Build Back Better Plan Could Significantly Raise Child Care Costs

A new study released by Casey Mulligan, a University of Chicago professor and former chief economist at the White House Council for Economic Affairs during the Trump administration, found that President Biden’s sweeping social safety net plan, Build Back Better (BBB), could raise childcare costs on middle class families as much as 122%.

The study says that a family with an infant and a four-year-old could potentially pay as much as $27,000 more in annual childcare costs. The findings run counter to President Biden’s promises that childcare costs would be more affordable under his plan.

Carrie Lukas, the president of the Independent Women’s Forum, is alarmed by the study’s results, saying, “The federal childcare and preschool proposal would be a disaster for American families. This latest report shows that the raft of new regulations would make it harder, not easier, for families to afford child care, leaving people with tens of thousands of dollars of higher bills.”

Lukas has good reason to be concerned if the study’s findings come to fruition. According to The Daily Mail, Mulligan “estimates that by removing financial incentives to offer low-cost care and increasing regulations, the cost of daycare could surge” for many families, rising to levels between $20,000 and $30,000.  Mulligan calls these high prices akin to an annual tax on middle-income families, in his recently published editorial in the Wall Street Journal, outlining how Biden’s plan “proposes to reinvent child care with cost-increasing forces.”

Furthermore, Biden’s plan “would also cap, by statute, child care expenses,” causing reductions in incentives to offer prices lower than the federal cap, and state programs would be incentivized to implement new educational requirements in exchange for state resources, per The Daily Mail. Mulligan additionally compares Biden’s plan to President Obama’s Affordable Care Act (ACA) healthcare plan, noting in the study, “Under both ACA and BBB, providers are able to pass on much of their costs to federal taxpayers.”

Lukas also decries the federal government’s ever-increasing involvement in education, in this case, in daycare education. “Families should be just as alarmed at the idea that the federal government would be setting the rules and effectively deciding who can teach at American childcare centers and what can be taught. This will mean less true choice and variety. Faith-based providers will be squeezed out,” Lukas says.

The combination of rising prices, government intervention in daycare, and increased federal regulations on daycare programs are all major causes for concern to Lukas and Mulligan.