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The Case Against Federal Child Care Subsidies

Both Tim Walz and J.D. Vance agreed in last night’s debate that we need more federal support for child care programs. So naturally, they are both wrong.

Take two middle class couples with equal incomes and both parents working. Both mothers then have a child or two or more. In the first case, the mother (or the father) makes a financial sacrifice and quits her job and decides to take on the hard and often thankless work of being a stay-at-home mother. In the second case, both parents continue to work and put their kids in child care.

Under a federal child care program, the couple with now just one working parent pays taxes to support the family with two parents working. The family with two parents working gets a payment from the family with only one parent working.

How’s that fair?  EVERY study shows that families with dual incomes, have higher incomes than families with just one parent working.

We aren’t making any value judgments about whether children are better off with a stay-at-home parent or being placed in child care. We are pro-choice on this issue, and we understand that in many instances both parents have to work to make ends meet. What we are saying is that government policy should be neutral in this decision.

The liberal Urban Institute has a new report that shows federal child care and early education spending totaled just under $40 billion in 2023, and has more than doubled in real terms since 2015:

The best way to make everything from housing to child care more affordable is to create a booming economy with rising take-home pay. If we must subsidize child-rearing, the better solution is to scrap all childcare subsidies and have a means-tested child credit (as both candidates have proposed) that helps families with children whether they hire someone for child care or not.

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