Senator Elizabeth Warren (D., Mass.) has a new plan to tax, spend, and regulate our way to affordable child care. It’s a bad deal for parents, children, and taxpayers.
Under the plan, the federal government would ensure that families making less than twice the poverty line had access, at no charge to them, to care for any children below school age. The “providers would be held to high national standards.” For people making above the limit, fees would be capped at 7 percent of income. Nobody would be stuck relying on Aunt Bee, as Warren was when her own children were young.
Whether there will be enough high-quality providers is unclear. The simultaneous tightening of regulatory standards and subsidization of customers, which is to say restriction of supply and boosting of demand, should send prices skyward. Warren anticipates $1 trillion in spending over a decade. But the expense is the least of the defects of this proposal.
Warren’s idea discriminates in favor of one type of arrangement for child care: commercial day care. Families where one parent stays home with young children — the arrangement that a majority of Americans, and a slightly larger majority of parents, prefer — would get nothing from the proposal, except, possibly, higher taxes. Ditto for families that prefer to rely on Aunt Bee. To the extent these families think day care is bad for children, they have some evidence on their side.
We can also expect Warren’s policy, over time, to yield ever more regulation and standardization. The government will not (as it should not) write a blank check to cover all child-care costs above 7 percent of an affluent family’s income; it will have to impose controls of some kind. Perhaps the result will be a tolerable blend of efficiency and child-friendliness. But there is room to doubt it.
The federal government places too large a share of the tax burden on parents. So there is a case for federal policies that ease the financial strain on them, especially by lowering their tax burden. The recent tax reform did so modestly. A further expansion of the child tax credit would enable parents to provide care for their children in the form they think best, which may include, for example, shifting one parent from full-time to part-time work. States and localities should review their regulations on child care, too, to see if some of them are unnecessarily raising costs for parents.
Warren’s proposal would be an expensive way to give parents something they mostly do not want, and in the process probably harm the next generation. Rarely does a presidential candidate devise a plan that so perfectly encapsulates her campaign.
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