This report examines current issues relating to day care and challenges many of the policy assumptions that underlie a major public program of subsidized day care for children. A historical perspective of day care is presented and various types of day care are described. The costs and benefits of day care are examined and the relation of day care to women's liberation is discussed. New Jersey's organization and administration of day care services is examined in detail. Based on the information reviewed in the report, it was recommended that day care programs: (1) should not be universal, (2) should be limited to sound custodial care rather than "schools for toddlers," (3) should include only funds for sound custodial care of children with financing for public health, educational, and social services coming from other programs designed for those purposes, (4) should be subsidized through vouchers rather than direct subsidies to program operators, (5) should use day care subsidies where they are likely to have the most beneficial impact upon families and upon society at large, and (6) should give top priority to expansion of after-school day care, should de-emphasize preschool day care and should provide infant day care only in special circumstances. (JMB)