Episode 5: What’s the true cost of child care reform? Change v. the status quo Episode 5: What’s the true cost of child care reform? Change v. the status quo

Runtime: 24:52 — The nation’s child care system has been in a steady, under-the-radar crisis for decades. This doesn’t just affect kids and parents, it’s a drag on the entire economy. But experts say now may be the best chance in years to fix this broken system.

Overview Overview

It’s been 50 years since the last bill that would have created a universal child care system passed Congress, and it was killed by a presidential veto. Now, decades later, the sector has something it hasn’t had in a while: momentum.

Polling indicates people favor broad reform. Reform is also increasingly seen as crucial to larger efforts to reduce longstanding racial and economic inequities. And people agree the pandemic has shown how essential child care is to the workforce.

In this episode, we’ll explore how agreeing reform is needed isn’t the same as agreeing on what it should look like. There are major philosophical differences. Can government be trusted to be both effective and efficient? Are the funds best directed at parents? And will a price tag in the hundreds of billions kill any new efforts in Congress before they start?

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Transcript Transcript


Something is very different these days in the push for child care reform. It’s got momentum.

Recent polls indicate strong public support for national reform.

The Biden administration has proposed a plan that would – among other things – ensure no family spends more than 7 percent of their income on child care.

And advocates say the pandemic has really opened eyes about how vulnerable and essential the child care system is.

Boston Fed President Eric Rosengren thinks right now is the best window for reform in decades.


What the pandemic has done is shown very clearly what the cost of not having quality child care is in the country. And, so, I think this is probably the best time that I've seen in the last 20 or 30 years for making the argument and arguing that there is a public good to having child care. It helps not only the parents, it helps the children, and it helps society more generally, and we need to continue to push that in order to make it happen.


But as we’ve noted this season, it’s been quite a while since any kind of comprehensive national reform was on the table in the U.S. There’s been plenty of action, but it’s mostly been at the state level.

Nationally, several pieces of legislation have been introduced. But it’s been 50 years since the last bill that would have created a universal child care system passed Congress, and it was killed by a veto by President Richard Nixon. He cited concerns about what he called “communal approaches to child rearing.”

Historian Nancy Cohen notes that nothing of a similar scope has neared passage since.


We're still 50 years later waiting for this essential program that pretty much every other advanced democracy in the world already has and has had it for decades.


One difference between now and then is that a majority of people, on both sides of the political spectrum, seem to favor some kind of broad reform. And reform is also increasingly seen as crucial to larger efforts to reduce longstanding racial and economic inequities.

Of course, agreeing reform is needed isn’t the same as agreeing on what it should look like. There are major philosophical differences.

For instance, should the money go primarily to expanding the current system – a kind of extension of our K through 12 system?
Should it be directed more toward enabling parents to be caregivers, in the form of tax subsidies or the paid parental leave that exists in numerous other countries globally?

Or is that a false choice?

The price tag is also a huge issue. For instance, the estimated cost of Biden’s child care plan is $225 billion. There’s a limited appetite for committing that kind of money. Here’s North Carolina Congresswoman Virginia Foxx:


People when they think about, quote, federal dollars, they think it's manna from heaven. And they honestly don't understand where that money comes from. What we're doing is taking that money out of the private sector. And, so, I want to be very careful that we don't just throw money at a situation without making sure it's being spent as well as it can be spent.


This is Six Hundred Atlantic, a podcast produced by the Federal Reserve Bank of Boston. I’m your host, Jay Lindsay.

We’re looking at child care in the U.S., and in this final episode of the season, we’re focusing on the sector’s future.

What’s more likely to be coming – significant reform or more of the same? What should any reform look like? And what are the consequences of doing nothing?

Child care advocates say inaction can’t be an option. They stay the status quo hurts working parents, hinders child development, and fosters existing inequities.

Connecticut Congresswoman Rosa DeLauro says the federal government should act, and she hopes it soon will.

She says our flawed child care system has already done too much damage to the economy, to children, and to women in the workplace.


It's my hope that we'll be there. I can't guarantee that it will, but nevertheless I believe we will get to a different outcome than we have had on child care, where it becomes central to our economy.


As we look ahead, it’s worth a glance back at 1971, when publicly funded universal child care was as close to reality as it’s ever been. Some see lessons in that near-miss.

Things were different, then. For instance, the standard 9-to-5 work day was more common. Today, a similar bill would have to cover care for the workers with non-traditional hours who are so important in our shifting economy. Still, this plan from 1971 was sweeping and ambitious.

The bill was called the Comprehensive Child Development Act. It would have established a national network of child care centers – open to all families – that provided education, food, and medical services.

In his memoirs, Senator Walter Mondale, the bill’s Democratic sponsor, recalled his reaction after the painstakingly crafted legislation passed Congress on a bipartisan vote.

He thought, “All right, we’ve cracked this.”

President Nixon’s veto came about a month later.

Nixon condemned the bill as a massive, communist-style overreach into child rearing. But Cohen says Nixon was so conflicted, he ordered two messages prepared, one for a signing, the other for a veto.


So, it shows you that this is really a transitional moment where it really could have gone any way.


Cohen says one weakness child care advocates faced then was tepid public support. People generally didn’t favor mothers working outside the home, or the changes that would enable it.

But she adds a real strength was an inclusive approach. The bill united a range of special interest groups willing to compromise to get it done.

Feminists and Black racial justice advocates backed the bill because they believed it would create opportunities for all women, including women of color. Labor unions backed the bill and the jobs it promised. Legislators from both parties made sure its benefits were available on a sliding fee scale to families at all income levels, so the bill couldn’t be dismissed as a welfare program.

Cohen says that kind of pragmatism is rare today.


We see this on all sides of the political spectrum is people want to push their own interests, their own identity group. And in such a diverse country, you're not going to get major national legislation taking that route. I mean, and this applies to really anything, if you get too wrapped up in the perfect, you sacrifice everything.


Child care advocates frequently point out that publicly funded universal child care is standard around the world.

In England, for instance, most parents can now receive up to 30 hours of free child care a week at a child care facility. And Sweden, Finland, Germany, Estonia, Hungary, and Latvia are just a few of the countries where mothers have long gotten at least six months of paid leave after having a baby.

The U.S. doesn’t have these benefits. But we have recently seen some different visions for how change could happen.

The Biden approach calls for a $15 per hour minimum wage for child care workers, and it would use sliding-scale subsidies to limit the amount a family pays for child care to 7 percent of their income.

The plan would offer various options for care, from child care centers to family care providers. And a separate paid leave proposal by Biden aims to provide workers partial pay replacement so they can take more time off to bond with a new child.

Senator Elizabeth Warren released a plan during her failed bid for the Democratic presidential nomination. It would have created a national network of government-subsidized and regulated child care facilities. It also would have capped costs at 7 percent of a family’s income and been free for families making up to 200 percent of the federal poverty level.

Carrie Lukas is president of the Independent Women’s Forum, a women’s issues policy group. She says over the years she’s come to see a basic split between Republicans and Democrats, when it comes to child care:

Republicans tend to want public dollars directed at parents, to use on whatever arrangements they choose, including subsidizing a decision to stay home and provide their own care.

She sees Democrats as more likely to have faith in government and direct money at government systems, like with Warren’s plan.

Lukas says that as someone who favors smaller government, she’s just not interested in funding new government programs, with huge overhead and new bureaucracies.


There's a lot of people who now have more flexible jobs and can kind of make their work world what they want of it, which means kind of making a child care system with a tremendous overhead of a public school, and a bureaucracy of the public school system, would just be making a system to serve a bygone era. Parents deserve to have some more support, especially those who are struggling should get more financial help, but, man, I don't want us to lock in this idea of having these huge institutions that become, again, like the public schools, kind of a jobs program or an end into themselves. You want to have it so they're really focused on serving the parents needs and their families’ needs, not the bureaucracy's needs.


University of Maryland professor Corey Shdaimah, co-author of “In Our Hands: The Struggle for U.S. Child Care Policy,” says there’s actually a lot of good reasons to trust government to do the job on child care.

She says government delivers things we take for granted all the time, like safe roads, trash collection, and clean water.

But she adds that, like Lukas, she’s also not interested in a particular, inflexible, government-focused kind of child care that doesn’t consider what parents want.


So, for me, I think having government involved in various ways, it could be through tax credits, it could be through subsidies, it could be through the provision of child care for those who want it just like we provide K–12 education, right? Not disallowing people to send their kids to religious schools or homeschool but providing education for everybody if they want it. But that would not necessarily dictate or require any particular kind of child care. That was never contemplated.


Whatever solutions are proposed, there’s no escaping the cost. We mentioned that Biden says his plan would cost $225 billion, and the estimated cost of Warren’s plan was $700 billion over 10 years.

No one pretends high-quality child care can be done on the cheap, and the cost is well out of the reach of private philanthropy. Taxpayers will need to be convinced to pay for it.

Congresswoman DeLauro says the costs may be significant, but the price of inaction is greater.


What is the cost of not doing it? What is the loss to the economy? What is the loss to the education level of our kids, to their health, their ability to succeed? You have to weigh the cost.


But Representative Foxx says there’s good reason to doubt expensive and federally administered child care solutions will be well managed and the money well spent.


If I had my druthers, whatever government help would be given to parents for child care would be done at the local and state level. And you wouldn't be taking money to the federal level, laundering it – let's just face it, the federal government takes a lot out for bureaucracy – and then deciding what the priorities are for sending it back.


Foxx said a local focus on child care funding and reform would also encourage greater and sorely needed spending accountability.


In everything I've done I've tried to say, okay, if I'm going to ask relatives of mine who live in 40-year-old single-wide trailers at the end of a dirt road who have worked hard their lives, paid their taxes, done everything they're supposed to do. If I'm going to ask those people to give more money to us here in Washington to spend, can I tell them that I'm spending their money better than they could spend their money?


U.S. Census Bureau economist Misty Heggeness, who studies the economics of child care, says the cost of comprehensive child care reform should be framed as an investment, because that’s what it is.


I really think that there's no way in which we would understate the importance of this. We need to think smart about investments that we make as a society and investing in the child care market is one of the most critical investments and potentially smarter investments that we could make. Because the cost of supporting a healthy child care market today is not nearly as much as the cost of lost wages and lost employees from now into the future.


Some child care advocates think it might help if policymakers don’t try to take on every piece of reform all at once.

For instance, infant and toddler care is the most expensive and financially challenging part of any program. That’s because more staff are required to care for younger children. Why not focus on fixing infant and toddler care first?

Boston Fed President Eric Rosengren said taking a gradual approach also avoids a more massive, immediate budgetary impact.


So, there are a number of ways that you could do this, so that you're not immediately paying for child care for everybody right away. It would be better if we could afford to provide comprehensive child care, but there's certainly ways that you could do it more incrementally that would still make a big difference.


Whatever happens in child care reform, it will eventually need to happen in Congress. And Representatives Foxx and DeLauro have different views about what’s possible there right now.

Foxx said the size of the $1.9 trillion COVID-19 relief bill signed earlier this year, plus rising gas prices and talk of a tax increase, make it too tough a climate to pass costly child care reform.


I don't see anything on the horizon. I don't want to be pessimistic, but I don't see anything on the horizon that is going to solve this problem right now. Working people are being hit from every angle right now and I'm truly concerned with where we are. And I just don't know how much more the public can withstand. We don't have an election until 2022 and I'm not sure we're going to have answers to how the public is going to respond to this for a while.


DeLauro sees more possibilities. She says she’s encouraged by the speed with which long-ignored problems in child care have become relevant following the pandemic.


So, I'm always optimistic. There's an understanding that now many, many, many years ago when women were not really as much a part of the workforce as they are or have been now, there wasn't even a discussion about this. Now, it’s at the center of a public discourse. So, I'm optimistic that we can achieve what we would like to in this regard.


Child care advocates say, this time, real reform really has to happen.

Boston Fed researcher Sarah Savage, a child care expert, says even if the sector fully recovers from the hit it took from COVID-19, a return to the pre-pandemic status quo isn’t acceptable. She says that’s just a return to living with the problems that come with a compromised sector that often can’t do its job well.


I think that it is struggling, and it has been struggling, and the parents that use it are often struggling. We have this service that could be so supportive, and it's not, so I just don't consider its current state as one that I would consider surviving, in any healthy sense of the word.


Savage’s colleague Beth Mattingly, an assistant vice president at the Bank, says building a stronger child care system is an absolutely essential piece of building a more equitable society.


I think if I could fix one thing to address inequality, it would be early care, early education.


That’s because accessible and high-quality care has two critical benefits. It allows parents to work and maximize whatever economic opportunities are available to them. Those jobs, that higher income, boosts both workers and their families.

It can also really enhance a child’s development, though just getting care isn’t enough.

Say a parent can only afford lower quality care – they might forego it altogether. That could mean working less, or even leaving the workforce. Or if they stay in low-quality care, it could harm their child’s development.

Mattingly says that’s why early care must be high-quality care for it to truly make a difference.


We know what happens in those zero to three years sets the stage for the trajectory of brain development and cognitive growth throughout the life course. And, so, if we cannot recuperate those losses in many ways, if the brain doesn't develop to its fullest potential in those early years, we have a loss that we're operating with. There are ways to address, ways to mitigate, and we absolutely should, but it's the difference between preventing someone from falling in the river versus pulling them out of the river. And I'd far rather prevent them from falling in.


Mattingly adds she’s determined to believe better days are ahead for the child care sector, even if she’s forced to keep waiting for them.


This issue is so important for our society. It's important at so many levels – for children, for families, for workers, for employers, for the economy – that I can't let the frustration bog me down.


While there’s a lot of uncertainty for child care advocates about what could be, some find hope in a program that actually exists.

Adelphi University professor Elizabeth Palley is co-author of “In Our Hands: The Struggle for U.S. Child Care Policy.” She notes there is a federally funded program that offers high-quality, affordable, flexible child care all over the country.

It’s the U.S. military.

The Department of Defense oversees 800 child care centers on military bases globally, including some centers that are open around the clock.
Each military branch also operates a home-based child care provider program. These host smaller numbers of children than a traditional child care center.

The military’s programs are not immune from some of the problems found in the broader child care market. For instance, months-long waiting lists can make child care unavailable for military spouses who need the care in order to work.

But Palley says overall it’s a well-designed program, and it recognizes how important high-quality child care is for parents, as workers.


I think the reason they decided to fund high-quality care for military families was that, they didn't want the soldiers, basically, to be stressed about where their kids were, right? Because that can interfere with their ability to function as a soldier. So, there was a federal commitment made. So, I think we can do these things, it's choice. And priorities.


This episode concludes this season of Six Hundred Atlantic. Thank you for listening.

We called this season “A Private Crisis.” Our hope is that the struggles of the child care sector are a little less private, a little less under-the-radar, than when we started.

The Boston Fed has focused on child care for years precisely because it’s so important to our economy, and to our communities, and to where we’re all headed.

Please follow us as our researchers work to illuminate and bring insight to the challenges surrounding child care.

This is an issue that we hope won’t be “private” or a “crisis” for much longer.


Thanks for listening to Six Hundred Atlantic. Please check out all five episodes of our second season. You can find our first two seasons and subscribe to our mailing list at bostonfed.org/six-hundred-atlantic. Listen and subscribe to Six Hundred Atlantic on Apple Podcasts, Spotify, Stitcher, and TuneIn.

The producers would like to thank our contributors for their time and insights. They are Jess Carson, Julie Clark, Nancy Cohen, Rosa DeLauro, Virginia Foxx, Misty Heggeness, Aimee Hoffman, Chris Herbst, Erica Komisar, Aisha Losche, Carrie Lukas, Beth Mattingly, Jennifer Ng’andu, Elizabeth Palley, Annie Pettibone, Eric Rosengren, Sarah Savage, Corey Shdaimah, Essence Lee Souffrant, and Jennifer Washburn.

Six Hundred Atlantic is a Federal Reserve Bank of Boston podcast hosted by Jay Lindsay. Produced by Jay Lindsay, Jessica Gagne, and Peter Davis. Executive producers are Lucy Warsh and Heidi Furse. Recording by Steve Osemwenkhae and Jessica Gagne. Engineering by Steve Osemwenkhae and Jessica Gagne. Project managers are Allison Chase, Jennifer Afere, and Dulce Depina. Chief consultants are Beth Mattingly and Sarah Savage. The podcast is written by Jay Lindsay and edited by Beth Mattingly, Sarah Savage, Allison Chase, Jessica Gagne, and Nicolas Brancaleone. Graphics and website design by Meghan Smith and Stephen Greenstein. Production consultants are Mike Woeste, Cameron Doherty, and Will Collins.

This has been “A Private Crisis,” the second season of the Boston Fed’s Six Hundred Atlantic podcast.