Childcare doesn’t need more subsidies. It needs less red tape

Last week, a New Mexico judge upheld the state’s universal childcare program, a victory for those who see greater public spending as the key to making childcare affordable. But there is a better way to lower costs: Reducing the regulations that make childcare so expensive in the first place.

Consider the recent overhaul of the childcare policy landscape by Assistant Secretary for Family Support Alex J. Adams, who leads the Administration for Children and Families (ACF) and recently unveiled a package of deregulating reforms. He is hardly the radical that critics, who argue his efforts would “endanger the children”, claim.

At a time when too many policymakers want to throw taxpayer money at the problem of expensive childcare without tackling the underlying cost drivers, reforming regulations represents simple common sense.

The new Child Care and Development Fund (CCDF) flexibilities aim to give states and childcare providers greater choices to expand access and improve affordability by clarifying that “eligible child care provider” should be interpreted broadly. This approach gives families more freedom to choose the care arrangements that work best for their unique needs, including smaller or faith-based daycares as well as care provided by neighbors, friends, or family members.

The ACF also clarified that Temporary Assistance for Needy Families funds may be used more flexibly to support a wider range of childcare arrangements than in the past.

The ACF also reversed Biden-era CCDF policies that favored grants and contracts over parent-directed vouchers, giving states greater leeway and parents more options, and undid onerous Biden-era Head Start requirements as well.

Soaring childcare costs have become a widely held, bipartisan concern, and even on the Left some now recognize the role of overregulation in hampering daycare operations.

Childcare regulation has become so all-encompassing, micromanaging every minute detail of the activity. Congresswoman Marie Gluesenkamp-Perez (D-WA) recently took aim at rules that make it illegal for childcare workers to peel bananas, oranges, and other fresh fruits in daycares. When even an elected member of a political party not exactly known for its hostility to regulations is pushing for reform, it’s clear that regulators have overreached.

As a mother of young children, I’ve seen childcare overregulation up close. When searching through the website listing code violations for each daycare in our state, my husband and I were shocked to find that every daycare in our area had a lengthy rap sheet of citations.

CORRECTS LAST NAME ABC Learning Center director Ahmed Hasan stands in the infant room at his daycare center, in Minneapolis, Minn., on Wednesday, Dec. 31, 2025. (AP Photo/Mark Vancleave)

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A typical violation might read, “An outlet did not have a protective cover. The children were not in the classroom at the time, and the outlet was high up on the wall outside of the children’s reach.” Another common type of violation across many daycares and preschools involved a teacher briefly stepping out of a classroom still staffed by several other teachers, thus momentarily violating strict child-to-staff ratio requirements.

If each daycare had violations listed, did that really mean that every single provider, from large childcare centers to small in-home daycares, was unsafe? Of course not. When every student fails a test, the problem isn’t the students: it’s the test. The standards for daycare operators have become practically impossible to meet.

By driving up compliance expenses and limiting provider supply, extreme overregulation contributes to sky-high childcare costs, a problem that policymakers across the political spectrum recognize and decry. Too often, the proffered solution is subsidizing demand with tax dollars, which does nothing to cut at the root causes of childcare costs that many families struggle to afford.

The ACF’s announced reforms, on the other hand, are likely to beget real progress on childcare affordability by taking on the sprawling regulations complicating daily operations for providers and raising costs for American families.

Despite critics’ fears that without strict government mandates on things like child-to-staff ratios, daycares will descend into dangerous chaos, real-world evidence shows no such thing. Several countries, such as Denmark (not exactly a model of small government), Spain, and Sweden, do not specify any maximum number of children per childcare staffer. Their example proves that childcare systems can still operate safely and effectively without such regulations. Research suggests that granting staff members the flexibility to look after even one additional child can lower costs by up to 20%.

CONGRESS SHOULDN’T CREATE ANOTHER NEWBORN BENEFIT

The general thrust of the recent reforms is to allow exactly that kind of cost-lowering flexibility by returning greater decision-making authority to states, providers, and parents. While New Mexico is doubling down on subsidies, Washington is trying something different.

Policymakers serious about affordability should see childcare deregulation for what it is: not some radical move but the clearest path to lower costs, broader access, and safe, reliable care for working families.

Chelsea Follett is a policy analyst in the Cato Institute’s Center for Global Liberty and Prosperity and a visiting fellow at Independent Women.