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No Federal Role in Daycare

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Those of us who favor limiting government power should stop accusing President Clinton of treading water during his final years in office. The last thing we need is a new initiative from this lifelong interventionist politician.

Last year several observers commented that the president was playing golf more than presiding and that perhaps he had lost enthusiasm for the office. We should have been so lucky. He’s kicked off the year with initiatives to expand Medicare and to get the feds deeper into daycare. President Clinton once declared the era of big government over. Either he has rescinded that order or we have entered the era of lots of little government.

In promising “the single largest national commitment to child care in the history of the United States,” Clinton threatens to create another burgeoning entitlement. I venture to guess that parents would have an easier time affording child care (if that’s what they want, although nothing substitutes for a parent’s own care) if the federal government simply repealed the taxes that eat up so much of every family’s income. But that is not how the alleged undertaker of big government does things. If he thinks people can’t afford good daycare, he doesn’t propose to repeal or even cut taxes. The welfare state wouldn’t get credit that way. Clinton needed a way to maintain or increase citizen dependency on government.

So he has called for nine proposals to increase government spending and tax credits linked to the use of daycare. The price tag is being set at nearly $22 billion, but that is misleading. Some $7.5 billion would be in cash subsidies to families via block grants to the states. Another $6.8 billion would be spent on Head Start and an Early Learning Fund. That will be wasted money better left in the taxpayers’ pockets. The rest of the money in the Clinton initiative is an expansion of tax credits for children. Letting people keep their own money shouldn’t be counted as government spending, for that would imply that the state is the first claimant on all income — an entirely un-American idea. Nevertheless, tax credits are a poor way to let people keep their own money. Why should citizens have to comply with the government’s conditions merely to hold on to what is already theirs? People without children are as deserving of their incomes as parents. Why the discrimination?

Politicians prefer tax credits to tax repeals because they can maintain control even if they forgo a little revenue. Conditions can be set for tax credits. For example, parents could be denied the credit if they use a daycare center not approved by the federal government. That would give the feds a chance to achieve a creeping takeover of the daycare industry, through licensing and other regulations. The Constitution does not permit that, but who cares what the Constitution says anymore?

The Clinton program is a basket of absurdity. For example, a third of the money is to be provided by the cigarette tax increase he’s hoping for. Since poorer people smoke more than wealthier people, we have the prospect of taxing the poor to finance daycare for themselves and the middle class. Does that makes sense? (By the way, is the higher cigarette tax supposed to finance government programs or discourage people from smoking? To the extent it does the latter, it cannot do the former. Can’t they make up their minds?)

Some people might think the Clinton plan is modest. But we should learn something from the health-reform episode five years ago. Clinton proposed a federal takeover of the medical industry, but the proposal came to a crashing defeat because the public was revolted by the idea of bureaucratized care. But Clinton didn’t give up. As he has said publicly, he can accomplish the same objective piece by piece, and that is what he and Congress have been doing ever since.

Clinton learned his lesson with medical care, and he undoubtedly will apply it to daycare. If his proposal passes, parents will be more dependent on the federal government for daycare services. They will have a stake in the programs and will favor annual expansion of them. The welfare state will be bigger and more encompassing. Let’s stop the expansion and repeal the government intrusion that already exists.

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    Sheldon Richman is vice president of The Future of Freedom Foundation and editor of FFF's monthly journal, Future of Freedom. For 15 years he was editor of The Freeman, published by the Foundation for Economic Education in Irvington, New York. He is the author of FFF's award-winning book Separating School & State: How to Liberate America's Families; Your Money or Your Life: Why We Must Abolish the Income Tax; and Tethered Citizens: Time to Repeal the Welfare State. Calling for the abolition, not the reform, of public schooling. Separating School & State has become a landmark book in both libertarian and educational circles. In his column in the Financial Times, Michael Prowse wrote: "I recommend a subversive tract, Separating School & State by Sheldon Richman of the Cato Institute, a Washington think tank... . I also think that Mr. Richman is right to fear that state education undermines personal responsibility..." Sheldon's articles on economic policy, education, civil liberties, American history, foreign policy, and the Middle East have appeared in the Washington Post, Wall Street Journal, American Scholar, Chicago Tribune, USA Today, Washington Times, The American Conservative, Insight, Cato Policy Report, Journal of Economic Development, The Freeman, The World & I, Reason, Washington Report on Middle East Affairs, Middle East Policy, Liberty magazine, and other publications. He is a contributor to the The Concise Encyclopedia of Economics. A former newspaper reporter and senior editor at the Cato Institute and the Institute for Humane Studies, Sheldon is a graduate of Temple University in Philadelphia. He blogs at Free Association. Send him e-mail.