The Washington Post has some preliminary details, with the final plan due next week. It’s $1.5 trillion in spending and tax credits, paid for by hiking taxes on high earners. It includes an extension of the $3,000-to-$3,600 “child allowance” the Democrats enacted in their stimulus bill, plus money for paid leave, child care, pre-K, and free tuition at community colleges.
The overall level of taxing and spending is a problem. We’re coming off a very expensive year, we’re still going bankrupt, and any tax hikes we pass to fund new programs now are tax hikes we can’t pass to shore up the existing deficit later.
On the specifics, the child allowance is controversial here on the right, as I’ve documented previously. It’s paid to parents whether they work or not, and thus risks re-creating the welfare system before the 1996 reform. But it also supports families raising children, which many conservatives are open to. I suggested a more gradual and careful way of creating a child allowance in this piece.
Paid leave and subsidized child care, meanwhile, share some problems with each other. The taxes used to fund these programs will not be optional, but the programs will be valuable only to parents who structure their work and family lives in specific ways — and the government should not be bribing us to structure our lives in one way instead of another. You might not want extensive paid leave if you’re a workaholic who wants to get back to the job, for example, or if your spouse stays home. Similarly, you might not need pre-K or child care if you have a stay-at-home spouse, or if you have an informal arrangement with a family member to watch the child.
These are difficult questions for families, and different answers are right in different situations, depending on parents’ personalities, their values, their earnings, their child-care options, and so on. I’ve taken a tour through most of them myself: My mom stayed home, my wife and I both worked full-time for several years after we started having kids, and now I watch the kids but also work part-time. Parents should evaluate the tradeoffs for themselves, rather than responding to artificial incentives created by government policy.
We should be removing these distortions in government programs — some of which work in the opposite way, subsidizing stay-at-home parents at the expense of working parents — instead of adding more. And if we want child care to be more affordable, we can trim up some questionable regulations rather than showering subsidies on the industry and the parents who use it.