The Public Option

by Ganesh Sitaraman

  30. Senate Committee, at 2, 5.

  31. Coy F. Cross II, Justin Smith Morrill: Father of the Land-Grant Colleges 84 (1999).

  32. Allan Nevins, The State Universities and Democracy 16–17 (1962).

  33. Pew Research, “The Rising Cost of Not Going to College” (Feb. 11, 2014).

  34. National Center for Education Statistics, “Fast Facts: Graduation Rates,” https://nces.ed.gov/fastfacts/display.asp?id=40 (last visited Oct. 21, 2018). According to the U.S. Department of Education, for full-time students starting a four-year undergraduate bachelor’s program in 2010, the six-year graduation rate was 59 percent at public universities, 66 percent at private nonprofits, and only 26 percent at private for-profits.

  35. Tennessee Promise, http://tnpromise.gov/about.shtml.

  36. Tennessee Reconnect, www.tn.gov/thec/bureaus/academic-affairs-and-student-success/adult-learner-initiatives/tn-reconnect.html.

  37. Executive Office of the President, “America’s College Promise: A Progress Report on Free Community College” 5 (Sept. 2015), www.acct.org/files/Advocacy/Progress%2BReport%2Bon%2BCommunity%2BCollege.pdf.

  38. White House, “Factsheet: White House Unveils America’s College Promise Proposal: Tuition-Free Community College for Responsible Students” (Jan. 9, 2015), https://obamawhitehouse.archives.gov/the-press-office/2015/01/09/fact-sheet-white-house-unveils-america-s-college-promise-proposal-tuitio; Baime & Baum, “Community Colleges.”

  39. College for All Act, S. 1373, 114th Congress (2015–2016), www.congress.gov/bill/114th-congress/senate-bill/1373/text; Fact Sheet, The College for All Act, https://www.sanders.senate.gov/download/the-college-for-all-act-fact-sheet?id=A2524A5A-CA3F-41F8-8D93-DD10813DC384&download=1&inline=file.

  40. John Quincy Adams, Message to Congress (Dec. 6, 1825), www.presidency.ucsb.edu/ws/index.php?pid=29467.

  41. George Thomas, The Founders and the Idea of a National University: Constituting the American Mind 21 (2014).

  42. Albert Castel, “The Founding Fathers and the Vision of a National University,” 4 History of Education Quarterly 280, 280, 282–83 (1964).

  43. Thomas, Founders and the Idea of a National University, at 3.

  44. Thomas, Founders and the Idea of a National University, at 73.

  45. See, for instance, University of Connecticut, eCampus, http://ecampus.uconn.edu/courses.html.

  9. Banking

  1. The classic on fringe banking is John P. Caskey, Fringe Banking: Check-Cashing Outlets, Pawnshops, and the Poor (1994). For a more recent account on the unbanked and underbanked, see Lisa Servon, The Unbanking of America (2017).

  2. Federal Deposit Insurance Corporation, “2015 FDIC National Survey of Unbanked and Underbanked Households” 1 (Oct. 20, 2016), www.fdic.gov/householdsurvey/2015/2015report.pdf (hereinafter FDIC 2015).

  3. For a discussion of these avenues, see Mehrsa Baradaran, How the Other Half Banks: Exclusion, Exploitation, and the Threat to Democracy 64–101 (2015).

  4. Caskey, Fringe Banking, at 27–30.

  5. Caskey, Fringe Banking, at 36.

  6. Caskey, Fringe Banking, at 87–88.

  7. Caskey, Fringe Banking, at 89.

  8. Caskey, Fringe Banking, at 88–89.

  9. Caskey, Fringe Banking, at 97–100.

  10. Caskey, Fringe Banking, at 86–87 (noting the increase in households without bank accounts rising from 6.5 million in 1977 to 11.5 million in 1989).

  11. FDIC 2015, at 3.

  12. FDIC 2015, at 4.

  13. Baradaran, Other Half, at 142–43.

  14. Baradaran, Other Half, at 143.

  15. FDIC 2015, at 9, 34.

  16. FDIC 2015, at 7.

  17. FDIC 2015, at 52.

  18. Baradaran, Other Half, at 174–75.

  19. Council of Economic Advisers, “Issue Brief: Financial Inclusion in the United States” 2 (June 2016), https://obamawhitehouse.archives.gov/sites/default/files/docs/20160610_financial_inclusion_cea_issue_brief.pdf. Baradaran, Other Half, at 138 (suggesting it might be as much as 10 percent).

  20. Baradaran, Other Half, at 138.

  21. Council of Economic Advisers, “Issue Brief,” at 2.

  22. Caskey, Fringe Banking, at 32.

  23. Alan M. White, “Banks as Utilities,” 90 Tulsa Law Review 1241, 1268–1269 (2016).

  24. Mehrsa Baradaran, “Banking and the Social Contract,” 89 Notre Dame Law Review 1283, 1286 (2014). For a public utility framing that stresses a similar point, see White, “Banks as Utilities,” at 1270. (“If we regard banks as public utilities providing essential services, then the present model of banking regulation, with a primary focus on safety and soundness and a secondary focus on consumer protection and community reinvestment, is built on an incomplete set of public goals.”)

  25. John Anderson, “Why Canada Needs Postal Banking” 28–29, Canadian Centre for Policy Alternatives (Oct. 2013), policyalternatives.ca/sites/default/files/uploads/publications/National%20Office/2013/10/Why_Canada_Needs_PostalBanking.pdf. Canada’s system ended in 1968.

  26. Anderson, “Why Canada Needs Postal Banking,” at 43–44.

  27. Anderson, “Why Canada Needs Postal Banking,” at 53–55.

  28. Maureen O’Hara & David Easley, “The Postal Savings System in the Depression,” 39 Journal of Economic History, 741, 742 (1979); Edwin W. Kemmerer, Postal Savings 2 (1917).

  29. Kemmerer, Postal Savings, at 10–11.

  30. United States Postal Service (USPS), “Postal Savings System” 1, https://about.usps.com/who-we-are/postal-history/postal-savings-system.pdf (hereinafter USPS).

  31. USPS, at 1.

  32. USPS, at 2.

  33. Mehrsa Baradaran, “A Short History of Postal Banking,” Slate (Aug. 18, 2014).

  34. Office of Inspector General, U.S. Postal Service, “Providing Non-Bank Financial Services for the Underserved” 5 (Jan. 27, 2014), www.uspsoig.gov/sites/default/files/document-library-files/2015/rarc-wp-14-007_0.pdf (citing Nelson D. Schwartz, “Bank Closings Tilt Toward Poor Areas,” New York Times (Feb. 22, 2011), and David Hayes et al., “Banks Follow the Money and Exit Lower-Income Areas,” SNL Financial (Apr. 27, 2012), http://www.snl.com/InteractiveX/ArticleAbstract.aspx?id=14485078).

  35. Office of Inspector General, “Providing Non-Bank Financial Services,” at 6.

  36. Baradaran, Other Half, at 210–227; Elizabeth Warren, “Coming to a Post Office near You: Loans You Can Trust?,” Huffington Post (Feb. 1, 2014).

  37. Matthew Yglesias, “A Public Option for Banking,” ThinkProgress (Jan. 16, 2011); Catherine Martin Christopher, “Mobile Banking: The Answer for the Unbanked in America?,” 65 Catholic University Law Review 221 (2015).

  38. Pew Research Center, “Mobile Fact Sheet” (Jan. 12, 2017), www.pewinternet.org/fact-sheet/mobile.

  39. Morgan Ricks, John Crawford, & Lev Menand, “Central Banking for All: A Public Option for Bank Accounts,” Great Democracy Initiative (June 2018).

  40. Morgan Ricks, “Money as Infrastructure” (draft of May 30, 2018), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3070270); White, “Banks as Utilities.”

  41. Adam Levitin, “The Public Option in Banking,” CreditSlips (Feb. 4, 2014), www.creditslips.org/creditslips/2014/02/the-public-option-in-banking.html.

  42. Pew, “Payday Lending in America: Who Borrows, Where they Borrow, and Why” 4 (July 2012), www.pewtrusts.org/~/media/legacy/uploadedfiles/pcs_assets/2012/pewpaydaylendingreportpdf.pdf.

  43. Council of Economic Advisers, “Issue Brief,” at 5.

  44. Pew, “Who Borrows,” at 7.

  45. Office of Inspector General, “Providing Non-Bank Financial Services,” at 13.

  46. Anderson, “Why Canada Needs Postal Banking.”

  47. Mehrsa Baradaran, “It’s Time for Postal Banking,” 127 Harvard Law Review Forum 165, 165 n. 6 (2014) (citing Michael Barbaro, “Bankers Oppose Wal-Mart as Rival,” New York Times [Oct. 15, 2005]).

  48. Office of Inspector General, “Providing Non-Bank Financial Services,” at 14–
15.

  10. Child Care

  1. U.S. Bureau of the Census, “Child Care: An Important Part of American Life” (2013), www.census.gov/library/visualizations/2013/comm/child_care.html.

  2. Elise Gold & Tanyell Cooke, “High-Quality Child Care Is Out of Reach for Working Families,” Economic Policy Institute (2015), www.epi.org/publication/child-care-affordability.

  3. Beth Mattingly & Andrew Shaefer, “Child Care Costs Exceed Ten Percent of Family Income for One in Four Families,” University of New Hampshire Carsey School of Public Policy, Nov. 10, 2016, https://carsey.unh.edu/publication/child-care-costs.

  4. Rachel Nania, “Child Care Shortage: Baby Boom, Operating Costs Lead to Waiting Lists,” WTOP (Feb. 13, 2017), http://wtop.com/parenting/2017/02/child-care-shortage-baby-boom-operating-costs-lead-to-waiting-lists.

  5. Nania, “Child Care Shortage.”

  6. Jamie Hansen, “Families Face Shortage of Child Care Options in Sonoma County,” Press Democrat (July 21, 2015), www.pressdemocrat.com/news/4230795-181/familes-face-shortage-of-child?artslide=0; Marnie Werner, “A Quiet Crisis: Minnesota’s Child Care Shortage,” RuralMN.org (2016), www.ruralmn.org/a-quiet-crisis-minnesotas-child-care-shortage.

  7. See NICHD, The NICHD Study of Early Child Care and Youth Development, Results for Children up to Age 4 ½ Years (2006), www.nichd.nih.gov/publications/pubs/documents/seccyd_06.pdf; Deborah Lowe Vandell & Barbara Wolfe, “Child Care Quality: Does It Matter and Does It Need to Be Improved?,” report to the U.S. Department of Health and Human Services (2000), https://aspe.hhs.gov/report/child-care-quality-does-it-matter-and-does-it-need-be-improved-full-report; Margaret R. Burchinai & Debby Cryer, “Diversity, Child Care Quality, and Developmental Outcomes,” 18 Early Childhood Research Quarterly 401 (2003); Tran D. Keys et al., “Preschool Center Quality and School Readiness: Quality Effects and Variation by Demographic and Child Characteristics,” 84 Child Development 1171 (2013).

  8. NICHD, The NICHD Study of Early Child Care and Youth Development, at 11.

  9. See, for example, Kim Parker & Wendy Wang, “Modern Parenthood: Roles of Moms and Dads Converge as They Balance Work and Family,” Pew Research Center (2013), www.pewsocialtrends.org/2013/03/14/modern-parenthood-roles-of-moms-and-dads-converge-as-they-balance-work-and-family; Lyn Craig, “Does Father Care Mean Fathers Share? A Comparison of How Mothers and Fathers in Intact Families Spend Time with Children,” 20 Gender and Society 259 (2006).

  10. Deborah Phillips et al., “The Early Care and Education Workforce,” 26 The Future of Children 139 (2016).

  11. U.S. Department of Labor, Bureau of Labor Statistics, “Usual Weekly Earnings Summary” (Apr. 18, 2017), www.bls.gov/news.release/wkyeng.nr0.htm.

  12. Roberta Weber, “Understanding Parents’ Child Care Decision-Making: A Foundation for Policy Making,” OPRE Research-to-Policy, Research-to-Practice Brief, Office of Planning, Research and Evaluation, Administration for Children and Families, U.S. Department of Health and Human Services (2011–2012); Suzanne W. Helburn & Carollee Howes, “Child Care Cost and Quality,” 6 Future of Children 62 (1996); Joe Neel, “NPR Poll: Are Parents Overrating the Quality of Child Care?,” National Public Radio (Oct. 17, 2016); Jennifer Cleveland, Amy Susman-Stillman, & Tamara Halle, “Parental Perceptions of Quality in Early Childhood Education,” Child Trends (Nov. 2013), www.childtrends.org/wp-content/uploads/2013/12/2013-44ParentalPerceptionsofQuality.pdf; Naci H. Mocan, “Can Consumers Detect Lemons? Information Asymmetry in the Market for Child Care,” NBER Working Paper No. w8291 (May 2001), https://ssrn.com/abstract=269541.

  13. Rebecca M. Ryan et al., “The Impact of Child Care Subsidy Use on Child Care Quality,” 26 Early Childhood Research Quarterly 320 (2011).

  14. Child Care Aware of America, “Parents and the High Cost of Child Care” 21 (2016), www.bls.gov/news.release/wkyeng.nr0.htm.

  15. Lily L. Batchelder, “Taxing the Poor: Income Averaging Reconsidered,” 40 Harvard Journal on Legislation 395 (2003).

  16. On the difficulty of measuring income in a timely fashion, see Anne L. Alstott, “The Earned Income Tax Credit and the Limitations of Tax-Based Welfare Reform,” 108 Harvard Law Review 533 (1995); on the volatility of earnings for low earners and the resulting difficulties in designing income-tested programs, see Batchelder, “Taxing the Poor.”

  17. Grecia Marrufo, Margaret O’Brien-Strain, & Helen Oliver, “Child Care Price Dynamics in California,” Public Policy Institute of California (2003), www.ppic.org/content/pubs/report/R_1203GMR.pdf.

  18. “Fact Sheet: Donald J. Trump’s New Child Care Plan,” https://assets.donaldjtrump.com/CHILD_CARE_FACT_SHEET.pdf.

  19. For an analysis of the Trump plan, see Lily L. Batchelder et al., “Who Benefits from President Trump’s Child Care Proposals?,” Tax Policy Center (2017), www.taxpolicycenter.org/publications/who-benefits-president-trumps-child-care-proposals/full.

  20. Child Care Aware of America, “Parents and the High Cost of Child Care,” at 36.

  21. S. Heather Duncan, “Operators: State Subsidy Drives Families into Low-Quality Day Care,” Macon, GA, Telegraph (Aug. 23, 2010).

  22. Ann Hardie, “Study: Many Child Care Centers Low-Quality,” Atlanta Journal-Constitution (July 4, 2010).

  23. See, for example, Vicki Peyton et al., “Reasons for Choosing Child Care: Associations with Family Factors, Quality, and Satisfaction,” 16 Early Childhood Research Quarterly 191 (2001).

  24. For a discussion of this dynamic in the context of child care vouchers, see Chris Herbst, “Obama’s Early Education Proposals Leave Federal Efforts Fragmented and Incoherent,” Brookings Institution (2013), www.brookings.edu/research/obamas-early-education-proposals-leave-federal-efforts-fragmented-and-incoherent.

  25. Joint Committee on Taxation, “Estimates of Federal Tax Expenditures for Fiscal Years 2016–2020” 37 (2017), www.jct.gov/publications.html?func=startdown&id=4971. In addition to the dependent care tax credit, the federal government and the states spend about $8 billion per year to subsidize child care for low-income families, including welfare recipients. U.S. Department of Health and Human Services, Office of Child Care, “FY2015 CCDF Expenditures by State,” www.acf.hhs.gov/occ/resource/fy-2015-ccdf-table-4a. The program, called the Child Care Development Fund, offers a block grant to the states, which have wide latitude to spend the money as they choose. But the CCDF doesn’t provide guaranteed access to care, and state eligibility standards vary widely.

  26. Joint Committee on Taxation, “Estimates of Federal Tax Expenditures,” at 46.

  27. Treas. Reg. Section 1.21–1(e)(2).

  28. Tax Policy Center, “Reforming the Child and Dependent Care Tax Credit” (2007), www.taxpolicycenter.org/publications/reforming-child-and-dependent-care-tax-credit; Katie Hamm & Carmel Martin, “A New Vision for Child Care in the United States,” Center for American Progress (2015), www.americanprogress.org/issues/early-childhood/reports/2015/09/02/119944/a-new-vision-for-child-care-in-the-united-states-3.

  29. James P. Ziliak, “Supporting Low-Income Workers Through Refundable Child-Care Credits,” Brookings Institution (2014), www.brookings.edu/research/supporting-low-income-workers-through-refundable-child-care-credits.

  30. Afterschool Alliance, “America after 3 pm: Afterschool Programs in Demand” (2014), www.afterschoolalliance.org/documents/AA3PM-2014/AA3PM_Key_Findings.pdf.

  31. National Education Association, “Research Spotlight on Year-Round Education,” www.nea.org/tools/17057.htm.

  32. For example, see Cynthia G. Brown et al., “Investing in Our Children, A Plan to Expand Access to Preschool and Child Care,” Center for American Progress (2013), www.americanprogress.org/issues/education/reports/2013/02/07/52071/investing-in-our-children.

  33. See Allison Friedman-Krauss, Steven Barnett, & Milagros Nores, “How Much Can High-Quality Pre-K Reduce Achievement Gaps?,” Center for American Progress (2016), appendix B, https://cdn.americanprogress.org/wp-content/uploads/2016/04/01115656/NIEER-AchievementGaps-report.pdf.

  34. Friedman-Kraus
s et al., “How Much Can High Quality Pre-K,” appendix B.

  35. Friedman-Krauss et al., “How Much Can High Quality Pre-K.”

  36. Ministère de l’Éducation Nationale, “L’école maternelle,” www.education.gouv.fr/cid166/l-ecole-maternelle-organisation-programme-et-fonctionnement.html.

  37. Pamela Druckerman, “Catching Up with France on Day Care,” New York Times (Aug. 13, 2013).

  38. Mairie de Paris, “Crèches Municipales,” www.paris.fr/creches.

  39. OECD, “Public Spending on Childcare and Early Education,” http://www.oecd.org/els/soc/PF3_1_Public_spending_on_childcare_and_early_education.pdf.

  40. Timothy Bartik et al., “A Benefit-Cost Analysis of the Tulsa Universal Pre-K Program,” Georgetown University Center for Research on Children in the United States (2016), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2830528.

  41. RAND Corporation Research Briefs, “The Costs and Benefits of Universal Preschool in California” (2005), www.rand.org/pubs/research_briefs/RB9118/index1.html.

  42. James J. Heckman, “Schools, Skills, and Synapses” (2008), https://heckmanequation.org/assets/2017/01/Schools_Skills_Synapsis.pdf.

  43. John M. Love et al., “The Effectiveness of Early Head Start for 3-Year-Old Children and Their Parents: Lessons for Policy and Programs,” 41 Developmental Psychology 6 (2005).

  44. Gosta Esping-Andersen et al., “Child Care and School Performance in Denmark and the United States,” 34 Child and Youth Services Review 576 (2012).

  45. Latosha Floyd & Deborah A. Phillips, “Child Care and Other Support Programs,” 23 Future of Children 79 (2013).

  46. Darcy Ann Olsen, “Universal Preschool Is No Golden Ticket,” Cato Policy Analysis (1999), https://object.cato.org/sites/cato.org/files/pubs/pdf/pa333.pdf.

  47. Pedro Carneiro & Rita Ginja, “Long-Term Impacts of Compensatory Preschool on Health and Behavior: Evidence from Head Start,” 6 American Economic Journal: Economic Policy 4 (2014).

  48. David Blau, “Child Care Subsidy Programs,” in Means-Tested Transfer Programs (Robert A. Moffitt ed., 2003); Marianne P. Bitler, Hilary W. Hoynes, & Thurston Domina, “Experimental Evidence on Distributional Effects of Head Start,” NBER Working Paper No. 20434 (2014), www.nber.org/papers/w20434.pdf.