency, oversight, and government procurement, while the Senate convened an AI insight forum for senators and staff to learn about how they should approach AI from industry leaders and labor groups. Also this week, Senators Blumenthal (D-Conn.) and Hawley (R-Mo.) maligned the insight forum and set out their own AI regulatory framework to require government licensing of AI and greenlight private lawsuits against AI companies. The efforts come as Congress weighs how to proceed with legislation on AI that mitigates risk, seizes opportunities, and promotes innovation.
Federal Judge once again rules DACA unlawful. Judge Andrew Hanen handed down a decision this week in the Southern District of Texas, once again ruling the Deferred Action for Childhood Arrivals (DACA) program unlawful. The decision, which faces almost certain appeal in the less than favorable Fifth Circuit, is expected to make its way to the Supreme Court, where the fate of hundreds of thousands of immigrants brought to the U.S. as children will ultimately be decided. While new applicants are barred from the program, current DACA recipients will be able to maintain their status, at least as the case continues to wind its way through the legal system. Engine has repeatedly highlighted positive contributions of immigrants to the U.S. startup ecosystem. Congress must pass a legislative solution so that DACA recipients—who include startup founders and critical STEM talent—have a pathway to permanently remain in the U.S.
House committee examines impact of banking regulation on small business. This week, a House Small Business subcommittee held a hearing exploring how the regulatory environment is impacting the competitiveness of startups and small businesses. Lawmakers and witnesses lamented capital requirements for banks, showing how the new requirements could diminish the ability of banks—especially smaller banks—to extend loans to startups and small businesses. Credit is an important component of capital access for many startups, and policymakers should find a solution that shores up the banking system without hindering startup success.
State privacy patchwork continues to grow absent congressional action. On Monday, Delaware’s governor signed into law a comprehensive data privacy bill passed by the legislature earlier this summer, officially becoming the 13th state in the privacy patchwork. The patchwork of varying—if similar—data privacy laws creates duplicate costs for startups and burdens their growth, which must be solved with a uniform federal data privacy law. Recently, both Democrats and Republicans have each penned op-eds underscoring the need for a uniform federal privacy framework as necessary for innovation and to form a foundation for regulating emerging technologies like AI.
Startup Roundup:
#StartupsEverywhere: San Francisco, California. Prism is a trailblazer for LGBTQIA+ innovators under the leadership of Renée Rosillo, a trans woman, community leader, and founder. Renée's journey from UN engagements to entrepreneurial pursuits has converged into Prism, a pioneering platform that is weaving connective tissue between queer founders, funders and operators the voices of LGBTQIA+ entrepreneurs. We spoke to Renée about her experiences building startups and navigating the ecosystem as a queer founder, how she believes policymakers can open up investment for all founders, and her goals for Prism for the future.
