Day Care Deal

January 7, 1998 at 12:00 AM EDT

JIM LEHRER: President Clinton laid out his child care proposal this way at the White House this afternoon.

PRESIDENT CLINTON: I don’t believe I have ever talked to a parent who was also in the workplace who has not been able to cite at least one example, and oftentimes many, many more, of a conflict between–that he or she felt between the obligations of parenthood and the obligations to the job.

Today, I am proud to propose the single largest national commitment to child care in the history of the United States. Now, this new proposal has three fundamental goals:

First, to make child care more affordable and available to all Americans, with increased block grants to states, we will double the number of children receiving child care subsidies to more than 2 million; we also will help more than 3 million working families to meet their child care expenses by dramatically expanding the child care tax credit.

These tax credits will mean that a family of four making $35,000 and saddled with high child care bills will no longer pay one penny in federal income taxes. I’m also supporting new tax credits to encourage more businesses to provide child care for their employees.

Second, we must make sure that every child has a safe and enriching place to go after school. I am proposing the expansion of before and after school programs to help some 500,000 children say no to drugs and alcohol and crime and yes to reading, soccer, computers, and a brighter future for themselves.

Third, we have to improve the safety and quality of child care and make sure that child care advances early childhood development. I’m proposing an early learning fund to help to reduce child to staff ratios in child care centers, train child care workers, and educate parents. We have to also strengthen the enforcement of state codes and licensing requirements.

A lot of us have had our own experiences with child care. I’ve often wondered how my mother, when she was widowed, would have been able to go back to school if I hadn’t been able to move in with my grandparents. I was lucky, and it turned out reasonably well for me. (laughter in audience)

But how many children are out there with exactly the same potential who never got the same break by pure accident of family circumstance? You don’t know the answer to that, and neither do I. But we know what the answer should be. The answer should be not a single one.

JIM LEHRER: With us now are Rahm Emanuel, senior adviser to the President, and Wade Horn, commissioner for children, youth, and families in the Bush administration, now president of the National Fatherhood Initiative to improve the involvement of fathers in children’s lives. Mr. Horn, in general, what do you think of the President’s proposal?

WADE HORN, National Fatherhood Initiative: Well, the package sounds good. It kind of reminds me of those toys as a kids I used to see advertised in the back of comic books where it sounds wonderful, but when you finally get it and you unpackage that toy, it doesn’t quite live up to the expectations of the advertisement. And that’s the way it is with this package.

Certainly, it sounds good. I mean, who can be against the idea of increasing the affordability and quality of child care? But there are some fundamental problems with this package. First of all, this package ignores the fact that there are in fact, millions and millions of families where there is a parent who foregoes earnings in order to stay home and raise their children. And this package does nothing for them. In fact, it shifts the tax burden onto those stay-at-home parents.

JIM LEHRER: In what way does it do that?

WADE HORN: Well, it does that because what it does is it provides a subsidy for one particular kind of child care choice. What it says, if you choose to go into the labor force and to put your kid in child care, we’ll give you a subsidy. But the tax to pay for that is spread among all the families in America. And so, if you, in fact, keep your–if you stay at home to raise your child, yourself–

JIM LEHRER: Either parent stays home–

WADE HORN: That’s right.

JIM LEHRER: –they’re not affected by this.

WADE HORN: Well, it does proportionately increase the tax burden on that family.


WADE HORN: The second problem with this is it doesn’t address the fundamental problem that most families talk about in America today. It’s not that most parents are saying, gee, I wish I could afford to spend, you know, to make sure my kid spends more time in child care. What families are saying is, I wish I could afford to spend more time with my kids, my own children. And this package really doesn’t do anything to address that.

JIM LEHRER: What about that, the last question first. This does not address the basic thing that everybody wants, which is to spend more time with their children, rather than less.

RAHM EMANUEL, Senior White House Adviser: Well, I think what this does address is the competing demands that parents face between work and family. And when both parents work, they have to make choices. And let me bring up the second point that Wade asked. We, in fact, have done a great deal of things to help parents when it comes to the one parent deciding to stay home and one work.

There was expansion of the earned income tax credit to help families make their paychecks stretch from paycheck to paycheck after a great deal of Republican opposition. We did the $500 per child family tax credit, which is going into effect this year. We did and passed after six years of opposition by Republicans the Family & Medical Leave Act, so a parent could stay home with a child. We also did a raise in the minimum wage for 7 million people who are the single worker in that family, breadwinner.

That was a big pay increase against a great deal of opposition from some quarters. So we have done a great deal, and there is more to do when it’s only one person working. But there are a lot of families–and it’s a reality today–you just can’t walk away from that reality–that people–both–in certain homes two people are working and they don’t have to choose between being good workers and good parents, and this gives them good, safe, affordable, accessible child care.

And parents make those choices every day, and this is ensuring that they have that affordable and accessible child care that’s safe and high quality.

JIM LEHRER: Do you choose–Mr. Horn, do you choose the basic premise that there is a need for child care for some families who, for whatever reason, cannot stay at home?

WADE HORN: Well, certainly there’s a need for child care for some families. I mean, take, for example, welfare reform. We’re moving a lot of mostly single mother-headed families into the pay labor force. But there’s already a great deal of money available to provide child care subsidies for them. In the 1996 child welfare legislation there’s $30 billion, including $4 billion of new money for child care subsidies for that population. My goodness, even here in Washington $30 billion is a lot of money.

JIM LEHRER: In fact, Congressman Clay Shaw, who’s chairman of the subcommittee that oversees this in the House, said that very thing today; that he wanted to see how this other earlier money is spent on child care before he passes on this.

RAHM EMANUEL: The favorite part of this interview is I keep having to have a rendezvous–Wade to have a rendezvous with history, which is one of the big things we pushed in that welfare bill was an expansion of child care resources because Republicans opposed it. So I appreciate now that everybody wants to champion the child care resources that are in the welfare bill.

Second, is when it comes to this proposal on child care, you have a situation that for working families, that is, people in the middle class, child care represents a greater portion of the family budget than those in the high income brackets. And this package, whether it’s a tax credit, whether it’s a tax credit to businesses, tax credit to families, whether it’s a block grant to states, targets those very precious resources to those families where child care costs today represent a bigger portion of the family budget.

JIM LEHRER: And that’s based on the premise–not the premise–the reality that whether you have a lot of money, or whether you have a little money, you’re basically going to pay the same amount of money for child care. You don’t challenge that, do you, Mr. Horn?

WADE HORN: Actually, that’s not quite true because actually when you look at people who access child care and where child care is most accessible, it’s most accessible to those who are very affluent and those that are very, very poor. We have Head Start. We have a lot of money, $11 billion a year already that’s going to child care subsidies. But the point here is this: Why not take this $21 billion? And rather than saying this is how we’re going to spend your money, the taxpayer’s money, let’s give tax breaks to families, give them real choice, so that those families can either choose to go to work, put their kids in child care, use that money to do that, or to use that money to stay home and raise their children.

JIM LEHRER: And not have a federal program like the President proposes?

WADE HORN: That’s right. I mean, it’s much, much easier to do it that way.

JIM LEHRER: All right.

RAHM EMANUEL: Two points. One, this isn’t a federal program. It’s a tax credit to individual families, individual businesses, or for communities to set up. It’s not a new federal program at all created here.

JIM LEHRER: It’s an expansion of an existing program?

RAHM EMANUEL: Yes. And it was actually supported by Ronald Reagan and George Bush, and that’s why the Republicans in the East Wing today were supportive. This has bipartisan support. Second, I believe in those type of tax credits, and we wish we had had support from the Republican Party when it came to expanding the earned income tax credit, which helped working families get about a $2100 tax break. Third, when it came to the minimum wage and giving a raise, we would have loved to have had the support of the Republican Party, not the opposition to that, which directly affected the bottom line family budget. And fourth, when it came to the $500 per child, making sure middle class families and working families get that resources and that tax credit, we fought hard against the Republicans, who wanted to deny that. So I appreciate now the commitment that the Republican Party at least represented here by Wade, who wants to make sure families get that credit. This represents a specific need to middle class families. We did a study–there was a study done by the President’s economic advisers to the high income people, child care costs represent 7 percent of their family budget. To middle and working middle class families, child care costs represent 18 percent of the family budget costs. It’s a larger–

JIM LEHRER: And what you want to do with this program is reduce it–is close that gap?

RAHM EMANUEL: Basically help a family on the resources to make sure they can have affordable, accessible, high quality child care.

JIM LEHRER: Do you have a problem with that?

WADE HORN: I think that the issue really is about choice. Why is it that so many middle income families feel a need to put two adults into the paid labor force? And one of the reasons for that, or the big reason for it is the extraordinary high tax rate, the high tax burden that families pay. Let’s use this money to lessen that tax burden on families so they have two choices. They can choose to go to the paid labor force. My goodness, I’m not stopping–anyone can go into the paid labor force, and there ought to be good child care available for those who make those choices, but it seems to me what we ought to do is focus on choice, allow families to make the choice to go into the paid labor force or stay home and raise their own children. And the best way to do that is by lessening the tax burden on the family, not by subsidizing one particular kind of child care choice.

RAHM EMANUEL: Two things: One, I agree. That’s why we have a targeted tax credit called the child care tax credit, which was supported by Ronald Reagan and George Bush. We’re expanding it. I agree with you. It’s a targeted tax credit for child care. Second is some people make choices, and some people have to have both parents working, and where both parents are working, or a single home, a single working–a family with a single parent, this is the type of resources they need and the type of support they need, and doesn’t create another federal bureaucracy. It’s a targeted way of doing it, being a targeted specific need, so people could be good parents and good workers.

JIM LEHRER: A lot of people have been saying today that this particular plan is one of the most important, if not “the” single most important domestic proposal that President Clinton has on his plate from now to the end of his term. Is that correct? Is that a correct characterization of this?

RAHM EMANUEL: Well, this, in combination with–I would say what we want to do on education and what we want to do in the area of health care. There is no doubt, this one of the prime and top priorities the President has. It builds on the record he has set with the expansions and the earned income tax credit, the expansion and creation of insuring 5 million uninsured children, the family medical leave–Hope Scholarship, which is for community college and the first two years of education there, as well as in the minimum wage. It’s another piece of the brick and mortar for those hard-pressed working families to make sure that they can be able to make their paychecks stretch.

JIM LEHRER: But just as a matter of priorities, how important is child care in all of those things you’ve just mentioned?

RAHM EMANUEL: Top. I’m not going to put a Roman numeral–I don’t think that’s my job. He does that. The President does that. I would just say it is in the top.

JIM LEHRER: It’s in the top.

RAHM EMANUEL: The top five.

JIM LEHRER: All right. Mr. Horn, where’s this going in the Republican Congress?

WADE HORN: Well, it’s unclear exactly where it’s going to go. I mean, the full plan has not yet been delivered to the Republican Congress.

JIM LEHRER: But based on what you know about it, what do you think is going to happen–

WADE HORN: I think there’s going to be a very, very strong voice within Congress, a very strong sentiment that what we ought to do is make sure that there’s more money in the family budget than not making sure that there’s more money in the child care budget. And that’s going to be, I think, a very important aspect of the Republican agenda.

JIM LEHRER: Philosophically, Mr. Shaw, Congressman Shaw, who I mentioned a moment ago, was quoted today as saying, the President seems to be proposing a new program almost every day now; maybe the era of big government is not over after all. Are you going to have to fight that problem?


JIM LEHRER: That perception?

RAHM EMANUEL: We accelerated the date in which you are going to have a balanced budget in this country, and that’s been accelerated by three years, in 1999. And so we’re going to have a balanced budget. It also reflects our values, and I think one of the things that the President’s done to change the way and bring a new way to Washington and to the way we just basically come up with our budget in this country is that you can have a balanced budget that increases investments in the areas of education, health care, child care, environment. And–in fact, I’m excited by the fact that while we have a balanced budget, we could expand Medicare; while we have a balanced budget, you can expand child care. And that’s, in fact, we’re being very fiscally responsible.


WADE HORN: This is the basic difference between Republicans and Democrats.

JIM LEHRER: That’s why I asked the question.

WADE HORN: Democrats see the budget coming in balance, and they think, ah ha, we can spend more money on social programs. Republicans take a look at a declining budget deficit and they say, my goodness, what this gives us an opportunity to do is to provide tax relief for families.

JIM LEHRER: Not to build up the child care system.

WADE HORN: Not to expand government spending but to, in fact, give relief to the family budget.


JIM LEHRER: We have to go. Thank you both very much.