Still, White House press secretary Jen Psaki on Wednesday said the administration strongly disagrees with the analysis, which calculated a higher cost for the proposals than the White House factored in.
A big reason for the difference is the Wharton team used the full cost of free preschool and two free years of community college even though the administration expects states to share the tab.
“How are states going to pay for it? Are they going to increase taxes?” said Rich Prisinzano, director of policy analysis for the Penn Wharton Budget Model. “That’s all going to have an effect.”
Another costly component is an extension through 2025 of the enhanced child tax credits that were passed in Biden's $1.9 trillion American Rescue Plan. Biden also wants to pay for child care for the neediest families and ensure that those who earn up to 1.5 times their state median income won’t have to pay more than 7% of their income on child care.
In Massachusetts, a two-parent household has to spend an average of 15% of income on care for one child, according to the White House. In Indiana, where child care is about half as expensive but incomes are lower, a household spends an average of 12% of income.
Women’s participation in the workforce is one of the lowest rates for developed economies because of the high cost of child care and of caring for other needy family members, according to Moody’s. In Massachusetts and Indiana the workforce gender gap is 23%, meaning mothers' participation rate is 23 percentage points lower than fathers', according to the White House.
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