A Promising Republican Approach to Child-Care Policy

L ast week, Democrats on the Senate Health, Education, Labor, and Pensions Committee hosted four handpicked witnesses at a hearing on child-care policy. Their prescription largely boiled down to a restatement of the grand vision of the “Build Back Better” spending package — that the federal government should enact an individual entitlement to child-care assistance, spending hundreds of billions of dollars to fix a broken market.

It shouldn’t be surprising that professional child-care advocates and workers want to see massive federal investment in their sector of the economy. But someone should inform congressional Democrats that Build Back Better is dead, and that any reconciliation package is highly unlikely to include the massive policy sea change for which they were hoping.

Especially in a time of economic uncertainty marked by rising inflation and ongoing supply-chain disruptions, any pro-parent agenda should aim to make the market for child care work better. Progressives’ inability to let go of their big dreams has left the door open for conservatives to lead the way in expanding parents’ choices, and Senate Republicans are starting to seize that chance: A new reauthorization of the Child Care and Development Block Grant (CCDBG) introduced last week by Senators Tim Scott (R., S.C.) and Richard Burr (R., N.C.) would apply the principles of pluralism and parental choice in a welcome way.

CCDBG is the federal government’s main means of helping low-income parents pay for child care. After the welfare-reform package of the mid 1990s conditioned most federal child-care assistance on work, many single moms entered the labor force, and CCDBG funds became the key funding stream to states to help low-income parents afford care:

In 2018, CCDBG assistance went to an estimated 1.9 million children — about 15 percent of those eligible based on their parents’ income. Because such assistance is given to states in block-grant form, the program’s administration varies from state to state, though most states operate a voucher-based system that allows parents their choice of child-care provider, including a religious institution if desired.

CCDBG funding has its flaws — an Obama-era reauthorization of the program required states to set aside 12 percent of the money they received for so-called “quality improvements,” which siphons off dollars that would otherwise go directly to helping parents; the amount paid out by the feds tends to fall short of the actual cost of care; and certain technical aspects of CCDBG can hamstring states’ ability to innovate. But overall, the program remains a sensible vehicle for helping low-income parents afford the cost of child care. As Republicans pointed out, correctly, during debates over Build Back Better, many working-class families wish they could have a parent stay home, which is a problem that a Child Tax Credit expansion or other attempts to lower the cost of living could address. But low-income single parents, especially, rely on child care to hold down a job and make ends meet.

CCDBG funds, when administered through a voucher, give working parents more choice of child-care provider. The Scott–Burr bill recognizes the strength of that approach and leans into the idea of expanding choices for parents. The bill takes pains to emphasize a “mixed delivery” approach to child-care provision, which is to say one that recognizes the importance of having a diversity of providers, approaches, curricula, and frameworks. Instead of treating child-care providers as, essentially, functionaries of the state, this mixed-delivery approach would affirmatively place pluralism at the heart of federal child-care policy — a major win for American families.

The bill would offer technical assistance to community-run and home-based child-care centers, to make sure that they know how to access state subsidies. It would give states a chance to experiment with new apprenticeship or training models to allow child-care firms to attract new workers. It would allow for states to give grant money to smaller providers for the purposes of building capacity. It would permit states more freedom in setting rates for providers while specifically barring a top-down, D.C.-dictated approach to rate-setting. And it would encourage states to review the existing regulatory burdens they place on child-care providers, which are often overlapping and outdated and raise the marginal cost of providing care, preventing new firms from entering the market.

Though the bill takes improving child-care options seriously, it’s not perfect.

For one thing, it would nudge a program aimed at low-income workers into affecting the middle-class, by setting permissible child-care co-pays at a maximum of 7 percent of income for someone making 150 percent of their state’s median income (SMI). This means, for example, that a family of four in Colorado making $151,000 that got access to a CCDBG voucher would have its out-of-pocket child-care costs capped at $10,800 (states would have to give first preference to those making under 85 percent of SMI). The result would be great for those lucky enough to get access to a voucher, but it would also lay the groundwork for a dangerous expansion of CCDBG subsidies later. The reauthorization should keep the focus on workers making under the state medium income.

For another, while the bill would break important new ground on capacity-building grants to child-care providers, more work would still need to be done in thinking about how best to buttress faith-based providers without running into tricky religious-freedom issues. And the bill could also could go further in giving states more flexibility, particularly on meeting CCDBG “quality improvement” metrics.

All that said, as a good-faith engagement with the question of how best to expand options for parents who rely on child care to help make ends meet, the Scott–Burr proposal is a welcome addition to the fray.

It’s easy to see why Democrats with big dreams would balk at solely focusing on strengthening CCDBG: Targeting child-care assistance at those making less than the median income doesn’t earn them any approval from their base of college-educated urban professionals. But a parent-first agenda should include making the market for child care work better, while at the same time not putting an undue federal thumb on the scale that balances Americans’ work lives against their home lives.

During the battles over Build Back Better, Republicans were quick to point out that a massive infusion of government funding for new universal-child-care and pre-K entitlements would disproportionately favor households with two workers at the expense of families that prefer to keep one parent at home. By improving CCDBG, keeping it focused on low-income workers, and including some supply-side boosts to help the market function better, Republicans can demonstrate a clear commitment to making parents’ lives easier. Paired with a child benefit or other support for families, the Scott–Burr plan could be a real first step toward proving that the GOP is serious about becoming the party of parents.