The High-Quality Child Care Tax Credit: Because, apparently, the US is rolling in money

The High-Quality Child Care Tax Credit: Because, apparently, the US is rolling in money September 3, 2015

This comes via the Washington Post’s Wonkblog, which tries to be data-heavy and, well, wonky, but sometimes leans much too far to the left for my taste.  Today they featured a proposal released by the Center for American Progress, labelled a model for the Democratic candidates, which aims to fund child care via subsidies in much the same way as Obamacare funds healthcare, with parent contributions ranging from 2% of pay at 133% of poverty line to 12% at 250% of poverty, with unspecified adjustments for more than one child.  This program would cover children from birth to age 3, and is intended to augment other proposals for universal preschool for 3s & 4s, and additional subsidies for childcare for before/after school and summers for these kids.  The total targeted annual benefit, inclusive of the parent contribution?  $14,000.

But here’s the kicker:  this isn’t your ordinary proposal for child care subsidies, because this pushes the notion of High Quality Child Care, and aims to establish, as a norm, center-based child care.  It’s as if Obamacare subsidized only “Gold” plans.  Only “top tier” programs are eligible for the subsidy — a parent couldn’t choose a provider from a lower tier, and pocket the cost differential.  In-home care is addressed through the notion that a home daycare provider could theoretically make the necessary improvements to qualify as a “top tier” provider, though this seems unlikely in practice, as the requirements are somewhat nebulous but among them is the requirement that the “students” be “taught” according to a “research-based curriculum.”  I would expect that all manner of requirements, and the paperwork to demonstrate compliance, would make it difficult indeed for in-home care to qualify as “top tier.”

What’s more, the system is designed to produce higher wages for childcare workers by including the workers’ pay as one of the metrics:

The High-Quality Child Care Tax Credit would address this problem [low wages] by supporting an average annual fulltime salary of $34,000. This translates to an hourly wage of about $16 per hour and would include a benefits package. States would also be required to incorporate wages into their QRIS [ the metric for identifying the top tier], with input from a broad range of stakeholders, including child care workers. This average is not intended to be a cap; staff members with higher credentials, more experience, and greater competency should earn progressively higher wages. Moreover, child care providers would agree to pay staff an annual salary, not on an hourly basis.

This pay boost, with benefits, makes the generous-seeming $14K likely insufficient to cover the costs.

And what about families who arrange with a relative (e.g., a grandmother) to care for their child?  This is to be phased out:

The CCDBG [block grants for poor families] will continue to support families who currently rely on relatives for child care, but children should transition to the High-Quality Child Care Tax Credit over time.

Now, some time ago, I had said that there was a certain reasonableness to government subsidies/tax credits for child care; so long as the amounts in question were lower than the “secondary worker’s” tax, if that subsidy encouraged that worker to work, instead of stay at home, it would be a net benefit for the government in terms of tax revenue gained.

But this is a different story altogether.  This is an effort to push all children out of the home and into childcare, and, what’s more, into institutional settings, and wholly discards the preferences of parents who want to avoid that, especially for infants.  (* Disclosure:  I had a negative experience with in-home care, and switched to a center — in both cases, only for part-time care, two or three days a week — but I have talked to parents who have been happy with the former, and believe that there are pluses and minuses to each.)

Oh, and the cost?  A claimed $40 billion per year (they don’t provide the assumptions that underlie the calculation).

So — on the one hand, this is the same sort of wish list we see over and over, just perhaps more fleshed out than in the past, with its notion of promoting high wages as well as low out-of-pocket costs to parents.  At the same time, it’s still vague in its definition of “high quality” — one suspects that this would be defined based on 1001 bureaucratic rules, from the number of required minutes of daily reading, to the healthfulness of the food, and other items that can be measured, rather than intangibles.

But at the same time, Wonkblog treats this as a likely part of the agenda of whichever candidate is the Democratic nominee, just as much as the Free College! plans.  And the notion that every child should be in a “classroom” from infancy, for the majority of his waking hours, is wrong, and it’s not just about whether a parent is the primary caregiver, but about the unnaturalness of the age-segregated classroom environment for very young children.

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