The day-care reform juggernaut

National Review, March 10, 1989 by Ron Haskins, Hank Brown

Raising children can be expensive, so congressional liberals want to take on the job. President Bush wants to make it cheaper. What'll it be? An entitlement or your money back?

ONE OF THE hottest issues now on the Washington social policy agenda is day care. There is a nearconsensus that something should be done; the danger is that conservatives and moderates will be seduced into supporting a liberal initiative that is a guaranteed disaster.

Day care is a problem for many mothers, in part because of social changes that have seen more single, full-, and part-time working mothers than ever before. These make such traditional solutions as having relatives or friends watch the kids more difficult. But tbe "child-care crisis" is in fact part of a far larger problem: raising children is expensive, whether you use day care or not. Those who focus their efforts on day care at the expense of other needs of children and parents are pushing a very particular horse.

Stripped of rhetoric, "child care," as enshrined in the Democrats' Act for Better Child Care (ABC), boils down to the familiar liberal approach to social problems: intervene directly in the market, put lots of restrictions on the type of service and who can provide it (thus greatly increasing the cost to the point where many families can no longer afford the service), then dole out federal cash in subsidies so that millions of families become dependent on the government. As Aaron Wildavsky notes, Democrats use spending to create constituents.

Now, many conservative constituents argue that day care is intrinsically inferior to home care. But Congress is not that receptive to the arguments of social conservatives. It will take the position that it should not engage in social engineering, "forcing" women out of the job market. But the "child-care" initiatives are also social engineering, for they assume 1) that day care per se is the main problem, 2) that the Federal Government is better equipped than parents to determine the appropriate type and cost of day care, and 3) that the best type happens to be professional day care-the most expensive kind.

It's not too late to avoid the creation of yet another entitlement, if we can shift the ground from rhetoric to facts. Last year, Congress heard a thousand anecdotes about families that could not find the kind of care they wanted; of course, Congress can find an anecdote to support any point of view on any social problem. But if there is a supply crisis, prices should be going up. Survey data make it plain that prices have risen quite modestly in the past decade, about 8 per cent. For most families, day care is at most a nagging problem, not a crisis.

Another false claim about cost, one slavishly repeated in the media, is the statement that day care currently costs $3,000 a year per child, more in many populous areas. In fact, national surveys show that the average American family with a working mother spends about $1,400 per year on care. Even if the families that get free care ftom relatives (the grandmothers the regulators are so eager to replace with expensive professionals) are eliminated from the calculations, and if only families with a mother who works full-time are included, the average expenditure is still only about $2,100 per year.

To be fair, this is still a considerable expense for some families, Sandra Hofferth, an analyst at the Urban Institute in Washington, D.C., estimates that single, black mothers with earnings below the poverty line pay an astounding 26 per cent of their earnings for child care: the national average is about 10 per cent.

But the truth is, these figures are so high because Congress goes in for disguised social engineering in the matter of child care-through the tax code. By allowing the personal income-tax exemption, and the deductions for dependents to be virtually wiped out by inflation, we have instituted de facto fiscal discrimination against everyone with children, whether the mother is single or married, working or at home.

In his budget, President Bush has begun to restore these deductions, at least for the poorest families; we can let them keep their money so that they can raise their children the way they think best. That's a genuine solution to what is the real problem, namely, the tax on children.

Is there, then, any remaining reason to regulate day care? Fiery, anecdotal congressional testimony tells us that unregulated care isn't safe. But the biggest study ever to address the safety of unregulated care was conducted in 1981 by Abt Research Associates and Stanford Research Associates. Based on a comparison of nearly eight hundred regulated and unregulated day-care homes in Philadelphia, San Antonio, and Los Angeles, the authors were "consistently impressed" by the quality of care and concluded that it was "stable, warm, and stimulating," that it "cater[ed] successfully to the developmentally appropriate needs of the children in care," and that parents who used unregulated care were highly satisfied.