Analyzing The President's Child Care Initiative

Dallas – In a White House ceremony yesterday, President Clinton proposed a $21.7 billion child care initiative. The five year plan includes:

  • State Grants designed to boost subsidies to low-income working parents from $3 billion a year to $5 billion by 2003, and increase the number of children receiving assistance from one million to two million.
  • Increasing the Child Tax credit so that families making $30,000 or less could get a 50 percent credit on child care costs, up from the current 20 percent. The percentage would fall to 20 percent for families making $60,000 or more. The maximum benefit would be $2,400 per child and $4,800 total.
  • Tax Credits for Businesses that would allow a 25 percent tax credit for the costs of operating a child-care facility, starting up a new one and providing child care subsidies to employees.
  • Doubling the number of children eligible for early Head Start programs.
  • Boosting funding for the Department of Education's after school program from its current annual funding of $40 million to $200 million.
  • Establishing grants to communities and public-private partnerships for early childhood developments.
  • Providing states with extra help to enforce standards for child care centers.

The proposal is in response to what President Clinton calls a "silent crisis" in child care, but in a recent NCPA brief, Senior Fellow David Henderson showed that U.S. Census data indicates there is no real crisis. And while there are good points in this latest proposal, Dr. Henderson believes that more regulations will only mean more problems for day care. Dr. Henderson is available for comment on the President's child care initiative.