Government Red Tape Drives Up Childcare Costs — Not Lack of Subsidies

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A New Mexico judge upheld the state’s universal childcare program last week, handing a win to those who think throwing more taxpayer money at the problem will make childcare affordable.

But there’s a better way: cutting the regulations that made childcare unaffordable in the first place.

Assistant Secretary for Family Support Alex J. Adams recently unveiled a package of deregulating reforms through the Administration for Children and Families. Critics claim his efforts would endanger children — but the evidence tells a different story.

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

The new Child Care and Development Fund flexibilities give states and childcare providers greater choices to expand access and improve affordability. Families now have more freedom to choose care arrangements that work best for their needs — including smaller daycares, faith-based providers, and care from neighbors, friends, or family members.

Granting staff members the flexibility to look after even one additional child can lower costs by up to 20%.

The ACF reversed Biden-era policies that favored grants and contracts over parent-directed vouchers. The reforms also undid onerous Biden-era Head Start requirements.

Even the Left now recognizes the role of overregulation in hampering daycare operations. Congresswoman Marie Gluesenkamp-Perez took aim at rules that make it illegal for childcare workers to peel bananas, oranges, and other fresh fruits in daycares.

When searching through code violations for each daycare in our state, every single provider in our area had a lengthy rap sheet of citations.

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

A typical violation: “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 violation involved a teacher briefly stepping out of a classroom still staffed by several other teachers — momentarily violating strict child-to-staff ratio requirements.

When every daycare has violations listed, the problem isn’t the daycares — it’s the standards.

By driving up compliance expenses and limiting provider supply, extreme overregulation contributes to sky-high childcare costs. Too often, the proffered solution is subsidizing demand with tax dollars — which does nothing to cut at the root causes.

Real-world evidence from countries like Denmark, Spain, and Sweden shows childcare systems operate safely and effectively without mandating maximum child-to-staff ratios.

The ACF’s reforms return greater decision-making authority to states, providers, and parents. While New Mexico doubles down on subsidies, Washington is trying something different.

Policymakers serious about affordability should see childcare deregulation for what it is: the clearest path to lower costs, broader access, and safe, reliable care for working families.