The average American family now spends $14,760 a year on infant center-based care, nearly triple the 7% of household income the federal government itself defines as "affordable." In April 2026, President Trump said it was "not possible" for the federal government to pay for daycare, then his administration froze $2.4 billion from the Child Care and Development Fund, the main federal program that helps low-income families afford care at all.
He made the opposite promise during the campaign. At the New York Economic Club in September 2024, Trump told Reshma Saujani, founder of Moms First, "We have to have child care." Six months into his second term, that promise is gone, and so is the funding.
A Market That Does Not Work on Its Own
Childcare is the clearest example of a market that cannot self-regulate into affordability. Providers charge families $1,230 per month for infant care on average, yet the median childcare worker earns under $16 an hour. The money families pay does not translate into living wages for the people doing the work, and it does not translate into enough supply either. Roughly 4.2 million childcare slots are missing nationwide. Nearly half of all children in the United States live in a childcare desert, a ZIP code where licensed slots cover fewer than a third of the children who need them.
The reason is structural. Childcare is labor-intensive and cannot be automated. One caregiver can watch only so many infants. That ceiling on productivity means the industry cannot reduce costs through scale the way a factory or a software company can. Without public subsidy, the price stays high, wages stay low, and providers close anyway. The pandemic shuttered an estimated 16,000 childcare providers. Many never reopened.
Sixty-eight percent of childcare providers reported liability insurance cost increases in 2025. Sixty-six percent saw property insurance hikes. Forty-four percent saw rent go up. They face these rising costs while public funding is being cut. The result is a system being squeezed from both ends, and families absorb the gap.
"If they don't pay for child care, then they can't work, and if they can't work, then they can't pay rent." Families caught between these two walls describe the bind as a trap with no private-sector exit.
What Congress Just Did
The House Republican budget bill flat-funds the Child Care and Development Fund for FY2026. Flat-funding sounds neutral. It is not. When costs rise 5 to 8 percent annually, flat funding is a real-dollar cut. Families who were already on waiting lists stay on waiting lists. The bill also eliminates the Child Care Access Means Parents in School program (CCAMPIS), which helped low-income parents stay enrolled in college, and eliminates the Preschool Development Grant (PDG), which funded planning and expansion of state pre-K systems.
These cuts accompany a broader HHS budget that the administration proposed at $93.8 billion, a 26.2 percent reduction from current spending levels. The same budget that defunds childcare increases total defense spending to $1.5 trillion, a 44 percent jump. These are choices, not accidents. When the government decides to freeze $2.4 billion for child care while adding hundreds of billions to the Pentagon, it is stating, in numbers, who it governs for.
The United States remains the only OECD member country without a national paid parental leave program. Germany, Canada, Japan, and the United Kingdom all provide paid leave at the federal level. Fourteen U.S. states have filled the gap with their own programs, but workers in the other 36 states get nothing from the government when a child is born. That gap costs families at the worst possible economic moment.
The Policy That Actually Fixes This
The solution is not complicated. It is expensive, and that is the real objection.
Polling from the First Five Years Fund shows 82 percent of voters support federal funding to lower childcare costs. That includes large majorities of Republicans. The demand is there. The political will, under the current Congress and administration, is not.
What works, based on the evidence from countries that have done it: public subsidy that caps family costs at 7 percent of income (the federal government's own threshold), direct investment in the childcare workforce to raise wages above poverty, and national paid parental leave that gives newborn families breathing room in the first weeks of life without sacrificing a paycheck. These are not radical ideas. They are standard policy in every wealthy democracy except this one.
The objection that markets should solve this is answered by 40 years of markets failing to solve it. The objection that government cannot afford it is answered by the $1.5 trillion defense budget signed in the same fiscal year. This country is not too poor to support working families. It has spent that money on other things.
Governors in at least 30 states cited childcare affordability in their 2026 State of the State addresses. The political center of gravity on this issue is not ideological. It is practical. Parents across the income spectrum are spending 20 percent of their household income on care for one child, nearly three times what the government considers affordable, and they are doing it in a country that just froze the program designed to help them.
That is an economic failure. It is also a political choice. And the people who made it are the same ones who promised on the campaign trail to fix it.
Sources
- Washington Post: Trump's reversal on day care upends bipartisan push to lower costs (April 15, 2026)
- Washington Post: Trump backs off campaign promises to protect Medicare, help with child care (April 2, 2026)
- The Imprint: Trump Administration Freezes Billions in Social Services, Child Care Funding
- The Century Foundation: Trump and Republicans in Congress Are Making the Child Care Crisis Even Worse
- Economic Policy Institute: Child Care Costs in the United States
- Center for American Progress: America's Licensed Child Care Deserts
- First Five Years Fund / Politico: Child Care Costs Are Driving the Affordability Debate in 2026 (March 2026)
- Child Care Aware of America: What's Next for FY26 — Child Care Level-Funded in Trump Administration's Budget Request
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