This week, Joe Biden released his plan to address caregiving in the United States. Headlined “The Biden Plan for Mobilizing American Talent and Heart to Create a 21st Century Caregiving and Education Workforce,” it covers everything from aiding individuals who care for aging family members to providing early care and education to children. Biden’s plan would also leverage federal funds and regulations to increase pay for healthcare and childcare workers.
While there is much for free-market proponents to dislike in the Biden plan, the childcare portion of the plan is particularly concerning. As a mother, I raised my eyebrow when I heard candidates recommend “universal childcare for every baby in this country age zero to five” at a Democratic presidential debate in February. Placing babies in government-regulated and financed childcare is the last thing most mothers want. Regrettably, the Biden plan follows through on this misguided idea.
The key childcare provisions of the Biden plan include:
- Provide all three- and four-year olds with free pre-kindergarten.
- Offer a refundable tax credit covering 50 percent of childcare costs up to $8,000 per child and $16,000 for two or more children. This credit would phase out completely for households with an income of $400,000.
- Increase funding for the Child Care Development Block Grant (CCDBG) program to enroll more children in after-school care, offer a sliding scale of assistance to families with children ages five and under and incomes below 150 percent of the median, and cap childcare costs at 7 percent of annual income families under 150 percent of the median.
- Regulate childcare providers to ensure “high-quality” care, using the government to ensure: “a developmentally appropriate curriculum, small class sizes, and support positive interactions between educators and children that promote children’s socio-emotional development”.
- Provide bonuses to childcare providers who offer hard-to-find care, such as nontraditional hours, care for children with special needs, and care in rural areas.
- Offer a construction tax credit to businesses that build childcare facilities at places of work, as well as funding new childcare facilities and upgrades to existing facilities.
- Pay childcare workers more.
The Biden plan is a confusing mix of policies popular on the left rather than a cohesive plan to address the needs of working parents. In fact, many of the provisions included in this plan work against each other. If we introduce refundable tax credits to cover childcare costs, why do we need to offer additional childcare assistance with spending caps, let alone free universal preschool? Some might argue that so many different policies would give flexibility to working parents, but in truth, it will just confuse parents and misuse public dollars. It is also not clear that these policies would improve things for children. Quebec’s universal childcare program, similar to what the Biden plan proposes for three- and four-year olds, led to worse outcomes for participating children, and Tennessee’s state prekindergarten program had no impact on child achievement.
The other problem is that Biden’s plan continues the trend of government favoring high-cost, center-based childcare instead of giving parents the best options for their children. Centers might serve some families well, but many families either cannot use centers (e.g., those working nontraditional hours) or prefer more intimate care (e.g, parents of infants). Government regulations place onerous requirements on childcare providers, which many family-based arrangements cannot meet, resulting in fewer overall childcare options. A recent study from the Department of Health and Human Services found that the percentage of children in family-based childcare declined from 22 percent in 1994 to 12 percent today, disadvantaging many parents and children who need those arrangements. The Biden plan will make the burden of these requirements worse.
The Biden plan gives a nod to these problems by offering to pay providers more to care for children not served well by centers, but “incentive” payments are a poor solution to a problem that stems from government overreach in the first place. In fact, the CCDBG in 2014 allowed states to offer bonus payments to providers who offered non-traditional arrangements, but few states do and even fewer states know whether these incentives effectively increase access to different childcare arrangements.
Access to affordable childcare is still a significant problem for many working families, and it will likely get worse as more family-based childcare providers close due to the pandemic. A patchwork of policies aimed at increasing government control over childcare will do little to solve these problems and even less to support the development of children. The best idea in Biden’s plan is to provide a large refundable tax credit to low-income families so they can work and afford childcare that they choose, letting market forces increase the overall quality of childcare. Biden’s plan should have stopped there.
This article first appeared in 2020 on the AEI Ideas blog.