As Democrats pare down their massive tax-and-spend bill, reports are that they are keeping a large new daycare entitlement, which comes in addition to a large new universal pre-kindergarten program.
At the same time, the White House has suggested phasing out the child allowance after one year.
The question is this: If you wanted to spend money to help parents and children, and you were already willing to just hand cash to parents in the form of “tax credits” or a child allowance, then why would you specifically subsidize daycare instead of giving parents money and let them decide how to use it?
Some parents would spend the money on daycare, but others would rely on informal daycare — like grandma, a neighbor, a co-op — and use some of the money to contribute to this effort. Still others would take the money as an opportunity for one parent to stop working or work less.
This weekend, recording the radio show Left, Right, & Center, with Liz Bruenig and me, host Josh Barro made a good point. The reasons to have the government directly fund something are either (a) the government has some expertise or efficiency in paying for something (think of Medicaid buying healthcare in bulk), or (b) paternalism. That is, government sometimes believes you will spend the money on something bad.
Paternalism is the idea behind food stamps. Government wants poor people to spend money on food rather than on illegal drugs, big-screen televisions, or beer. So government gives them a form of money that they can only spend on food.
The paternalism in the child care case is this: The Biden administration believes that women who stay at home with their young children are making a bad decision, and so it is using this new entitlement to push women towards working outside the home and hiring someone else to raise their children.
That is the most logical explanation. It reflects some of the rhetoric from Biden administration economists. Heather Boushey, for instance, has long advocated policies “that make it possible for family members to go out there and get a job. It’s really about enabling people to work.” She thinks public policy should encourage both parents to work, even though roughly half of all mothers would prefer to be homemakers.
The liberal argument here is that more working moms is good for equality, and it juices the gross domestic product.
As we debate a daycare subsidy in the coming days, keep in mind that the Biden administration’s goal here is not so much to help parents as to change their minds about who should raise their children.
