Four Libertarian Principles to Guide Childcare Policy

Just as many conservatives believe that the federal government should have an education policy, so many conservatives believe that the federal government should have a childcare policy.

A case in point was an event held last March held by the American Enterprise Institute (AEI) titled “Should Conservatives Favor Child Allowances?,” as well as a recent article by Lyman Stone on the AEI website titled “More Choice, Fewer Costs: Four Key Principles to Guide Child Care Policy.”

According to its website, AEI

is a public policy think tank dedicated to defending human dignity, expanding human potential, and building a freer and safer world. The work of our scholars and staff advances ideas rooted in our belief in democracy, free enterprise, American strength and global leadership, solidarity with those at the periphery of our society, and a pluralistic, entrepreneurial culture.

AEI scholars are committed to making the intellectual, moral, and practical case for expanding freedom, increasing individual opportunity, and strengthening the free enterprise system in America and around the world.

Lyman Stone “is an Adjunct Fellow at AEI, a Research Fellow at the Institute for Family Studies, and a former International Economist at the US Department of Agriculture.”

At the AEI event, two conservative scholars argued against a government child allowance, and one argued for it. This was followed by a panel discussion in which three conservative scholars argued against a government child allowance and two argued for it, including Stone.

In his remarks, Stone posited four “key principles that should guide policymakers as we debate childcare policies and the increase in spending in this area: choice, compensation, fairness, and cost.”

1. Choice. The government should “do more to support school choice by providing vouchers to families.” But it should also support childcare choice. Any new government spending “should give parents more choice about childcare, not less, and correspondingly should not discriminate between different parental choices.”

2. Compensation. “Childcare work is important, and so it deserves appropriate pay.” Their wages average only $12 per hour vs. about $31 per hour in most other industries. But parents who care for their own child at home get even lower “wages.” The size of the benefit the government would need to provide parents, per child, is $12,896 in order “to make the decision between day care and at-home care financially fair.”

3. Fairness. “The odds a kid is enrolled in center-based care vary widely based on family income. Poor families are far less likely to enroll their kids in childcare than middle-class and wealthier families.” This means that “subsidies for childcare disproportionately go to high-income families.” Therefore, “any policy will necessarily have to confront difficult questions about who uses what type of care and why, and how to be fair to people who make different choices.”

4. Cost. “The Consumer Price Index indicates that childcare prices have risen 214% since 1990.” Regulations and zoning codes that restrict supply and facility use increase costs. “Policymakers could help families more by tackling the factors driving cost growth rather than simply throwing good money at a bad system.”

Stone concludes that “America’s childcare system is deeply flawed” and “phenomenally expensive.” He believes that it is “good that childcare is getting more policy attention” and recommends that “to ensure basic fairness and neutrality across cultural lifestyle preferences, any childcare policy should include an at-home care allowance.”

Just like libertarians believe that that the federal government should not have an education policy, so libertarians believe that the federal government should not have a childcare policy. But, for the sake of argument, if the federal government were to have a childcare policy formulated by libertarians, then it would look quite different from that proposed by conservatives.

1. The government should have no family leave mandates. The Family and Medical Leave Act (FMLA) of 1993 mandates that employers must provide eligible employees with up to twelve workweeks of unpaid, job-protected leave for specified family and medical reasons in a twelve-month period. Progressives and some conservatives—including some at the AEI—have been calling for the unpaid leave in the FMLA to be changed to paid leave, either by the federal government or by mandates to businesses.

In a free society, such leave would be left to the market. Family leave would be a fringe benefit negotiated between employer and employee just like vacation pay, holiday pay, sick leave, bereavement leave, jury-duty pay, and paid time off.

2. The government should have no refundable tax credits. Regular tax credits are dollar-for-dollar reductions in the amount of income tax owed. They may reduce the tax owed to zero, but if there is no taxable income to begin with, then no credit can be taken. Refundable tax credits, however—even when they are targeted toward families with children—are a form of welfare. They are treated as a payment from the taxpayer like federal income tax withheld or estimated tax payments. If the tax credit “payment” is more than the tax owed after the regular tax credits are applied, then the “taxpayer” receives a “refund.”

In a free society, any and all tax credits would be regular tax credits. No one would receive a refund of taxes that he never paid in. The tax code, to the extent that it existed, would not be used for social engineering.

3. The government should have no at-home care allowance. It doesn’t matter how much childcare costs. It doesn’t matter how many hours a parent cares for a child. It doesn’t matter if poor families are less likely to enroll their children in institutional childcare. It doesn’t matter if there is a lack of access to affordable childcare.

In a free society, the government would not subsidize anyone or anything. Once it is accepted that it is okay for the government to subsidize families just for having children, no reasonable or logical objection can be raised to the government subsidizing anyone or anything.

4. The government should have no childcare policy whatsoever. It is blatantly unconstitutional, and not the proper role of government, for the federal government to have family leave mandates, payments, refundable tax credits targeted toward families with children, and subsidies for parents who stay home with their children.

In a free society, the government would be completely indifferent as to whether anyone had children or not. It would not concern itself with their education, health care, or upbringing. In an essay on the dangers of public education, the libertarian political theorist Murray Rothbard set forth the role of the government regarding children:

Is there, then, to be no State interference whatever in the relations between parent and child? Suppose that the parents aggress upon and mutilate the child? Are we to permit this? If not, where are we to draw the line? The line can be simply drawn. The State can adhere strictly to the function of defending everyone from the aggressive violence of everyone else. This will include children as well as adults, since children are potential adults and future freemen.

And those are four libertarian principles to guide childcare policy.

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