Trump says federal government ‘can’t take care of daycare’ amid ongoing war with Iran

As the US continues to fund a war in Iran, President Donald Trump said childcare funding from the federal government is off the table.

During an Easter reception at the White House on Apr. 1, the president said he’d directed Office of Management and Budget Director Russell Vought not to “send any money for daycare because the United States can’t take care of daycare.” He went on to say that state governments should fund childcare by raising taxes instead.

“We’re fighting wars. We can’t take care of daycare,” Trump said. He similarly said the federal government couldn’t fund Medicare or Medicaid because it’s prioritizing “military protection.”

Though Trump didn’t specifically point to the private sector as being on the hook for funding childcare, the comments suggest employers will likely continue to shoulder the burden to the extent they’re able to.

States, employers pitch in. Despite Trump’s recent comments, a few provisions in the Republican tax bill he signed into law last year are intended to address the caregiving crisis. Employees can contribute a higher maximum amount to flexible spending accounts for dependent care expenses starting this year, for example, and employers are now entitled to a more generous tax deduction if they provide employees with childcare.

But such policies seem unlikely to make a huge dent in the average annual cost of childcare in the US, which was over $13,000 as of 2024, according to non-profit organization Child Care Aware of America.

A few state governments, like New Mexico and New York, are forging ahead with universal childcare programs. For as long as the federal government declines to pass more robust policies to support the care economy, though, it looks likely that the private sector will continue to play a major role.

Though childcare benefits can represent a major investment for employers, declining to offer anything may harm their ability to recruit and retain talent, research suggests. More than one-third of small business owners (35%) surveyed by Goldman Sachs in 2024 said their workers had cut back on hours or quit working entirely because of the cost and/or availability of childcare, and 38% said a lack of childcare negatively affected their ability to operate or grow a business.

Kicking the can down the road. Trump’s latest comments represent his most recent pivot on funding childcare, an idea he was initially supportive of during his first term. When asked in Sept. 2024 whether he would commit to making childcare more affordable if reelected, he deflected, saying the cost of daycare would be minimal compared to the economic impact of his proposed tariff policies.

More than one year into Trump’s second term, tariffs have done little to address the high cost of childcare and its impact on the workforce. The cost of daycare and preschool rose by 5.2% YoY in September 2025, 1.5 times higher than overall inflation, Bank of America Institute noted in a recent report. Payments to childcare providers have fallen each year since 2021, suggesting people are leaving the workforce because care is too costly, the bank said, citing internal data.