A new Treasury Department report tells us what we already know: Child care costs are unaffordable for many families. In response to this, lawmakers have included $250 billion in child care subsidies in the $3.5 trillion spending bill currently under consideration.
While this effort might strike many Americans as a well-intended “hand up” to working parents, it comes with a significant downside, and not just the price tag to taxpayers. The most serious problem with government-funded child care is the downstream effect on the quality, variety, and independence of child care providers in today’s robust — although expensive — marketplace.
In other areas, government funding has proved to function like a Trojan horse. Colleges gladly welcome federal funding via student loans and Pell grants, while hospitals do the same for Medicare and Medicaid dollars. But these institutions, awash in government money, are now beholden to government rules, even if the rules aren’t to the benefit of students or patients.
In higher education, any school that receives federal funding — not just public colleges and universities — must comply with federal statutes and regulations (and even weaker “guidance” like “Dear Colleague” letters). This includes nearly all private colleges, too.
This means complying with Title IX, and not just the provisions that relate to giving women equal roster slots in sports. It means complying with whatever the current administration says about campus sexual assault, or what constitutes hate speech. Schools risk losing federal funding by challenging any federal rule, which is why they don’t do it. Government money has become the means for government control of higher education. Very few schools are able to provide student aid on their own, but they do it as a matter of principle, to maintain their independence.
Similarly, federal funding of health care has increased tremendously in recent years (but that isn’t going to stop lawmakers from including $1.1 trillion in new health care spending in this enormous spending bill). Alongside federal funding of health care, primarily through the Medicare program, federal control over patient care has increased. In order to participate in Medicare, doctors and hospitals have to follow a host of rules and requirements, including asking certain questions, performing certain tests, and even encouraging certain treatments.
Sometimes government meddling in health care, even when well-intended, can have disastrous effects: For years, Medicare included questions about pain management in their patient satisfaction surveys — which are linked to payment — and it’s easy to imagine how this fueled the opioid epidemic as providers faced greater pressure to patient-please by overprescribing.
Just as a small group of colleges refuses to accept government funding, so too a small contingent of doctors — about 1% — have opted out of Medicare. This frees them from compliance with the program (and its low and slow reimbursement system). But Medicare and Medicaid, which together insure more than one in three Americans, represent such a large market share, it’s hard for most doctors to even consider swearing them off.
Child care centers might be watching the current debate and salivating over the $25 billion that might help them expand or improve their facilities. Families with young children might be hoping for a $225 billion break on one of the largest line items in our personal budgets. But both providers and parents should be warned that when government offered fistfuls of cash for colleges and health care providers, they also ended up strong-arming them into compliance.
Child care should be the last place we invite politicians to meddle. Our youngest children should receive care based on their parents’ preferences, not based on what bureaucrats in Washington, D.C., decide they want kids taught. After all, state governments are already in charge of K-12 education, and we all find it hard enough to agree on what is best for those schools.
Importantly, neither the cost of college nor health care has become more affordable, even as government spending in these areas has skyrocketed. In fact, the opposite has happened. The subsidies are “captured” by middlemen rather than trickling down to the families who really need them, and prices continue to go up. The same would likely happen in child care.
If policymakers really wanted to help families with the cost of child care, they would put money directly into parents’ pockets through tax relief, so that we can determine what kind of care is best. We can direct those dollars to the providers we deem most deserving. And we can hold them directly accountable for the quality of care they provide without Washington wading in.