Statement of Administration Policy: S. 5 - Act for Better Child Care Services of 1989

(Senate)
(Dodd (D) CT and 43 others)

The Administration supports child care legislation that is consistent with the principles underlying the tax credit legislation (S. 601) that the President has transmitted to the Congress. S. 5 does not meet that test. The President's senior advisers therefore would recommend that he veto S. 5 if it were presented to him as a stand-alone bill or as part of any child care legislation, such as a bill incorporating S. 1185, Senator Bentsen's proposal.

The President's principles are:

• Assistance should go directly to parents. Parents are best able to make decisions about their children, and they, not the government, should choose the child care they consider best.
  
  
• Federal policy should increase, not decrease, the range of choices available to parents.
  
  
• New Federal support for child care should be targeted to families most in need.
  
  
• Federal policy should not discriminate against two parent families in which one parent works at home to care for their children.

S. 5 violates all of the President's principles:

• S. 5 puts its trust in government, not parents. Assistance does not go directly to parents. It is provided to States, which have the ultimate decision-making power on the care children will receive — whether that care is provided under contracts, grants, or certificates. Amending S. 5 to delete the language providing that certificates can only be used pursuant to a written agreement between the State and eligible child care provider would not significantly shift power to parents. States could decide not to offer certificates, or they could offer only a small number so that the majority of parents would still be faced with using a provider whom the State has given a grant or contract.
  
  
• S. 5 provides assistance to two parent families only when both parents are employed, perpetuating the current discrimination against those families which sacrifice income so that one parent can work at home to care for their children.
  
  
• S. 5 decreases the range of child care choices available to parents. All care subsidized by S. 5, including care provided by relatives, must be totally non-sectarian in nature and content — a significant limitation on parental choice. Amending S. 5 to delete application of the non-sectarian requirement to care subsidized through certificates would still limit parents' choices unless the States provided all assistance to parents through certificates. In addition, S. 5 mandates Federal standards that will limit the supply of providers and drive up prices, also diminishing parents' choice. Amending S. 5 to make the mandated Federal standards "recommended standards" and linking required State matching rates to achievement of these standards would lessen but not eliminate these effects.
  
  
• S. 5 is not well targeted and would serve only a fraction of families most in need. Some families of four with incomes in excess of $45,000 — more than four times the poverty level — would be eligible. The sponsors' estimates show that in 1990 only six percent of eligible children would receive child care from the States, and there is no guarantee they would be from the families most in need.

In addition, S. 5 sets up a huge bureaucracy that will require significant administrative overhead costs and reduce the monies made available to parents.