Elizabeth Warren Child Care Plan: What Parents Need to Know

On Tuesday, Massachusetts Senator and presidential candidate Elizabeth Warren unveiled a universal child care policy proposal aimed at helping working mothers and fathers through the increasingly expensive early years of parenthood. If it ever came to fruition, the Universal Child Care and Early Learning plan would transform access to child care in the United States, subsidizing child care for all parents and using money raised through a wealth tax to assist parents on a sliding scale according to their income. Some parents would be able to send their kids to daycare for free; others would pay no more than seven percent of their income on child care programs.

Under Senator Warren’s plan, the federal government would partner with local providers, including state-and-city funded child care centers and private child care centers, to create a larger network of options available to parents. The plan would also subsidize in-home child care. As part of the program, child care would be held to national standards rewritten to focus on early childhood learning, though local communities would remain in charge of the programs, which would pay child care providers comparably to preschool teachers. Today, the average child care provider makes just over $20,000 dollars a year. The average preschool teacher makes some $26,000 dollars a year.

Federal funding would ensure that families making below 200 percent of the federal poverty line (less than $25,750 dollars a year for a family of four) would be able to access child care for free and that any family over that threshold would pay no more than seven percent of their family’s income per year. Currently, the average two-parent household pays anywhere from nine to 36 percent of their income to send just one child to childcare, according to data from the Economic Policy Institute.

Warren proposes to fund the Universal Child Care and Early Learning program, which would cost taxpayers about $70 billion per year entirely from an already-proposed wealth tax imposed on Americans with a net worth north of $50 million. Warren says that tax will generate some $2.75 trillion in revenue over the next decade, covering the cost of the plan four times over.

The average cost of child care across the country ranges from $4,000 to $22,600 dollars annually. In over half of American states, child care costs more than the annual tuition at a four-year-college.

The plan is not unprecedented, but it is unusual in America, where kids historically get the short end of the stick when it comes to federal funding. Only 9.4 percent of federal spending is dedicated to Americans 18 or younger, and even less of that is dedicated to kids under the age of five. At the height of federal investment in American children, the government spent just 2.6 percent of its GDP on American kids. By way of contrast, Sweden spends 22.9 percent of GDP on childhood programs.

As it stands, the few programs that support children and families are appropriated annually and are needs-based programs like Medicaid, Supplemental Nutrition Assistance Program, Temporary Assistance for Needy Families, and the Child Care Tax Credit. On average, the poorest American parents receive $3,000 a year in benefits.

The push for early childhood education is not just about child care or keeping parents in the workforce, which has proven difficult for the reasons Warren outlined in her famous book The Two-Income Trap. Early childhood education programs are linked to greater cognitive skills in children, higher high school graduation rates, reduce poverty and crime, and strengthen the economy. Kids who attend ECE programs have higher levels of self-control and regulation and on average have a more productive professional lives. According to Warren, every dollar spent on this program would save seven more federal dollars in social spending programs meant to combat poverty and provide assistance to those in need.

The plan is a big promise, which is not an unusual thing for a candidate to deliver at the outset of a Presidential campaign. Whether or not it is practical, it seems indicative of Warren’s ambition to put working parents, her historic area of research and advocacy, at the center of her candidacy. Warren had children young and has spoken about her struggle to get through her first jobs and law school. It seems likely she will revisit this issue consistently going forward, a political strategy that may endear her to the Latino and rural families a universal child care policy stands to benefit the most.