Child Care Is Buckling
At an Easter luncheon at the White House earlier this month, Donald Trump said to his guests that it is “not possible” for the federal government to “take care of day care” (or Medicaid, or Medicare), because “we’re fighting wars,” “we’re a big country,” and “we have all these other people.” Instead, he contended, such funding should be handled by the states. In response, some Democrats pointed out that the billions of dollars the administration is spending on its war in Iran could go toward helping many people indeed, including the millions who might benefit from investments in, say, free nationwide preschool.
The White House later said that Trump’s remarks were taken out of context. But they were consistent with his well-articulated spending priorities—which have left many families scrambling to find affordable care.
Child care is a vital piece of infrastructure. For one, child-care programs support the military’s ability to fight wars, given that roughly a third of active-duty service members are parents. More broadly, child care influences parents’ ability to participate in the labor market, which can have far-reaching economic consequences, as well as unmistakable social effects. Parents who can’t find caregiving help have less time to tend to their own needs and health, and risk becoming isolated from other adults. And of course, individuals who don’t themselves have young children rely on doctors, firefighters, police officers, farmers, grocery-store workers, and teachers who do. When the system falters, Americans with and without kids pay a price.
The clearest symptom of a failing child-care system is widespread program closures. In Indiana, more than 300 programs have shut down since last September, representing more than 10,300 slots for children. In Oklahoma, more than 400 day cares have closed since November. North Carolina has seen hundreds of closures as well, with a net loss of approximately 45 programs in the fourth quarter of last year alone.
The losses are affecting both lower-income families that rely on public subsidies to make care affordable and middle-class families paying full freight. For instance, KinderCare, the nation’s largest private provider of child-care services, closed more sites than it opened last year. Its chief financial officer said on an earnings call last month that the company is “taking a hard look at all of our centers,” and that the number of closures is likely to be higher in the period to come, partly as a result of “macro situations” including inflation, “the economy in general,” and “the instability of our country right now.”
Citing financial and enrollment challenges, institutions with affiliated child-care programs—many of which rely on federal funding streams—are reducing their offerings too. Since the beginning of last year, closures of centers have been announced at colleges including the University of Louisville, UCLA, Purdue, and numerous community colleges, and at hospital systems in Oklahoma, Nebraska, and Arkansas.
To be fair, Trump inherited a child-care system already in brittle condition. The cost of child care has been rising for decades. And before Trump returned to the Oval Office, the coronavirus pandemic and subsequent inflation had pushed provider costs and parent fees even higher, created uneven enrollment patterns, and worsened staffing shortages at care centers. Billions of dollars in pandemic-era relief funds had helped steady the system, but that money has since run out. The Trump administration had an opportunity to extend support for families and providers. Instead, its policies are pushing teetering child-care programs over the edge.
Under Trump’s economic and foreign-policy agenda, the prices of goods, gas, and health care have risen, compounding existing challenges for families and child-care workers. With current and prospective child-care educators unable to get by on the sector’s low wages, programs wanting to remain competitive have increased their spending on labor—costs that get passed on to families. In a January survey of early-childhood educators and program leaders conducted by the National Association for the Education of Young Children (NAEYC), nearly two-thirds of those who worked in child-care centers reported that their program had increased tuition over the past year, presumably as a way to deal with the costs of materials, liability and property insurance, and labor. Those increases have come just as many families, struggling to make ends meet, can least absorb them.
This creates a vicious circle: Families that can’t afford child care tend to opt out of it altogether. Sixty-one percent of respondents to the NAEYC survey said that parents’ inability to afford slots was leading to under-enrollment, compared with 41 percent of respondents who said so in a similar survey early last year. Yet because the United States treats child care as a pay-to-play system rather than as a public benefit, programs rely on high levels of enrollment to bring in the monthly revenue needed to make payroll and rent. Under-enrollment can quickly put programs into a budgetary death spiral, potentially leading them to increase tuition yet again, making care even more unaffordable.
Meanwhile, states—which Trump, in his Easter-luncheon remarks, suggested should take the lead in funding care—are facing enormous financial challenges. Because of Trump’s tariffs, states that export a lot of goods overseas, and those with industries (such as manufacturing) that rely on imported parts, face the risk of sluggish economic growth and declining tax revenue. Under the One Big Beautiful Bill Act, or H.R. 1, a greater share of the cost of public-assistance programs such as Medicaid and SNAP has been passed to states—some of which are cutting their funding of child care to reduce budget pressure.
Because most public funding for child care comes in the form of subsidy vouchers to help lower-income households pay for care—and because programs plan their budgets assuming that the vouchers will hold their value—messing with that funding destabilizes programs that serve families across income brackets. Last year, Indiana cut subsidy-reimbursement rates by 10 to 35 percent, which decimated the finances of already fragile care providers; scores of them closed or cut back on operations. (The situation became so dire that in mid-April, to address the shortfall, Governor Mike Braun asked the legislature to divert $200 million from the state’s general fund to its child-care-and-development fund.) Similarly, Washington State’s legislature cut nearly $150 million in child-care funding in the face of a budget deficit. And Colorado’s poor budget outlook has left the legislature unable to shore up its subsidy program, which a state newspaper recently described as “on the brink of collapse.”
The administration’s immigration policies also have implications for staffing child-care programs. Immigrants make up about one-fifth of the child-care workforce. An analysis by New America’s Better Life Lab (where I am a fellow) suggests that as the number of ICE raids and arrests has risen, many immigrant workers, including legal immigrants—and even Hispanic individuals born in the United States—have left the child-care labor force or moved into private home-care situations. Staff losses can force providers to let classrooms sit dark, despite high demand.
And immigration is hardly the only source of disruption. In January, the Trump administration moved to choke off federal child-care funding to five Democratic-led states, an action that came after a conservative influencer made unsubstantiated (and largely debunked) allegations of fraud by Minnesota day-care centers. Federal judges have so far blocked the administration’s action, but the threat alone has introduced fear among child-care providers and further unsettled the system.
The administration is also seeking to gut the regulatory landscape. Alex Adams, the Trump appointee in charge of child care, told his staff, according to The New York Times, that he wants federal child-care regulations to “fit on an index card in my back pocket.” One of his proposals would eliminate a rule that voucher reimbursements be based on verified enrollment rather than daily attendance—a measure that had protected child-care centers from losing money when children are absent only temporarily (because of illness or family vacations, for instance). One West Virginia provider told the Times, “If they take away enrollment-based pay, I will have to close.”
The “big, beautiful bill” did include some child-care benefits: The legislation increased, by up to $900 for certain families, the maximum Child and Dependent Care Tax Credit; raised the cap on pre-tax dollars that parents can put into flexible-spending accounts for child-care expenses; and increased tax incentives for businesses offering child-care assistance to employees. But although that may all sound good on paper, the impact of these steps is severely limited.
The Tax Policy Center estimates that only 13 percent of families with children benefit from the dependent-care tax credit. Putting more money into a dependent-care account decreases the amount of expenses parents can claim under the credit. And many employers have been scaling back family-friendly benefits rather than adding them. Plus, any gains families may see from the Republicans’ plan are likely to be reduced or canceled out by rising prices.
For families, failures in the child-care system have serious ripple effects: More mothers of young children, particularly college-educated women, have been dropping out of the labor force; evidence suggests that this is due more to the challenge of finding child care than to a desire among these mothers to step away from paid work to care for children. Parents who have remained employed have nonetheless experienced a higher financial burden and increased stress related to precarity of child care, as well as generally higher levels of disruption in the form of missing days of work to contend with child-care breakdowns. As one parent trying to secure a day-care slot told the NPR affiliate in Bloomington-Normal, Illinois, where three child-care centers have closed in recent months: “Literally, it feels like The Hunger Games.”
Not all is gloom and doom. A handful of states, seeking to make up for dwindling federal support, have sought other ways to fund child-care programs—and in these states, something of a child-care renaissance is happening. In New Mexico, which, despite tough odds, has made child care free for all families in which parents work or are in school, a portion of oil and gas revenue has been put into a trust fund for early-childhood care and education. Vermont implemented a small payroll tax to help fund child-care subsidies. Massachusetts set aside part of a voter-approved tax on wealthy households. In all of these cases, the money is being used to increase the number of child-care slots and facilities, raise educator wages, and reduce parent fees. (New York City has also laid out an ambitious plan for universal free child care that could, if fully funded, pave the way for free child care statewide.)
[Read: New Mexico’s free-child-care gamble]
These efforts may prove to be incredibly effective. But relying on states to ensure that all American families can access child care is not the healthiest long-term solution. Here, history can be a guide: Consider that children’s right to a free public-school slot—and the obligation to ensure that those slots exist—is contained in every state constitution. In many cases, these rights came into being because the federal government mandated them via statehood acts, or required them of southern states seeking post–Civil War readmission to the Union. Without such mandates, it’s impossible to say whether children’s right to an education, regardless of where in the country they live, would be guaranteed.
Both day care and public school are crucial community assets; in addition to enabling parents to work, they have enormous influences on children’s development. In this respect, it makes no sense for the child-care system to work differently from the K–12 education system—for a family in one state to have access to multiple free care options, when, if that same family were to move a few hundred miles away, they would face crushing prices, a dearth of options, and the possibility that any day, their kid’s program might close because of lack of funds.
Not every state has the tax base, the revenue, or the political will to build a sustainable child-care system. Trump can say that states should “take care” of day care so the country can fund its wars. But that notion is likely cold comfort to the many American families that will be left in the lurch.