New evidence emerged today on the debate over whether government spending is killing or saving our economy. Peter Goodman’s New York Times piece, " Cuts to Child Care Subsidy Thwart More Job Seekers ," provides yet another piece of evidence for why deficits in the short-term are a net good for our economy.
Mr. Goodman tells the story of mothers who need access to affordable (and let’s hope safe and enriching) child care, but who cannot afford it with the jobs that they are able to get. This puts them in a bind: Essentially, they "cannot afford" to work, but they also cannot afford to go without a job because they need the income.
With the recession affecting men’s jobs more than women’s, ensuring that women with children have access to employment is more important than ever . Policymakers have recognized the disconnect between the cost of child care and the expectation that mothers should work. The Child Care and Development Block Grant provides child care subsidies to help low-income families afford care while they work. While this has not been enough to address the needs of all families who need help, it has helped low-income parents find affordable child care. The Obama Administration has proposed the largest one-year increase in this program’s funding, on top of increases through the American Recovery and Reinvestment Act.
But the Great Recession has threatened this program on the state level, as Mr. Goodman describes in his article: "Despite a substantial increase in federal support for subsidized child care, which has enabled some states to stave off cuts, others have trimmed support, and most have failed to keep pace with rising demand, according to poverty experts and federal officials."
Basically, the recession has led to significant declines in tax revenues. States are strapped. They are cutting benefits for the most vulnerable. These cuts are having the effect of not only increasing poverty (those who can’t get a job because they can’t afford child care will have lower incomes), but also reducing the ability of those who can find work to keep it.
This should be in the dictionary under pound-wise, penny foolish. People on unemployment don’t pay as much in taxes as those with jobs. By not providing continued aid to state and local government, Congress is merely exacerbating the length and depth of this Great Recession for working families.