Child care about to get more expensive as federal funds dry up – Portland Press Herald/WaPost
The most morally defensible and economically efficient policy approach – and perhaps best chance for political agreement – is to target continued childcare subsidies to low-income families and economically strapped areas. How Congress and the White House deal with this issue provides an acid test of whether either party prioritizes the pressing needs of low-wage workers and their children.
While Republicans tend to resist almost any attempt to direct money to people in the bottom 50% of the income distribution, in recent years the Democratic party has focused most of the needs of upper middle class professionals, often at the expense of the working class.
The Biden Administration’s childcare subsidies in its failed Build Back Better (BBB) legislation is an example along with refusal to raise taxes on families making as much as $400,000 a year. In 2021, the BBB’s childcare provisions were poorly targeted and could have had serious inflationary impacts. (See: CCSE’s “White House’s promised childcare subsidies face a host of ‘devils in the details’”.)
The $1.75-trillion BBB proposal to cap childcare expenses at 7% of income for families earning up to $300,000 faced policy hurdles regarding cost, equity, long-term economic impacts, and how such a program might be administered. While subsidized childcare would have met a pressing need for many low- and modest-income working parents, providing generous benefits to upper-income professionals, and resulting inflationary impacts, would likely have pushed the program’s cost as high as $1 trillion over 10 years.