| 3.23.22

Should the Feds Provide Free Childcare for Needy Families & Subsidize Childcare Costs for Others? (S. 1878)

Do you support or oppose this bill?

What is S. 1878?

(Updated December 28, 2021)

This bill — the Universal Child Care and Early Learning Act — would fund a system of locally-run, affordable, high-quality childcare programs. It would mandate federal investment in childcare, ensure that families below 200% of the poverty get free childcare and ensure that all families would spend no more than 7% of their incomes on childcare.

Specifically, this bill would:

Ensure universal access to childcare: This plan would create a mandatory federal investment to establish and support a network of locally-run Child Care and Early Learning Centers and Family Child Care Homes so that every family, regardless of their income or employment, could access high-quality, affordable childcare options for their children from birth to school entry.
Guarantee affordability: Families below 200% of the federal poverty line (about $51,500 for a family of four) could access these childcare options at no cost. Families with higher incomes would pay a subsidized fee based on their income, as in the military childcare program. No family would pay more than 7% of their income for these public childcare options.
Provide high-quality, essential developmental services: Centers and Family Child Care Homes would be required to meet high quality standards based on current U.S. military childcare and the Head Start program standards. Providers would receive support and time to meet new requirements, which would focus on early learning and social-emotional development. Like Head Start, the program would offer a full range of comprehensive mental and physical health, dental, and other services to children who need them in a safe and nurturing environment that promotes children’s holistic growth and development.
Be locally-administered and federally-supported: As originally envisioned in the Comprehensive Child Development Act of 1971, the federal government would partner with sponsors —states, counties, cities, school districts, tribal organizations, or other nonprofit community entities — to administer the program in a way that prioritizes local community needs and coheres early childhood systems. These sponsors would act as local “hubs” by establishing networks of Child Care and Early Learning Centers and Family Child Care Homes options for families, mirroring options currently available to military families.
Invest in childcare workers: The plan would require that compensation (wages and benefits) for childcare workers be comparable to those of similarly-credentialed local public school teachers. It would also invest in worker training and professional development modeled after the military childcare program.
Include pre-Kindergarten educational services: The network of Centers and Family Child Care Homes would provide pre-K curriculum and educational services for children before they enter school. This bill would also incentivize states and cities to expand their investments in early childhood education.
Build on existing programs: The plan would fully integrate Head Start providers to create a unified system for families that serves the needs of all children currently eligible for Head Start services. It would also maintain the Child Care and Development Fund to help low-income families access other care options, including extended hours and afterschool care for children up to age 13.
Establish Universal Child Care without increasing the deficit: After accounting for the economic impacts of this proposal, Moody’s Analytics estimates that this program would cost the federal government approximately $70 billion per year or $700 billion over 10 years. Senator Warren’s proposed Ultra-Millionaire tax is projected to raise nearly four times that amount of revenue over the same period. Therefore, if Congress funded this program using revenue from Senator Warren’s proposed Ultra- Millionaire Tax, this program would increase productivity and labor force participation without raising the deficit.

Argument in favor

Child care costs have risen to untenable levels for many American families. It’s time for the federal government to step in to help hardworking families pay for the childcare that’s needed to ensure their children are happy, thriving, and well-cared for while parents are at work. Head Start/Early Head Start and the Pentagon’s universal child care program for military families demonstrate that the federal government can play a role in supporting childcare.

Argument opposed

This proposal has the potential to be incredibly expensive, and it’s unclear whether Sen. Warren’s proposal ultra-millionaire tax would be able to support its cost even if it’s deemed Constitutional (and that itself is questionable). Additionally, it could distort the labor market by disincentivizing parents to stay at home, which could have serious negative consequences for the housing market.

Impact

Children; families; working parents; childcare; childcare costs; federal support for childcare programs; and federal subsidies for childcare.

Cost of S. 1878

A CBO cost estimate is unavailable.

Additional Info

In-Depth: Sen. Elizabeth Warren (D-MA), a candidate for the 2020 Democratic presidential nomination, introduced this bill to provide millions of American families with free-high-quality childcare and early earning options and ensure that every family in the country can affordably access these services:

"In the wealthiest nation in the history of the world, high-quality childcare should be a right for all of our children and not just a privilege that only the wealthiest families can afford. We need a government that invests in our children because they are our future and that is what the Universal Child Care and Early Learning Act will do."

In a 2017 speech at the National Women’s Law Center (NWLC), Sen. Warren delivered a speech in which she spoke about her experience as a mother juggling school, work and raising her two young children. In that speech, she spoke about her 78-year-old Aunt Bee, who helped raise her children for 16 years, and the urgent need for the government to help lower the cost of childcare and invest in U.S. children:

“[T]here are still plenty of obstacles facing working women, especially women with young children. And the challenge of finding reliable, affordable child care is a huge boulder firmly wedged between women and a million opportunities… Tens of millions of families, ordinary, hard-working families, simply don't have enough money to make it to the end of the month. I'm not talking about enough money for fancy vacations or a new pair of sneakers. I'm talking about families don't have enough money for housing and food and transportation. They don't have enough money to cover health care and education. And on top of all that, they don't have enough money for the child care they need so they can go to work and try to make some more money. Over the past generation, from 1970 to 2015, wages have effectively remained flat, while the costs of all kinds of basic expenses have gone up… [The cost of child care] has gone up nearly 1,000 percent... In nearly half of all states in America, child care costs are higher than the cost of in-state public college tuition. That is a giant boulder that rolls across right in front of working women and families all across this country. And for single parents and for parents working near the bottom of the income scale, the cost of child care often stretches families' paychecks past the breaking point. Think about the consequences of these skyrocketing child care costs. Today, about two-thirds of mothers of small children have jobs. That's millions of mamas scrambling to make sure that someone is taking care of the baby while they head off to work. High child care costs limit career opportunities for those women, especially for single moms. They put economic pressures on families by making it tougher to save money for retirement or for a home. And they force families to make difficult compromises on the quality of the care that they can afford. There is a lot of research showing that high-quality early education helps kids succeed in school and helps them do better in life. It can be a powerful tool to close the achievement gap. But skyrocketing costs often mean that families have to settle for lower-quality care.”

Rep. Deb Haaland (D-NM), who is the sponsor of this bill’s House version, adds:

“Childcare and early learning should not be a luxury that only people with money have access to, but right now that’s the status quo in this country. I know what it’s like to struggle to make ends meet as a parent – I cleaned at my daughters’ pre-school so she could have early learning opportunities – that’s not who we should be as a country. If we’re going to get serious about ending the cycle of poverty in New Mexico and the entire country, we need to invest in universal childcare and early learning. The bill Senator Warren and I are introducing today is a bold and comprehensive proposal to remove barriers so moms and dads can take those extra classes at the university or community college, or work to get that promotion without the burden of childcare on their shoulders while ensuring children have the care they need early in life.”

ZERO TO THREE, an organization that works to ensure all babies and toddlers benefit form the family and community connections that are needed for their well-being and development, supports this bill. Its Chief Policy Officer, Myra Jones-Taylor, says:

“ZERO TO THREE applauds Senator Warren (D-Mass.) and Representative Haaland (D-N.M.) for introducing the Universal Child Care and Early Learning Act of 2019, bringing this critical issue to the forefront of the national discussion and increasing the drumbeat for solving the child care crisis for working families across the country. Currently, only 4.2 percent of infants and toddlers from families with low- and moderate-incomes receive direct assistance for child care from federal programs in partnership with states. The Universal Child Care and Early Learning Act recognizes that all families, regardless of income, need support to access and afford high-quality child care and would help ensure that no family pays more than they can afford. This legislation also acknowledges the importance of a highly-trained, qualified and diverse workforce by proposing training and educational supports, while ensuring that early childhood educators are paid at a rate comparable to other educators with similar qualifications and responsibilities.”

Reihan Salam, president of the Manhattan Institute, criticizes this bill in an article for The Atlantic, arguing that it’s both costly and contrary to Sen. Warren’s previous positions:

“Senator Elizabeth Warren’s call for a new federal child-care program is nothing if not shrewd... But it’s also an object lesson in the unseriousness of how we think about social policy. Instead of just helping working families, her proposal risks increasing the federal deficit, driving up the cost of child care, and squeezing stay-at-home parents. And that last risk is one Warren should understand particularly well because she made her reputation as a public intellectual by warning against it. There is no question that a lack of affordable child care is a thorny problem facing almost all working parents, especially those who can’t rely on extended family members or other informal arrangements to meet their needs. This is true not only for low-income families, for whom access to affordable child care can be a matter of economic survival, but also for a not-inconsiderable number of affluent professionals, not least those residing in high-cost cities, where well-intentioned licensing and training requirements can combine with labor and land costs to render even rather spartan day-care options prohibitively expensive. With this bleak landscape very much in mind, Warren proposes that households earning 200 percent of the federal poverty line would pay absolutely nothing for child care, and that those earning more than that would have their fees limited to no more than 7 percent of their income. Given that many high-income households pay many multiples of that amount for child care now, this would be nothing short of a bonanza for them, assuming the child care in question is as high-quality as advertised. Yet this is where our brows should start furrowing. If costs are capped at 7 percent of household income for better-off families, what reason would they have to shop around, and what reason would the new day-care facilities that would surely spring up to take advantage of this new federal program have to contain their costs? As far as their customers are concerned, any expenditures that push the underlying cost of providing day care above the 7 percent of their income they’d be obliged to pay would be of no interest—indeed, they’re to be encouraged, insofar as they contribute to a more salubrious day-care experience for their kids. One assumes that the federal government would eventually seek to impose various cost-control mechanisms to keep its spending on the program from spiraling upward, as it has in the case of Medicare. In principle, the federal government could do some good by, say, voiding burdensome state and local regulations that contribute to high and rising child-care costs, though of course the federal government could presumably take such bold action now if lawmakers were so inclined, and at minimal budgetary cost. But if we’ve learned anything from efforts to control rising Medicare expenditures, it is that providers that come to depend on government largesse can do an awfully good job of extracting more of it over time, especially when the populations they’re serving are sympathetic. Lawmakers are notably reluctant to strip benefits from the elderly population served by Medicare, and it’s not a stretch to assume that they’d feel much the same way about the small children who’ve been signed up for federally subsidized day care, and more precisely, about their loving parents.”

Salam also argues that costs aside, proposals akin to this one have been unsuccessful elsewhere:

“[I]magine for a moment that Warren’s federal child-care program could indeed be paid for, and that fretting over cost control is a hateful exercise. Even then, there would still be reason to tread lightly. In the late 1990s, the Canadian province of Quebec embarked on an eerily familiar experiment. To better the lives of parents and children alike, its government offered heavily subsidized child care at an out-of-pocket price of $5 a day. In short order, Quebec families flocked to the new program, including many who had previously relied on more informal child-care arrangements. The results were, on one level, a great success. Labor-force participation surged among mothers in the province, which was one of the Quebec policy’s chief objectives. As the economists Michael Baker, Jonathan Gruber, and Kevin Milligan have found, however, the outcomes for the children enrolled in the program were less encouraging. In a 2015 working paper, they reported that the Quebec policy appeared to have had ‘a lasting negative impact on the non-cognitive skills of exposed children,’ one that was particularly pronounced among boys. Needless to say, the findings of Baker et al. are hardly the last word on the subject, and it is certainly possible that a federal child-care program in the United States would yield far superior results, perhaps by drawing on some of the lessons of the Quebec experience. But we can’t dismiss the results of the Quebec policy as the result of negligence or incompetence. Its designers were serious, thoughtful people who wanted to do right by Quebec families, yet their experiment had decidedly mixed results. It would be foolish to discount the possibility that the same might happen south of the border.”

Finally, Salam argues that this proposal wouldn’t do anything for stay-at-home parents:

“Warren’s proposed federal child-care program would do nothing for stay-at-home mothers and fathers. Indeed, the sheer size of the benefit is such that it would nudge many parents who’d otherwise prefer to devote all of their time and energy to raising their children into the workforce. Apart from the fact that this would mean privileging one normative conception of family life over another, a controversial proposition in itself, another danger lurks. By boosting parental labor-force participation, a federal child-care program along these lines could boost household incomes (a good thing), which in turn could drive up home prices in neighborhoods with high-quality schools (a less good thing), thereby setting off a series of frenzied bidding wars’ that compel all two-parent families to become two-earner families, whether they want to or not. Or at least that’s what Warren and her daughter, Amelia Warren Tyagi, argued in their provocative book The Two-Income Trap, published in 2003. At the time, Warren was a professor at Harvard Law School known for her deep interest in the financial fragility of middle-income families and, unusually for academics of her stature, for her heterodox political sensibilities, which blended economic populism with a culturally conservative streak. Judging by her child-care proposal, that Warren has been replaced by someone else entirely.”

Sen. Patty Murray (D-WA), who partnered with Rep. Bobby Scott (D-VA) to introduce the Child Care for Working Families Act to expand federal subsidies for childcare earlier this year and ensure that families earning less than 150% of their states’ median income spend no more than 7% of their incomes on childcare, argues that using the existing childcare system is preferable to creating an entirely new system.

The Century Foundation disagrees with Sen. Murray’s assessment. It argues that “the expansion of tax credits does not support families who cannot afford the up-front costs of care, nor are tax credits an effective mechanism for improving childcare worker wages or the quality of the care.”

This legislation has three Democratic Senate cosponsors. Its House companion, sponsored by Rep. Deb Haaland (D-NM), has 20 Democratic House cosponsors.

This legislation has the support of a range of academics (including James Heckman, a Nobel Laureate economist who has extensively studied the returns on public investments in high-quality early childhood education, and the Georgetown Center on Poverty and Inequality’s Indivar Dutta-Gupta), labor unions (such as the American Federation of State, County and Municipal Employees and American Federation of Teachers), advocacy organizations (including the National Women’s Law Center) and the childcare research group ZERO TO THREE.

Multiple candidates for the Democratic Party’s 2020 presidential nomination have released plans providing for childcare or universal preschool. Sen. Warren, Sen. Kamala Harris (D-CA), former Rep. Beto O’Rourke, Sen. Bernie Sanders (I-VT), former candidate Rep. Eric Swalwell (D-CA) (who has since dropped out of the race) and Sen. Amy Klobuchar (D-MN) all expressed support for universal childcare in July 2019 statements to Vox. Meanwhile, five other candidates — Sens. Michael Bennet (D-CO) and Kirsten Gillibrand (D-NY), South Bend Mayor Pete Buttigeig, Rep. Seth Moulton (D-MA) and Marianne Williamson — expressed support for tax credits for childcare.

In its childcare proposal, the Family Fun Pack, the People’s Policy Project, a new liberal think tank, proposes giving all Americans access to free childcare regardless of household income. This proposal would also offer a childcare subsidy to parents who choose to stay at home with their children — an element that Sen. Warren’s proposal doesn’t have, even though she wrote about this idea in her 2004 book :

“Day-care subsidies offer no help for families with a stay-at-home mother. In fact, such subsidies would make things more difficult for these families because they would create yet another comparative disadvantage for single-income families. ... In effect, government-subsidized day care would add one more indirect pressure on mothers to join the workforce.”

In , Sen. Warren suggested pairing day care subsidies with tax credits for stay-at-home parents — which, as an idea, shares some similarities with the People’s Policy Project proposal. When asked about the discrepancy between that suggestion and the current legislation, a spokesperson for Sen. Warren said, “We’ve not ruled [payments to families footing the bill for childcare or with stay at home parents] out, and we’re not saying we oppose it, but we don’t think it’s necessary to be consistent with Sen. Warren’s previous writing on this.”

In its 2020 budget proposal, the Trump White House proposed a one-time $1 billion investment to increase the supply of childcare to underserved populations. Under the White House’s proposal, states would apply for funding, which they’d use to encourage employers to invest in childcare or support childcare providers operating during nontraditional work hours or catering to parents enrolled in school. Ivanka Trump, the architect of the proposal, explained, “We want to encourage innovation. We want to encourage the private sector to step up." However, as presidential budgets are viewed as policy statements and Democrats declared the White House’s 2020 budget a “nonstarter,” this proposal didn’t go anywhere.

Of Note: The Dept. of Defense (DOD) has a universal military childcare program that offers childcare to over 200,000 children of military families. The Pentagon’s program directly funds the majority of the cost of center and home-based childcare, and families contribute an affordable fee based on their income to cover the remainder (on average, this works out to 10% of their income). Nearly all the childcare centers are nationally accredited and the program has some of the highest quality standards and childcare worker wages of any childcare system in the United States.

Head Start/Early Head Start is a Johnson-era federal government program that works directly with local childcare providers across the country to provide childcare and early learning opportunities for low-income children in a way that best meets local communities’ needs. Head Start and Early Head Start are praised for focusing on children’s holistic developmental needs, including health and social services; however, according to Sen. Warren’s office, they currently only serve “a fraction of eligible children” due to chronic federal under-investment in these programs, which have waitlists in almost every state.

However, it’s also worth noting that Head Start’s critics contend that it’s a massive federal program spending billions of dollars on a “pipe dream” — namely, that the effects of poverty can be alleviated for a lifetime with just a few hours of classroom time starting at age four. And, in fact, there is some evidence that Head Start doesn’t work in the long term.

One long-term study of Head Start programs, the Head Start Impact Study, which began following Head Start enrollees in 2002 and stayed with them until third grade, found that all the academic advances Head Start enrollees had made during their Head Start year evaporated by by the third grade. Another Head Start study by the Obama administration’s Dept. of Health and Human Services, which looked at a nationally representative sample of 5,000 children who were randomly assigned to either a treatment (Head Start enrollment) or non-treatment (not enrolled in Head Start) group, found that children enrolled in Head Start were “essentially indistinguishable” from the control group of non-Head Start enrollees by the end of first grade.

Sen. Warren’s office contends that currently, “while federal child care tax credits can provide much-needed assistance to many middle-class families,” their non-refundable nature means they don’t provide any help to working-class families without a tax liability.”

This bill is inspired by the bipartisan Comprehensive Child Development Bill of 1971, which was vetoed by President Nixon and builds on the federal Head Start program and the Dept. of Defense’s (DOD) military childcare program. That piece of legislation, co-sponsored by Sen. Walter Mondale (D-MN) and Rep. John Brademas (D-IN) in their respective chambers, would have created federally-supported childcare and preschool programs as well as after-school care for older children, meals, medical treatment, dental checkups and counseling that would be made available to the poor at no cost and to everyone else on a sliding scale. It was budgeted at $2 billion dollars for the first year (equivalent to $11.5 billion dollars today, which works out to five times the 2012 federal budget for Head Start) and had the support of many organizations, including the League of Women Voters, American Home Economics Association, Parent Teacher Association, American Academy of Pediatrics and others. Former Vice President and Senator Walter Mondale recalls:

“There was an overwhelming consensus that this was a sensible, reasonable bill. We were close to getting something that would give young Americans in that situation a better chance.”

Ultimately, the Comprehensive Child Development Act passed both houses of Congress in 1971 but was vetoed by President Nixon in 1972. Nixon called it “a long leap into the dark” that would “commit the vast moral authority of the National Government to the side of communal approaches to child rearing over against the family-centered approach.”

Nixon’s final statements were influenced by Pat Buchanan, then a special aide to the president, who (TNR) reports was “[i]tching to escalate the nascent culture war.” In the service of this aim, Buchanan, TNR reports, “inserted his fevered imaginings into Nixon’s official message” even though most administration officials who opposed the bill wanted Nixon to say only that it’d be too expensive to administer.

In fact, it seems that Nixon had seriously considered signing the bill: he had requested two statements from his staff, one to sign and one to veto the act. Additionally, his administration had helped draft the bill. However, despite Nixon’s veto, the cause of universal childcare didn’t die. Later in 1972, female delegates to the 1972 Republican convention prevailed in adding a strong childcare plank to the party’s platform over Nixon’s objections.

Mondale and Brademas also regrouped and scaled their legislation’s ambitions back, removing the word “comprehensive” from the title and reducing its funding by 90%. The revised bill, the Child and Family Services Act, passed the Senate in 1973 but died in the House.

Finally, Mondale’s and Brademas’ attempt to pass childcare legislation through the Child and Family Services Act died for good in 1975, buried under an avalanche of angry letters against the idea of publicly-supported child care prompted by an anonymous flyer that circulated widely in Southern and Western churches. The flyer made what the TNR reports were “false and unhinged claims,” including that it’d be illegal for parents to make their children go to church or take out the trash and that children would have the right to sue their parents and organize labor unions. Most members of Congress received thousands of letters against the Child and Family Services Act recycling the anti-child care flyer’s claims.

In a 2016 NPR segment for the station’s series “Stretched,” which looked at the challenges facing working parents, host Ari Shapiro noted that the typical cost of full childcare exceeded the average cost of in-state college tuition. During the segment, Shapiro played a voice memo from a working mom from Tulsa, Oklahoma named Kate Barron-Alicante. She said, “day care costs are staggering and unexpected. They just sort of hit you, and there is no financial aid for day care like there is for college.”

Sen. Warren’s office notes that although wages have effectively remained flat over the past generation, childcare costs have “skyrocketed,” such that low-income parents spend over 17% of their income to access childcare for children ages 0-5. The Economic Policy Institute, a nonprofit think tank, the cost of infant care annually can range from $4,822 (in Mississippi, where the median family income is $44,717) to $22,631 (in Washington, D.C., where the median family income is $63,587).

However, childcare providers can’t reduce prices any lower than they currently are because their largest expense — childcare worker wages — is already at its lowest point (the average yearly income for childcare workers is under $23,760 a year).

Due to these dynamics, the Committee for Economic Development concluded in 2015 that “only a third of families in this country are able to send their children to center or home-based child care, and a disproportionate number of working-class families rely on relatives or others, or have no arrangement at all.”

In its analysis of this bill, Moody’s Analytics found that it would substantially increase the number of children able to receive formal childcare from 6.8 million children (about 33% of the under-five population) today to 12 million (60% of the under-five population). Of the remaining 40% of students, Moody’s estimated, 30% would be cared for by parents or relatives and only 10% would have no regular childcare arrangement (down by about 20% from the nearly one-third of children under five who lack regular childcare today). Of those receiving formal care, 8.8 million children from families below 200% of the federal poverty line would receive free childcare; and the typical American family currently paying for formal care for young children would see a 17% decline in costs, bringing annual childcare costs down to less than $6,000 a year.

After factoring in both short- and long-term economic lifts from this program, Moody’s concluded that it’s a solid piece of legislation:

“The cost of high-quality child care is a heavy burden on the finances of American families and the economy. In many parts of the country, high-quality child care is not even available. The Universal Child Care and Early Learning Act addresses this serious problem. It is fiscally responsible proposal that would scale up federal child- care programs that are already in place and shown to be effective in meeting the challenges of providing high-quality child care. The proposal significantly reduces the cost burden of child care for most families, improves the quality of child care, enhances childhood development, and supports in- creased labor force participation and stronger economic growth.”

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