Democrats Say They Learned From Obamacare And Are Designing Childcare Programs That Republicans Can’t Say No To

Republican governors have spent a decade warring against Affordable Care Act provisions. Democrats are trying to prevent a repeat for their new childcare programs.

WASHINGTON — As they work toward passing their landmark childcare and prekindergarten programs, Democrats are trying to avoid a problem that popped up under former president Barack Obama: What happens if you pass a major social program but Republican states just ignore it?

The Build Back Better Act currently in the Senate would put hundreds of billions of dollars toward capping childcare costs for parents at 7% of their income — the current average cost for a family raising a 5-year-old is twice that — as well as providing universal free kindergarten for 3- and 4-year-olds.

These measures would transform the childcare landscape across the country. The White House projects 6 million new children to be eligible for prekindergarten and childcare access would be expanded to 20 million children.

But there’s a catch: The bill sends funding to the states to build and expand on their programs. The last decade of Obamacare has shown that Republican-run states often won’t play ball with Democratic programs, even if that means turning down huge sums of federal cash.

After the passage of the Affordable Care Act, many red states rejected federal funds to expand Medicaid rolls to cover people with low incomes. To this day, an estimated 2 million people across a dozen states do not have health insurance because their state governments refuse to expand Medicaid.

In Congress, Republicans are fighting tooth and nail against the childcare and pre-K provisions, arguing they raise costs and take away the rights of parents. They’re trying to fold the issue into a parental rights campaign that they see as propelling them to an underdog victory in the Virginia gubernatorial race. “Parental rights is an issue that we can run on and win on when it comes to education,” said Rep. Elise Stefanik, the third-ranking member of House GOP leadership, the day after the Virginia race.

But it’s not the Republicans in Congress who ultimately matter, it’s the ones running state governments. And Democrats are banking on avoiding another Medicaid situation by crafting childcare to be much more unpalatable for Republican governments to undermine.

“I believe that it would be very hard for states to not allow access,” said Senate Health Committee chair Patty Murray. “Why would a governor not want childcare for their kids? They will have to answer to their own citizens.”

The bill allows local jurisdictions to do an end run around their state. If Texas, say, refuses to enact childcare or pre-K, cities like Austin and Houston can apply for federal funding for their own programs.

According to Democratic staff involved in drafting the bill, this is designed to maximize pressure on the state governors. Not only would they have to explain why their residents are paying more for childcare than the people one state over, but they’d also have to defend causing some of their own constituents to pay more than others.

Whereas Medicaid expansion affected families with low incomes — those with income up to 138% of the poverty line — the childcare provisions will hit a broad swath of the middle class. Those at 125% of their state’s median income will qualify for childcare subsidies in year one. That rises to 250% of the median state income by year three, when the program is fully phased in. Republicans did not appear to pay any penalty at the ballot box for denying Medicaid expansion, but Democrats say it will be a much different calculus to deny childcare programs to a large chunk of their voters.

Despite all this, some Democrats will openly say they expect holdouts.

“This is the new reality that the Republican party has decided it’s going to be against anything that has a Democratic president’s name associated with it. This is a problem that’s bigger than just childcare,” Sen. Chris Murphy said.

The party is also facing criticism from the left for underfunding the programs. To appease conservative members of their party, like Sens. Joe Manchin and Kyrsten Sinema, Democrats cut their initial $3.5 trillion Build Back Better Act roughly in half. That meant gaming the funding for many priorities, including childcare.

Under the current wording of the bill, states would receive set amounts of funding for three years to set up childcare and prekindergarten programs. For the next three years, Washington will kick in 90% of the childcare costs while the states must match 10%. The federal government will cover 90% of the costs for prekindergarten in year four, then 75%, then 60%.

In both cases, funding expires entirely in year seven. Democrats don’t actually expect these programs to end but had to write in early sunset clauses to lower the long-term costs of the bill. The hope is that the government of the day will pass new funding to extend them.

Matt Bruenig, founder of the People’s Policy Project, said the bill contains insufficient funding to hire enough people and create enough centers to fulfill the party’s goals, and the uncertainty around future funding gives Republicans cover to simply opt out.

“There’s nothing stopping states from investing in childcare already,” Bruenig said. “This is an incentive program for states to do this. Is it enough of an incentive given that some Republicans will oppose it for political reasons? Probably not.”

He said allowing local governments to circumvent their state “shows that they are aware of the problem. It shows that they’ve put a little bit of thought into fixing it. But then they didn’t really put enough money into it at all.”

The Obamacare experience does offer some positive signs for Democrats. Republicans ultimately failed to repeal the law and to switch Medicaid to a block grant program. Eventually, 10 states gave in and agreed to expand Medicaid rather than continue turning down federal funds. If a program that embattled, benefiting the least powerful group of people, was able to survive, Democrats are hoping ones benefiting middle-class children will have far better prospects.

But one key difference is that Republicans had to actively repeal Obamacare provisions because they were funded on a permanent basis. If a Republican president or Congress emerges in 2026, they can just let these programs expire by doing nothing. Democrats are making a bet that the childcare programs will be so popular by then that it will be politically poisonous to let them end.

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