gency of regulation, and the availability of day care. Those States that have the so-called "low and deplorable" standards happen to have far, far more day care slots per capita than does Connecticut or any of the States with higher day care standards. That is simply a reality.

Now, in every State, what the legislature is doing is grappling with that trade-off, but you can't dismiss the trade-off. It does exist, and it is pertinent. Your bill proposes to raise quality and expand availability and raise day care salaries, and so forth and so on. You are really squaring the circle.

There are trades to be made here. And another particularly im portant aspect of this that has again been neglected in the testimo ny today is that in raising those regulatory standards, particularly in the Southern States, where 42 percent of all the licensed day care in the United States is in those States, those with the lower standards, and that is not an accident-

Senator DODD. Alabama doesn't have low standards.

Mr. RECTOR. But Georgia, Texas and Florida do.

Senator DODD. But you are indicting the entire South. Some of those States are doing tremendously well.

Mr. RECTOR. Okay. But basically, there is a kind of geographic breakdown to this.

Senator DODD. No, there is not, in fact. That's the point in the analysis.

Mr. RECTOR. All right. The States with the lower standards have a substantial share of the day care. Now, according to the analysis by Mr. Pearson in Child Care Review, what he found was that mainly in those States, that there would be some 20,000 centers driven out of operation and close to one million children displaced. But because of the funding mechanism of the bill, which does not allow funding to flow to over half of the day care centers in the United States, to those profitmaking private sector day care providers, those centers would be put out of business by having their cost of service raised. They would be put in competition with heavilysubsidized nonprofit centers that would grow up-

Senator DODD. That exists already. I mean, your argument earlier on church-based programs, nonprofit ones, that is for people to make choices. They have the right to make the choice.

Mr. RECTOR. What I am saying is the evidence that we have, at least the analysis we have, would say that at best the impact of your bill in the South would be to displace over one million children from one day care setting to another day care setting. And I can't see why that would be a particularly desirable outcome.

Senator DODD. I think your assumption is fallacious to begin with.

Let me ask you about the church issue. Do you really believe that the Supreme Court would uphold the Constitutionality of a bill that allowed a Federally funded-at least in part Federallyfunded or subsidized-child care facility to teach religious training in it?

Mr. RECTOR. No, not with a direct subsidy. That's why I believe that you can cut the Gordian knot of that question and avoid this religious entanglement issue.

Senator DODD. Well, how do you deal with the problem of trying to provide assistance? You obviously know the average cost of child care per child is running $3,000 to $4,000 per year per child. Now, even with your tax break idea, with people struggling to makes ends meet, where you don't argue, I presume, with two out of every three women are either the sole providers of their families or have husbands who earn less than $15,000, that even with your expansive tax credit idea, that you are going to even come close to meeting that cost.

Now, if you don't provide some sort of subsidy, I don't know how you ever expect these people to ever pay the cost of child care-let alone answer the fundamental question, which I assume you have taken for years, and that is people ought to get off welfare and stop working.

And yet you have heard over and over again, and I presume you don't argue with the data, that one of the major problems people on welfare face is that they don't have any child care for their children. How do you square that circle?

Mr. RECTOR. I would argue with that data very strongly. If I could, the point on the Gordian knot of the religious entanglement is that if you provide one dollar-one dollar of subsidy to day care is one dollar of subsidy

Senator DODD. But you are cutting off that choice for people. Why shouldn't a poor person make the choice if they want to go to a religious-based day car facility?

Mr. RECTOR. Why shouldn't they make that choice? That is precisely my point.

it.

Senator DODD. Well, they're going to need help financially to do

Mr. RECTOR. That's right. And a tax cut approach or a voucher approach, but particularly a tax cut approach, avoids the religious entanglement issue and does enable that poor family to make that choice. A direct grant approach, putting the same amount of money by direct grants into the center is not only economically efficient by any public administration study I have ever seen, but does bring about the religious entanglement question. You can avoid that question by providing the funding directly to parents and allowing parents to make that choice. That is the answer to your question about the Supreme Court. And that would be permissible, according to every interpretation of the First Amendment that I have ever seen.

Now, with regard to mothers on welfare, there is a lot of loose talk based on virtually no studies, most of which have not been read by the people who are talking about them, indicating that a predominant reason that women on welfare do not work is a lack of day care.

I would simply suggest that when, particularly there was a reference to a GAO study and another study in Washington State, that when reference is made to those studies, that you should actually read what the study said itself and what the questionnaire said, because it does not say what the advocates are purporting that it says.

What we do have is a long body of somewhat dated, but nonetheless extremely rigorous, experimental literature from the Seattle

Denver Income Maintenance Experiment and the Gary, Indiana Income Maintenance Experiment, as well as from the MDRC experiments on Work Fare-all of which indicate that an absence of child care is not a predominant reason for blocking women on welfare from going to work.

For example, in the Gary, Indiana experiment, low-income women and women on welfare were provided with free day care services, and what they found was that in the experimental setting, there was virtually no increase in utilization. Also, all three of those studies-

Senator DODD. Well, do you think women on welfare ought to get off welfare and go to work?

Mr. RECTOR. I think when you are talking about women on welfare, you are caught on the horns of a dilemma.

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Senator DODD. Well, thank you very much. I thank both of you for being here this morning. It helps to have your testimony. I know that may sound like it is facetious, but I am not being facetious-it does, because you bring up points that others do not, and I am grateful to you for that.

It has been a little long here this morning. I apologize to all our witnesses and those who have been patient to sit through this today.

There may be some additional questions for both of you from the other Members of the Committee, and I would appreciate your response to them, if you could.

But until further call of the Chair, this Subcommittee will stand adjourned.

[Whereupon, at 2:15 p.m., the Subcommittee was adjourned.]

90-587 (384)