America’s child-care system is failing families, Treasury says

The Treasury Department has determined that the nation’s child-care system is “unworkable,” saying it is plagued by market failures that put quality care out of reach for many families.

In a report released Wednesday, Treasury details the struggle many parents face to afford child care, especially as bills pile up before their peak earning years.

At the same time, Treasury found that many industry workers are paid low wages, suffer high turnover and face discrimination.

Treasury is making the case for federal government support for paid family leave, universal preschool and significant tax credits for parents and dependent care as Democrats in Congress work to write a social-spending bill that could total $3.5 trillion.

Treasury Secretary Janet Yellen and Vice President Kamala Harris will highlight those initiatives during a joint speech Wednesday afternoon at the department.

Individual families should not bear the sole responsibility of financing quality care that benefits the economy more broadly, Treasury argues in the report, adding that the system is failing to “adequately serve many families.”

“This is not just happenstance — sound economic principles explain why relying on private money to provide child care is bound to come up short,” the report says.

“Having a well-functioning child care sector is good for working families. It’s good for children. I would also emphasize it’s good for the rest of us,” said Catherine Wolfram, Treasury’s acting assistant secretary for economic policy. “It’s critical to a well-functioning economy.”

Those programs come with steep price tags. House Democrats estimate two pillars of the agenda — universal preschool and child-care subsidies for low-income families — would cost $450 billion. A national paid leave program could require roughly $500 billion more. 

Democrats are also proposing a permanent expansion of the dependent care tax credit, worth nearly $100 billion. The single biggest line item is an extension of the enhanced child tax credit to 2025. The Joint Committee on Taxation projected it would cost $550 billion over a decade — and many Democrats are pledging never to let it expire. 

“That money allowed folks to keep a roof over their heads, to put food on the table, and to be able to pay for the diapers, medicine, and school supplies their kids need,” House Ways and Means Committee Chairman Richard Neal of Massachusetts said Tuesday as his committee debated the legislation.

The breadth and cost of the programs have drawn attacks from Republicans, who accuse Democrats of trying to insert more government control and influence into the lives of Americans from the moment they are born.

“We should be focused…