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Vice President JD Vance wants to pay married parents to stay home with their children, and he wants to do it with money Congress appropriated to help low-income families afford day care. Whatever one thinks of the goal, which may prove popular, the proposal fails every test we should apply to government subsidies.
That’s because the proposal corrects no market failure. It pays people for choices they’re already making. It adds a new claimant class to a budget that cannot carry the ones already promised something. And it does all of this without a workable plan to pay for it.
Under a draft rule now circulating at the Department of Health and Human Services, married couples in which one spouse works at least 35 hours a week and the other stays home would become eligible for the federal child-care subsidy — about $9,000 per child, per year — as payment for “parent-based childcare.” The money would come from the Child Care and Development Fund, a $12-billion block grant created in the 1990s to help low-income parents pay for care while working or finishing school.
The CCDF currently covers about 1.3 million children and 870,000 families. Four in five recipient families are headed by a single working parent, usually a mother. The new rule would add no new money to the fund, exclude unmarried couples and send checks to households rather than day-care providers.
Vance aims to end what he sees as discrimination against stay-at-home parents, offsetting the income they give up to care for children and making single-earner married families easier to sustain. These, too, are goals that we can debate, but none will be furthered by this proposal.
Start with the threshold question: Why should the federal government subsidize families at all, or put its thumb on the scale about how they do it? Raising children is humanity’s oldest private activity. The state shouldn’t interfere.
If there is a rationale for intervention, the standard one is market failure: The market produces too little of something society wants — in this case, allegedly, stay-at-home parents. Each family has their own financial circumstances, but no market failure prevents a married couple from deciding that one spouse stays home.
Instead, we’re told that the problem is federal policies, including the CCDF, that subsidize going to work and lead to fewer parents staying home with their kids than would otherwise. The claim is that giving parents similar money to stay home would allow a parent to quit their jobs without losing subsidies.
But for the majority of single moms benefiting from the existing child-care subsidy, not working isn’t an option, and that $9,000 won’t make up for the loss of a paycheck. That means that the only ones who would benefit are stay-at-home moms who already made their choice before the government intervention, and those whose families can afford for one parent to stop working.
Cash-for-care programs in Norway and Finland, as well as the extension of France’s parental education allowance to second children in the 1990s, reduced maternal employment more significantly for educated women. In Norway and France, the mothers’ earnings losses persisted for several years after the end of eligibility.
If Vance’s goal is more children rather than fewer working mothers, the record is worse. Hungary, Poland, Japan and South Korea have spent enormous sums on pronatalist payments. They have almost nothing to show for it except for changes in the timing of fertility.
There are also fiscal questions. First, is it sound to disincentivize work when the two biggest spending programs and drivers of our debt — Social Security and Medicare — are funded by working Americans? If you don’t want to reform entitlements, don’t pay workers to stay home.
Second, there already aren’t enough CCDF funds to serve all the parents who want them for day care. And as mentioned above, those single parents currently benefiting from the program won’t be able to quit their jobs. That means that expanding eligibility to married couples with one stay-at-home spouse will stress the program further. That’s unless Congress expands the funding. With the entitlement crisis and a deficit now running near 6% of GDP, how will we cover this new federal program?
The claim that child-care subsidies like the CCDF discriminate against married couples is also weak. Our tax-and-transfer system is riddled with asymmetries. Stay-at-home spouses collect half their partner’s Social Security benefit, and all of it as survivors, without paying payroll taxes on their own earnings. Homeowners deduct mortgage interest; renters don’t. The answer to a program you object to is to shrink or end it, not to create a parallel program for whoever feels left out.
If the administration wants to help families, it should remove the barriers that make raising children expensive for all parents independent of their work status.
Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University. This article was produced in collaboration with Creators Syndicate.
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Ideas expressed in the piece
- The article argues that Vice President JD Vance’s plan would fundamentally change the purpose of the Child Care and Development Fund (CCDF), a roughly $12‑billion block grant that currently helps low-income working parents pay for child care so they can work, attend school or job training[1][4][6].
- It stresses that under the draft rule, married couples in which one spouse works at least 35 hours a week and the other stays home would receive roughly $9,000 per child annually as “parent-based childcare,” diverting money from a program designed to subsidize care provided by licensed providers rather than direct cash to households[1][2][4].
- Building on this, the article contends that the proposal does not correct a market failure, because married couples already have the option for one spouse to stay home and no structural barrier prevents that choice; instead, it pays people for decisions they are already making, thereby transforming the existing program into a new entitlement for stay-at-home, largely middle-class families.
- The piece underscores that the CCDF already serves fewer eligible children than qualify, with federal guidelines requiring parents to be working or in education or training and income to fall below 85% of state median income, so adding a new claimant class without new funding would further strain an already oversubscribed system[4][5][6].
- Moreover, the article argues that because four in five CCDF recipient families are headed by single working parents, mostly mothers, those parents cannot realistically quit their jobs and therefore would not benefit from “parent-based childcare,” meaning the policy chiefly advantages married couples who either already have a stay-at-home parent or can afford one.
- The column warns that subsidizing nonwork through this mechanism is fiscally unsound, since Social Security and Medicare are financed by payroll taxes from current workers, and reducing labor-force participation by encouraging one earner to leave the workforce conflicts with efforts to stabilize long-term entitlement finances.
- It further points to international evidence from cash-for-care schemes in Norway and Finland and France’s parental education allowances, noting that such benefits reduced maternal employment, especially among educated women, and produced persistent earnings losses, reinforcing the concern that Vance’s proposal would depress women’s labor-force attachment rather than increase births.
- Extending this critique, the article notes that pronatalist payment programs in countries such as Hungary, Poland, Japan and South Korea have spent heavily with little impact on overall fertility beyond shifting the timing of births, suggesting that large family subsidies are an ineffective tool for raising birth rates.
- The piece also challenges the claim that CCDF discriminates against married couples, arguing that the U.S. tax-and-transfer system already contains many asymmetries that favor certain family arrangements, including spousal Social Security benefits for nonworking partners, and that the appropriate response to perceived unfairness in a program is to reform or shrink it rather than create a parallel subsidy for those who feel excluded.
- Finally, the article suggests that if policymakers genuinely want to help families, they should focus on removing regulatory and cost barriers that make raising children expensive for all parents—regardless of whether they use paid child care or provide care at home—rather than layering a new subsidy on top of existing programs.
Different views on the topic
- Supporters of Vance’s initiative emphasize that the plan would, for the first time, allow married parents with a stay-at-home partner to access federal child-care subsidies, framing it as recognition of the economic value of unpaid caregiving in the home and a way to let parents spend more time raising their children[1][2].
- Advocates contend that current policy favors families who place children in formal child care, because CCDF dollars typically flow directly to providers, and they argue that redirecting or sharing those funds with parents who care for children at home would level the playing field between different child-rearing choices[1][2][6].
- In addition, the proposal is presented by allies as part of a broader conservative effort to support traditional family structures, with proponents saying that enabling one parent to stay home on a single income could strengthen married households and provide children with more stable, full-time parental care[1][2].
- Supportive commentary notes that eligibility would still be limited by income tests and work requirements, with one spouse required to work full-time and the household needing to meet CCDF income thresholds, and therefore maintains that the plan continues to target working families rather than creating a universal, open-ended entitlement[1][4][5].
- Some backers link the stay-at-home subsidy idea to Vance’s earlier calls for more generous child tax credits that account for diverse family arrangements, including extended-family caregiving, arguing that federal child policy should be “good for all families” instead of privileging a single model centered on institutional day care[3].
- Furthermore, supporters argue that expanding CCDF’s definition of eligible “child care” to include parental care at home would give families greater flexibility in navigating high child-care costs, long waitlists and uneven quality in provider-based care, effectively turning the program into a more comprehensive pro-family support rather than a narrow work-support tool[1][2][6].
- Proponents also suggest that subsidizing stay-at-home parents could counter cultural and economic pressures that push both parents into the workforce, contending that many families would prefer to have one parent at home but cannot currently afford to forego a second paycheck; under this view, directing funds to such households corrects what they see as an imbalance created by past welfare reforms that prioritized wage work over caregiving[1][2].
- Finally, some commentators sympathetic to the plan argue that it could indirectly encourage higher fertility and stronger family formation by making single-earner married life more financially viable, asserting that when families feel more secure about income and child-care arrangements, they may be more willing to have additional children, even if evidence from other countries is mixed[1][2].
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