It’s ‘Demogrant’ Reborn, Not Day Care

<i> Barbara R. Bergmann, a professor of economics at American University in Washington, is author of "Economic Emergence of Women" (Basic Books)</i>

Vice President George Bush’s child-care program will do almost nothing to get the children of working mothers into quality care. In fact it is not a child-care program at all. Many of the families who would benefit from the program that Bush proposes have no child-care problems and no child-care expenses. Very little of the $2.2 billion that Bush’s program would cost the federal Treasury would be spent on child care.

The programs backed by Bush and Democratic nominee Michael Dukakis are very different. Dukakis is in favor of spending a modest amount of federal money on child-care centers and working to improve their quality. Bush proposes no direct spending on child-care facilities. What he offers instead is a considerably scaled-down version of the much ridiculed “demogrant” proposal that George McGovern made when he was the Democratic presidential candidate in 1972. McGovern advocated government grants of $1,000 a year to each individual. Bush’s proposal is a $1,000 tax credit for each child under 4 years old, with the grants restricted to families whose income is $10,000 or less. Of course, $1,000 has a lot less purchasing power today than it had in 1972. The family would have to have at least one wage-earner to qualify for the grant. Eligible families who owe less than $1,000 in taxes would get a cash rebate.

Bush’s plan would help few of the families in which both parents work. Only about 5% of two-earner couples with children have incomes under $10,000. A higher proportion of one-earner couples--about 11%--would be helped, and about 35% of working single mothers would receive benefits.


Parents would not be required to spend the grant on child care; it probably would be spent on other things. Some benefits would go to full-time homemakers, who have no child-care expenses. Of the grants going to families with working mothers, past behavior suggests that only a small fraction of the additional income would be spent on child care. These families, after all, are very poor, and have unmet desires for food, clothing, shelter, transportationand recreation that would absorb all of the grant in many recipient families and most of it in the rest.

The politics of Bush’s proposal are fascinating. The Far Right hates the idea of the government encouraging and subsidizing out-of-the-home child care, and many otherwise liberal men don’t care for it either. Yet Bush needs to woo the women’s vote and is compelled to say he has something that will help with child care. This plan, which makes no real contribution to solving day-care problems, is the result. While the Bush plan would allow benefits to the traditional family where the wife stays home and cares for the children, it would deny grants to welfare mothers who also stay home and care for the children. This will make it easier for the Far Right to swallow the demogrant idea.

Bush’s demogrant plan is worthwhile as a poverty-relief measure. The original demogrant plan didn’t deserve the ridicule heaped on it, and this idea deserves serious discussion. The Democrats would never have had the nerve to revive it.

But the Bush demogrant idea does not address the real day-care issues, which are quality, safety and reliability at a low price. Parents even in the middle range of income do not feel they can afford to pay the price that is currently required to buy high-quality child care. They want the government to provide it and to pay for it out of tax revenues. They’re torn between continuing their children in substandard care or accepting a huge cut in their living standards.

The plan Dukakis backs would fill only a small fraction of the felt need, but would make day-care facilities better and more available for at least some children. Bush only pretends to help with the child-care problem.