According to a recent AEI survey, access to childcare services is one of the main barriers preventing parents from going back to jobs. Among the unemployed with children, 60 percent of mothers and 18 percent of fathers said they weren’t working due to care responsibilities.

Childcare was in short supply even before COVID-19. The pandemic, however, widened the gap. Two-thirds of childcare centers closed in April 2020 and around one-third remain closed, many permanently. Among open centers, 81 percent enroll fewer children than they did pre-pandemic. Compared to pre-pandemic, 166,800 fewer people work in childcare. Getting providers back to work is likely a prerequisite for getting parents back to work, especially in industries such as hospitality, leisure, and other service sectors that are disproportionately staffed by women.

Affordable childcare, especially for low-income families, is a perennial issue. The 1996 welfare reform bill established the $5 billion Childcare Development Block Grant which subsidizes care for children in low-income families transitioning from welfare to work and offsets the cost of childcare among low-wage workers. Congress might consider increasing funding for this program, but, in the context of tight childcare supply, more money might also end up translating into higher costs without creating additional slots.

Reopening schools, work-from-home and hybrid schedules, and employer financial support for childcare are important parts of the solution. More than half of companies already provide some form of subsidies for childcare. Some companies, like McDonalds, are offering emergency childcare programs as “sweeteners” to bring workers back. Patagonia is implementing on-site daycare which improves drop-off and pick-up efficiency and promotes parent-child contact during the workday. Given enough time, these kinds of market-based efforts hold the potential to narrow the care gap without big, new federal policy and spending.

The Biden administration, however, has decided not to let this crisis go to waste. As part of its American Families Plan, the White House is asking for $200 billion to fund universal pre-K, another $225 billion for childcare, and a nationally-mandated $15 per hour minimum wage for daycare workers.

Setting aside whether this spending is affordable, there are a number of potential problems with the Biden approach. As Senator Mitt Romney argued, the proposal’s bias for center-based childcare tilts the playing field against families in which one parent stays home. Perhaps more importantly, the scale of the intervention in the childcare market risks disrupting the self-directed responses that families and businesses are already undertaking to find childcare that meets their own needs.

Advocates of Biden’s plan are rightly concerned about the plight of millions of low-income children who are in need of more and better early-life care. The mistake they are making is believing that such a massive rewriting of America’s early childhood social contract can be undertaken with only benign results. The childcare unknown unknowns ought to be pointing us back to smaller and more targeted initiatives that can, by trial and error, get us where we are trying to go.

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