The consortium concluded that Build Back Better was based on “an incomplete cost analysis” and that it would have phased benefits in too quickly for higher-income families, said Radha Mohan, the group’s executive director and a lawyer at Brownstein Hyatt Farber Schreck, a Washington lobbying firm.
Senate staffers said they assured the consortium and other child care groups that through the regulatory process, Congress would provide enough federal dollars to make the plan workable for providers, including for the chain companies.
Nevertheless, the legislation could have limited profits for the big chains.
The companies have said as much in their financial disclosures.
In its 2021 annual report, Bright Horizons wrote that a “broad-based benefit” for child care could “place downward pressure on the tuition and fees we charge, which could adversely affect our revenues.”
In a Nov. 10 filing with the U.S. Securities and Exchange Commission for its initial public offering, KinderCare warned that expanded government child care benefits could lessen demand for its services. “Our continued profitability depends on our ability to offset our increased costs through tuition increases,” the company stated.
After Senator Joe Manchin, a centrist Democrat from West Virginia, essentially killed the legislation by opposing it, Mr. Dunkley and executives from several other consortium companies — including Bright Horizons, KinderCare, the Primrose School Franchising Company, Lightbridge Academy and Acelero Learning — made donations in January to Mr. Manchin’s campaign fund and his political action committee, Country Roads.
Shortly after, Mr. Dunkley and other chain child care leaders attended a dinner with the senator, where, according to Mr. Dunkley, the executives expressed their wish for federal child care funding to be included in the bill that became the Inflation Reduction Act but said it should be targeted toward lower-income families.