NEW REPORT: Merkley Unveils Child Care Investigation Exposing Safety Lapses, Drain of Public Resources in Private Equity-Backed Centers

U.S. Senator Jeff Merkley (D-OR), Ranking Member of the Senate Budget Committee, released a first-of-its-kind investigation on November 13, 2026, examining how private equity ownership affects child safety in the U.S. child care industry. The report, titled "Who Profits from Child Care?", analyzed publicly available information and licensing data from California, Texas, and Virginia. It focused on the two largest for-profit child care companies by capacity: KinderCare Learning Companies (KinderCare), backed by Partners Group, and Learning Care Group (LCG), backed by American Securities. Collectively, the two companies have a combined licensed capacity to enroll more than 375,000 children.

The investigation found that the companies rely heavily on public money. Approximately one-third of KinderCare's and LCG's total revenue comes from public funding programs, including subsidies, and KinderCare collected roughly $1 billion in subsidy-supported tuition in fiscal year 2025. The report also states that KinderCare and LCG have borrowed more than $1.25 billion to pay dividends to their owners: $620 million at KinderCare and at least $636 million at LCG. According to the report, these obligations reduce financial flexibility and raise questions about how the companies balance debt service and investor payments against safety, staffing, and affordability.

Based on Democratic staff analysis of licensing and violation records, KinderCare and LCG centers were cited more often, more seriously, and more repeatedly than for-profit chains without a private equity backer ("non-PE chains") and all other centers. The two companies drew complaint-triggered inspections at roughly twice the non-PE chain rate and up to four times the rate of all other centers, and accumulated high-risk violations at up to three times the non-PE chain rate.

Merkley requested financial records, ownership structures, tuition and cost trends, safety standards, and employment practices from both companies and their private equity backers. According to the release, all four companies responded with brief narratives and no underlying records, including documents needed to determine how subsidies and tuition are allocated among safety, operating costs, workforce investments, debt payments, and investor returns.

Merkley framed the findings within a broader campaign against private equity involvement in essential industries. He cited his role in limiting institutional investors' purchases of single-family homes, which was included in the 21st Century Road to Housing Act, and his cosponsorship of the Let Kids Play Act on youth sports. He also previously cosponsored the Corporate Crimes Against Health Care Act, the Take Back Our Hospitals Act, and the Stop Corporate Takeovers of Physicians Act. Merkley called for Congress to act to curb private equity practices in child care. The report is a Democratic minority staff effort and the release does not indicate any regulatory response.