This post was written by Mark Shriver and Mike McGavick, CEO of XL Catlin, and was originally published in RealClearPolicy on January 19, 2017.
In our increasingly divided nation, there is one issue that private businesses, nonprofits, both Republicans and Democrats in Congress, and the incoming administration all agree on: increasing access to early childhood education.
High-quality early education is one of the most effective means for helping children escape poverty. It leads to higher graduation and employment rates, and it helps build a workforce better prepared for the challenges and opportunities created by technological innovation and productivity gains. Simply put, greater investment in the early education of disadvantaged children lays the foundation for their future success. It also has tangible benefits for society.
Nobel Laureate economist James Heckman released a report in December that estimates the annual rate of return on investments in high quality birth-five programs for disadvantaged children can deliver a 13% return on investment. Improved outcomes in education, health, sociability, and economic productivity as well as reduced crime underscore the obvious truth that by investing in all our kids, we are investing in the security and prosperity of our nation.
Yet, despite clear and convincing evidence that providing early education is in all Americans' best interests, fewer than half of children in low-income families have access to it. To remedy this deficiency, we have to identify resources to bring these education-based interventions to scale.
President-elect Donald Trump has spoken about the need to address the rising cost of child care and to bring education reform and opportunity to all of America's children, especially those in poverty. However, both the political will and the policies to finance the expansion of these critical investments have so far been missing.
We were pleased to co-chair an Early Childhood Education "Action Tank" to help supply both. The Action Tank, convened by Save the Children Action Network, or SCAN, is an alliance between children's advocacy groups and business and financial institutions that recognizes the urgent need to support early education for every child who needs it. In addition to SCAN and XL Catlin, the list of partners in the Action Tank includes Goldman Sachs, PNC Financial Services Group, Pearson, First Five Years Fund, First Focus, Institute for Child Success, and the YMCA. We all agreed on a series of recommendations to finance early learning programs as part of the comprehensive reform of the federal tax code anticipated from the incoming administration and the 115th Congress.
Given the scarcity of federal funds in this era of high budget deficits and national debt, the Action Tank believes reforms to the tax code offer the best way to secure the funding to meet this challenge. Making a significant investment in early childhood education is not without cost. But we believe the cost of deferring this investment will prove even greater.
Changes in the labor market and the increased number of single-parent households have left many American families under great strain to meet the demands of work and parenting. Expanding access to early childhood education is essential for relieving that strain. It is also a pro-growth economic strategy and a wise investment for the business community.
We propose specific recommendations for lawmakers that build on what is "right" in existing tax policy. These include: expanding tax credits and deductions for early childhood education; expanding municipal bonds, expanding the use of social impact financing, also known as Pay for Success; and having parity for tax deferments for paying for early education like we now do to pay for college. We also affirm the vital importance of federal government safeguards to ensure all programs are built to meet high standards of performance and accountability, and achieve the best outcomes.
The Action Tank is committed to working with Congress and the incoming Trump Administration, including the Department of Education and the Department of Health and Human Services, to employ these ideas for making early education a reality for all the kids and families who need it most.
The time to act is now. Every American child deserves a fair chance to live a secure, prosperous and fulfilling life, regardless of background or circumstances of birth. Investing in our children is a smart investment in the future of our economy and our nation.
Mike McGavick is CEO of XL Catlin and Mark Shriver is President of Save the Children Action Network. They co-chair the Early Childhood Education Action Tank.
Note: This post has been updated with corrected information about the annual rate of return on investments in high quality birth-five programs for disadvantaged children, according to Nobel Laureate economist James Heckman.