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President Biden has pledged to limit child care costs with the passage of his sprawling social spending and climate plan, but a new analysis suggests that millions of middle-class families could actually see their expenses double under the legislation.
The study, published on Friday, was authored by Casey Mulligan, a University of Chicago professor who previously served as chief economist of the White House Council of Economic Advisers during the Trump administration.
It shows that child care costs could increase by up to 102% – and as much as 122% – for some Americans under Biden’s signature economic agenda, which would cap child care costs at no more than 7% of parents’ income for those earning their state’s median income. Parents are required to be working, searching for a job, in school or dealing with a health issue in order to qualify.
For a family with an infant and a 4-year-old, that could mean an additional annual expense of up to $27,000 unless they qualify for the subsidies in the Democrats’ spending bill. About half of families using non-parental child care would fall into that category, according to the analysis.
“It is challenging to forecast how families would cope with such harmful and disruptive changes in childcare costs,” Mulligan wrote. “Many families may respond by withdrawing a parent or relative from the workforce to provide the care.”
The increase stems from the bill’s increased regulation of the industry and the lack of incentives for providers to offer cheaper care, Mulligan said. Although the bill mandates higher wages for child care workers and also requires additional staffers per job in order to meet government-defined quality metrics, it only offers subsidies to certain low-income households (the program would eventually expand in 2025 to those earning up to 250% of their state’s median income).
The median household income in the U.S. was $67,521 last year, according to the Census Bureau.
The left-leaning Center for American Progress estimated that families’ costs could soar by an average of $13,000 if Biden’s bill becomes law, largely due to mandated higher wages for child care workers. While the measure is intended to increase child care worker wages to the wages currently received by elementary school teachers, it does not offset the pay raise with subsidies for all parents.
