Fixing American childcare

Childcare policy is finally getting its moment in the sun, courtesy of a new push in President Obama’s State of the Union address. “In today’s economy, when having both parents in the workforce is an economic necessity for many families, we need affordable, high-quality childcare more than ever,” Obama declared.

Childcare in the United States has long been a scattershot mess. It has been a distressingly unregulated and uneven non-system, leaving the children of working parents dependent on their family’s purchasing power to pay for decent care. It’s an under-attended national scandal, raising familiar problems of quality, affordability, and access.

Recently, Congress took several important steps to improve American childcare. While reauthorizing the Child Care and Development Block Grant program, it attached conditions a series of conditions to improve the quality of care, such as by requiring background checks and training. It also increased funding for the CCDBG, making it more affordable for more families. And it encouraged states to create Yelp-like websites that would make it easy for parents to vet others’ experiences with potential daycare facilities.

The tripartite problems of quality, affordability, and access in childcare echo those that we’ve confronted in American healthcare. But childcare has little of the entrenched institutional attachment to a particular system that’s analogous to private, employer-provided health insurance. This makes childcare a particularly interesting policy area, for it might be more amenable to fundamental change than healthcare proved to be.

One solution would be to provide free or subsidized public options for childcare at schools or other public facilities. This would be a simple and elegant solution for the core problem in American childcare: the lack of a public option. The public education system’s primary purpose is, of course, educating children. But for working parents, it doubles as a valuable place for children to go during work hours. We provide no such public option for parents with young children. If we entrust the public sector to look after our four- and five-year-olds, there’s little reason to think that they can’t do the same for three-year-olds.

This might sound radical (or even French!), but we had universal childcare in the United States once. As Obama referenced in his speech, the Lanham Act established government-provided daycare so mothers could go to work during World War II.

This was a temporary wartime program, but we very nearly had this same type of system enacted permanently in the 1970s. Congress passed the Comprehensive Child Development Act, which would have created a “national network of federally funded child care centers, with tuition subsidized depending on a family’s income,” as Emily Badger explains. But for President Nixon’s veto, we may have had universal daycare for the last forty years.

The CCDBG reauthorization has taken a different tack, one reminiscent of the structure of healthcare reform established in the Affordable Care Act. It moves us toward a system of state marketplaces for parents to explore childcare options. It tightens quality controls by setting requirements for licensing and requiring due diligence in hiring by care facilities. And it provides subsidies for care among some low-income families purchasing it.

Even within this nascent framework, there’s substantial room to improve our support for working families. The CCDBG’s current funding is only enough to serve one out of every six eligible families. Yet childcare has become prohibitively expensive for all families. The average cost of care exceeded the average homeowner’s mortgage costs in 22 states in 2011. It even exceeded the costs of instate college tuition and fees in 35 states.

Families need far more help than they are getting. Both President Obama and the House Democrats have proposed making care more affordable by boosting our other childcare subsidy, the Child and Dependent Care Tax Credit. Obama would triple it, offering families as much as $3,000 annually for each child under age 5. The House Democrats propose doubling the CDCTC, subsidizing up to 25 percent of childcare costs up to $8,000 per child (or $16,000 for two or more children).

Just as we encountered with health reform, fixing childcare in the United States will undoubtedly raise fraught political tensions. Most notably, subsidizing families who place their children in care facilities raises the question of whether we should likewise subsidize parents who stay home with their children. Conservatives at the National Review have breathlessly portrayed Obama’s CDCTC proposal as an assault on traditional motherhood. “Most mothers, especially of small children, prefer to work part-time or drop out of the labor force for a time,” the editors write. “Commercial child care is the least favored option for most parents. The president’s plan encourages families to do what they do not wish to do and penalizes them for refusing.”

In reality, the CDCTC is no more a tax penalty on stay-at-home parents than the Home Mortgage Interest Deduction is a tax penalty on renters. By helping offset the costs of childcare, the government provides relief to millions of families for whom “commercial care” is an economic necessity. In fact, researchers have seen a slight rise in the number of stay-at-home mothers in response to our current state of affairs, where childcare costs have become so daunting as to make workforce participation an economic wash for some mothers.

Still, there is a strong case for compensating parents doing the serious and socially beneficial work of full-time childrearing. Though doing so might come at an economic cost by removing some parents from the labor force, this is a cost we ought to be willing to bear. It might make sense to simply package the CDCTC and the Child Tax Credit into one large child subsidy. (Indeed, the National Review proposes just this sort of alternative.)  We might give a larger subsidy to children under the age of 5 to compensate parents for providing care before their children reach school age.  And ideally, we might provide this subsidy as a periodic child allowance throughout the year, rather than just during tax season.

Second, how we fix childcare might influence how we design other policies, like family leave.  For instance, how early are we comfortable with putting children in the care of others?  Research seems to indicate that children benefit from spending the first year with their parents. This suggests a need for longer guaranteed parental leave, perhaps six months per parent instead of the three months currently provided by the Family Medical Leave Act.

And third, childcare might be a policy area where it makes sense to impose some kind of employer mandate or otherwise encourage firms to provide for on-site or nearby childcare. Yes, this would impose costs on business, but we could provide tax nudges to ease the burden. And these costs might be worth the benefits — psychic, convenience, and economic — that parents would enjoy from having their young children close by during the workday.

These questions are ones worth grappling with. For too long, our childcare system in the United States has hardly been a system at all. We’re just now beginning to tackle the project of making childcare better and more affordable to the average family — and there’s still much to be done.

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