The following article excerpt by Senator Elizabeth Warren (D-MA) is cross-posted from The American Prospect:
If you’re wondering why the U.S. has failed so miserably in developing a workable child care and early-childhood education system, consider the role of economic modeling.
In 2021, when the Congressional Budget Office (CBO) released its much-anticipated score for the cost of the child care provisions in the Build Back Better Act, it produced one headline number: $381.5 billion. This was what CBO estimated as the amount of money the government would lay out for child care.
But that budget score badly missed the mark on the net cost of the program. It did not account for any of the savings predicted by reams of academic research on the long-term economic benefits of child care. Nothing about how kids with high-quality early care do better in school, stay out of trouble, and have higher lifetime earnings. Nothing about the increased tax revenues generated by mamas and daddies who could now work full-time. Nothing about the mountains of data that show that when mothers are held out of the workforce in their early years, their lifetime earnings and even their security in retirement are seriously undercut—something universal child care could reverse. And nothing about the impact of higher wages for child care workers—wages that would mean many of those workers would be paying more taxes and wouldn’t need SNAP, Medicaid, housing supplements, and other help offered to the lowest-paid people in the country. In other words, according to CBO, investing in our children and filling a wheelbarrow with $381.5 billion in cash (a big wheelbarrow) and setting it on fire would have exactly the same impact on our national budget and our nation.
To every CEO of a Fortune 500 company or owner of a small neighborhood restaurant, budget scoring like this must sound like a crazy way of doing business. After all, investments don’t just have costs—they also have benefits. That’s why companies invest in things like building factories, converting to green energy, or offering employee benefits, even if they have to book a big cost up front. Those corporate executives don’t take on big-ticket projects out of the goodness of their hearts; they take them on because they want to boost profits, retain workers, and improve the company’s long-term outlook.