Jared Bernstein, chair of President Biden’s Council of Economic Advisers, said the White House plans to push Congress to invest in childcare support in a bigger way now that a pandemic-era safety net is due to expire in September.
“We need to do more,” Bernstein told Yahoo Finance while attending the Federal Reserve Bank of Kansas City’s annual economic symposium in Jackson Hole, Wyo.
Costs for preschool and daycare are still climbing in the US, bucking the national trend of cooling prices, and squeezing parents already in the grips of inflation.
The average price for daycare and preschool across the country increased 6% in July compared to a year ago, according to the latest data from the Bureau of Labor Statistics.
And another economic shock is just around the corner when nearly $38 billion in childcare pandemic stabilization funding and programs passed in 2021 sunsets at the end of September. As many as 70,000 childcare centers are expected to be affected.
Democrats, including Sen. Elizabeth Warren (D-Mass.), have called on President Biden to address the end of childcare subsidies by including funds in an emergency spending package that Congress is expected to consider next month.
The White House put forth a $49 billion supplemental request for the budget next year, for items like extra funding for the war in Ukraine, but did not include a request for further funding on childcare. It did, however, mention that it’s important Congress take action separately on childcare.
“I don’t think the supplemental is necessarily the path there,” Bernstein told Yahoo Finance. “I think we need to implement legislative solutions and there’s no reason why Congress shouldn’t support this.”
The White House added in a statement that “in addition to the supplemental request, the administration also believes that the Congress must act quickly to ensure continued funding for programs that lower costs for families, such as expanded access to affordable, high-quality childcare and high-speed internet.”
Childcare providers could use funds for personnel costs, rent or mortgage payments, insurance, facility maintenance, and mental health support for children.
“We know that countries that invest more in this have higher female labor force participation rates,” said Bernstein. “We’re really pushing Congress to really make the investments again.”
Boston Fed President Susan Collins told Yahoo Finance in an exclusive interview from Jackson Hole that a lack of affordable childcare is contributing to the gender wage gap for women.
“Lack of affordable, available quality childcare is a huge issue,” Collins said. “It’s something that we have quite a bit of research [on] and have looked at over time. It’s one of the things that is an impediment, particularly for mothers, particularly for parents more generally. Addressing that over time, which again, is going to take many across the economy working together.”
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