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June 12, 2021
Following the announcement of the American Families Plan, many experts have debated the idea of subsidized child care.
“The idea of using subsidies to essentially engineer some sort of outcome is not exactly a great idea. Any time you end up subsidizing something that represents a market manipulation,” Jonathan Bydlak of the R Street Institute told Fox News. “There’s always a potential, as we’ve seen in areas like education, for example, where… education costs are almost certainly higher as a result of the ways in which we subsidize that system.” Experts are saying that this raise proposes spending $225 billion on child care generally.
The average cost of putting an infant in a child care center in California eats up an average 18% of household income. Bydlak states “That ultimately will be a manipulation of the market, and market participants will end up responding to that and responding to those changed incentives.” This could dramatically increase the price of child care in the future. Many have argued that years of government subsidies for college have raised the spending power of the average person for higher education, but not necessarily to their benefit. Colleges and universities have increased spending accordingly, resulting in the high tuition rates that exist today. The comparison between Biden’s child care subsidies and the massive subsidies for college tuition in the form of government grants and loans, Bydlak said, “is pretty similar and so is a reasonable one.”
The U.S. ranks among the lowest among the wealthiest nations that offer child care benefits and paid leave benefits, which also contributes to its ranking as one of the worst child poverty rates among developed nations. The White House Fact Sheet states this “President Biden’s American Families Plan will ensure low and middle-income families pay no more than 7 percent of their income on high-quality child care, which could end up saving the average family $14,800 per year on child care expenses.” This would mean that directly subsidizing the average family’s spending on child care can potentially make it harder to keep up with payments in the future.
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ARTICLE: ISABELLA FLORES
POLITICS EDITOR: CARSON CHOATE
PHOTO CREDITS: CENTER FOR AMERICAN PROGRESS