The White House’s reported plot to redirect funding from the Child Care and Development Block Grant subsidies for working parents to families with one stay-at-home parent is best understood as an 11th-hour political ploy to bolster Republicans’ odds in the midterm elections, but a gambit that is unlikely to stand up in court. Because the law, as passed by Congress, allows childcare subsidies to go to only “a parent or parents who are working or attending a job training or educational program” to serve “only as payment for child care services,” the executive branch will likely be stopped in court as quickly as Nancy Pelosi can speed-dial Marc Elias.
But the draft proposal matters less for 2026 than it does for 2028. And considering that top surrogates of JD Vance, who reportedly orchestrated the attempted reform, have pretty directly tethered it to the vice president’s future ambitions, it’s worth considering the policy seriously.
The CCDBG costs about $12 billion per year to fund childcare for about 1.6 million children from fewer than a million families. Each family receives subsidies equivalent to an average of $1,000 per month that goes to childcare while either both parents or the single parent work or attend job training. The CCDBG was designed very explicitly as a welfare program to help get low-income parents off government dependency over time. As the Congressional Research Service wrote this year about the program’s 1996 reform, the current CCDBG was “intended to support an overall goal of promoting self-sufficiency through work” and transition parents from “welfare to long-term employment and independence.”
As a policy platform written in 1996, it was statutorily intended not to bankroll stay-at-home parents. But as a political platform in 2026, the stay-at-home mom subsidies are antithetical to the Trump administration’s overriding goal of tackling the affordability crisis.
Although inflation is down from its near-double-digit high under Joe Biden, it remains nearly 50% higher than the Federal Reserve’s maximum 2% target. The hangover from Bidenomics, combined with the recent short-term supply shocks from the Iran war, has resulted in real average weekly wages that are actually 1.3% lower than they were in fall 2020. And entrenched inflation expectations have resulted in a disaster for both federal and commercial borrowing. The U.S. government now pays an average interest rate of 3.475% on its $40 trillion national debt, a rate more than double what it paid five years ago. This bond market meltdown has directly led to elevated interest rates for mortgages, credit cards, and auto loans. Looming in the background of all of this is the ticking time bomb of our old-age entitlements: As the Social Security worker-to-retiree ratio dwindles from 3-to-1 down to 2-to-1, we are now just six years away from Social Security hitting insolvency and triggering an automatic, across-the-board 28% benefit cut.
Why do I mention the $30 trillion U.S. bond market and our $40 trillion debt when talking about a $12 billion program that constitutes a mere rounding error on our annual $2 trillion deficit? Because President Donald Trump’s entire theory of the American economy — that we only need to cut welfare, not entitlements, while still ending the cost-of-living crisis — is contingent on robust economic growth.
Specifically, to avoid a fiscal crisis, we need our real GDP growth rate to remain higher than the real interest rates Uncle Sam must pay to Treasury investors. In an economy with 1.2% of the population retiring each year and amid the most successful mass deportation operation in the nation’s history, the only way for economic growth to outpace interest rates is to achieve greater productivity gains and maximize labor force participation.
The Trump administration has boldly backed the first half of that formula with its robust defense of data center expansion and support for artificial intelligence, without which the U.S. economy would likely be in a recession. But the CCDBG proposal would constitute a costly failure on the second half of that mandate.
Redirecting CCDBG funds from working parents to non-working ones would transform a temporary welfare program designed to get low-income parents off government benefits into a permanent subsidy that artificially suppresses the labor force. If the fiscal hawks got their way when George Bush wanted to privatize Social Security or Paul Ryan got to cut Medicaid, the government wouldn’t need to have an interest in whether a $12 billion program funded moms who worked or moms who didn’t. But if we are going to finance a $40 trillion national debt, sustain a $2 trillion deficit without touching our already-extant entitlements, and somehow bring inflation back down to 2% while doing it, we cannot create a new entitlement to pay prime-age adults to stay home.
Last month, Vance mocked columnist Marc Thiessen, implying that he was overweight because Thiessen had objected to the notion that burritos these days cost $20. The now-infamous Burrito Discourse was based on the grievance that a $20 burrito — a price you can only generate if you DoorDash a restaurant order to your home — is evidence that affordability has hit apocalyptic levels. Vance has called on the Fed to lower the federal funds rate, arguing that the central bank is “responsible” for lowering interest rates so more Americans can afford homes, even though the Fed no longer controls the long end of the curve. Even in a campaign text asking for donations, Vance lamented that groceries “cost what they cost.” Vance, arguably more than anyone else in the Trump administration, has acknowledged that voters consider affordability their No. 1 priority.
And if you want to restore affordability while conducting mass deportations and preserving existing entitlements, that means, at a minimum, not spending taxpayer dollars to keep American citizens out of the workforce. This would especially be perverse if it came at the expense of single parents who, in the absence of CCDBG, would be indefinitely unemployed and thus permanently stuck on welfare.
I have plenty of quibbles with how the commentariat has turned a $12 billion proposal into their evidence that, actually, women en masse are entitled to taxpayers bankrolling an extended maternity leave.
But as far as the actual, practical policy is reportedly written, it runs counter to the supposed top priority of the administration: tackling affordability. A family can and should decide if choosing for one parent to stay at home is best for them, but this policy is not worth the cost — a dwindling class of taxpayers wrung dry.