Sen. Elizabeth Warren (D-MA), who’s running for the 2020 Democratic presidential nomination, on Tuesday unveiled a universal child care plan that would cap families’ expenses at 7 percent of income no matter how many children they have in care. It would be paid for, Warren says, by her proposed wealth tax.
Warren’s new plan would provide free child care for families with incomes below 200 percent of the federal poverty level, meaning less than $51,500 for a family of four in 2019. Families making more would have to pay, depending on how much they earn, but no family would pay more than 7 percent — the figure that the Department of Health and Human Services uses to define “affordable” child care, according to HuffPost’s Jonathan Cohn.
Many families now face child-care costs significantly higher than that. “As of 2017, married couple[s] paid an average of 11 percent of their household income on child care, while single parents paid 37 percent, according to the research and advocacy organization Child Care Aware of America,” Cohn reports. And Bloomberg’s Sahil Kapur says that, “Americans pay nearly as much for child care as they do for rent, with the average cost of child care in the U.S. approaching $1,400 a month, according to a 2018 HotPads analysis of a Care.com state and metro area pricing index.”
The costs: Warren’s plan would cost a net $70 billion a year, according to an analysis by Moody’s Analytics economists Mark Zandi and Sophia Koropeckyj — an amount “at least four times what the federal government currently spends on its main early childhood programs, which include Head Start, a block grant for state-level child care programs, and a tax credit that mostly benefits middle-class families,” HuffPost’s Cohn says.
Warren says the new program would be paid for by her proposed “Ultra-Millionaire Tax,” which would apply to families with a net worth of more than $50 million. "Experts project that the Ultra-Millionaire Tax will generate $2.75 trillion in new government revenue over the next ten years," the senator wrote in a post on Medium.com. "That’s about four times more than the entire cost of my Universal Child Care and Early Learning plan."
Warren’s proposal, similar to the Head Start program, would have the federal government work with local partners to create a network of child care choices, including licensed child care centers, preschool centers and in-home options. She said that the local providers would be held to national standards and that child care workers would be paid like comparable public school teachers.
“My plan will guarantee high-quality child care and early education for every child in America from birth to school age," Warren said. "It will be free for millions of American families, and affordable for everyone. This is the kind of big, structural change we need to produce an economy that works for everyone."