In Focus: Child Care Subsidies

Feb 10, 2016  |  PERMALINK »

Child C.A.R.E. Act Would Guarantee Low-Income Parents’ Access to High-Quality Infant-Toddler Child Care

By Stephanie Schmit and Anitha Mohan

Today, Senator Casey (D-PA), Representative Crowley (D-NY), and Representative Frankel (D-FL) introduced the Child Care Access to Resources for Early Learning (C.A.R.E.) Act, bicameral legislation to provide high-quality child care to all low-income families (below 200 percent of poverty) with children under age four by 2025.

 The Act would provide mandatory funding to expand access to high quality infant-toddler care, increase provider payment rates to support the costs of high-quality child care, increase the compensation of infant-toddler child care providers, and otherwise strengthen the infant-toddler workforce. The bill would require states to address the needs of particular groups of children, including dual language learners and children whose parents work nontraditional hours.

Building on the Administration’s call for high-quality, affordable infant-toddler care for all low-income families, the bill would expand the number of young children receiving child care under the Child Care and Development Block Grant (CCDBG). As of 2012, only 36 percent of eligible children under age 5  received child care services through CCDBG and other federal funding sources. In fact, in 2014, CCDBG served the smallest number of children since 1998. While support for working parents has shrunk due to limited federal and state investments, the number of low-income young children who could benefit from high-quality child care has grown to nearly half of all young children. 

The youngest children are the most likely of any age group to experience poverty, which greatly impacts their future health, education, and other key outcomes. High-quality care—including skilled, nurturing caregivers and access to comprehensive health, mental health, family, and nutrition services, such as those provided through Early Head Start programs—can lessen the impact of economic hardship for poor and low-income children. Further, access to affordable, reliable, quality care reduces parents’ stress and supports their ability to get and keep jobs and succeed as parents and workers.

Despite these benefits, affordable, high-quality child care is out of reach for most families. Infant care is especially expensive, exceeding the cost of public college tuition in 33 states and the District of Columbia. Additionally, state child care licensing policies fail to ensure that all child care settings foster healthy development. And, state CCDBG policies fail to give child care providers the resources needed to ensure that child care providers can meet high quality standards.

The Child C.A.R.E. Act affirms what all low-income families need: access to affordable, high-quality child care. Congress should invest in our children, families, and child care providers to get our youngest children off to a strong start.  

Nov 24, 2015  |  PERMALINK »

TANF Spending on Child Care Up Slightly in 2014

According to 2014 data on the Temporary Assistance for Needy Families (TANF) program, states spent slightly more TANF funds on child care assistance than they did the previous year. The data show an increase of $137 million (from $2.5 billion to $2.6 billion) over the 15-year low seen in 2013.  These figures reflect the total amount of TANF funds used for child care, combining direct expenditures and transfers.

Under federal law, states have the option to use TANF funds to provide child care assistance to families in need. They can do so by spending funds directly on child care under their state TANF programs or by transferring money into the state Child Care and Development Block Grant (CCDBG) program. In 2014, direct spending on child care assistance totaled $1.2 billion, a $122 million over 2013. TANF transfers to CCDBG nominally increased by $15 million to $1.4 billion. Only nine states transferred 30 percent of their block grant (the maximum amount allowed) to CCDBG or a combination of CCDBG and the Social Services Block Grant (SSBG): Florida, Idaho, Indiana, Iowa, Massachusetts, Mississippi, Montana, Nebraska, and Oklahoma. Seven additional states transferred 25-30 percent of their TANF funds: Minnesota, New Mexico, North Carolina, Pennsylvania, Vermont, Washington and Wisconsin.

State TANF maintenance of effort (MOE) spending also rose slightly over 2013 levels, according to the data. Under TANF, states are required to maintain the levels of state dollars targeted at needy families, based on their historical spending.  In 2014, states reported spending $2.5 billion that could be claimed toward the TANF MOE requirement (an increase of $181 million from 2013). A portion of TANF MOE funds spent on child care may also be directed toward states' CCDBG MOE requirement. 

The Administration for Children and Families has yet to release FY 2014 expenditure data for CCDBG, making it impossible to determine total child care spending (CCDBG and TANF combined) for 2014. CLASP will provide additional analysis when the data are released.

These increases in state TANF spending on child care, though small, are significant. Because the TANF block grant has not received a funding increase since its establishment in 1996, it has lost more than one-third of its value to inflation. While child care remains a priority for states, they face tough choices with limited dollars and many areas of need. The history of TANF and CCDBG state spending illustrates the dramatic consequences of consolidating programs into block grants with limited funding. Despite recent increases in state spending, fewer than one in six children eligible for child care subsidies under federal CCDBG guidelines actually get help. Further, CCDBG participation is at an historic low.

As CLASP noted in TANF and the First Year of Life: Making a Difference at a Pivotal Moment, it’s essential that we revisit state TANF investments and develop new policies and priorities that place a two-generational model—especially serving very young children and their families—at the center of state TANF plans. Child care expenditures are a critical part of this approach and could include:

  • Guarantees of access to the highest-quality child care for TANF families.
  • Assurances that CCDBG reauthorization provisions regarding quality and continuity of care are applied to TANF-funded child care to ensure TANF families have access to these vital improvements.
  • Referrals for TANF families with infants to home visiting programs and Early Head Start. Such referrals could include credit toward their TANF work requirements. and
  • Development of partnerships and intensive services to serve TANF families who have young children.

The small increase in TANF funds for child care provides some optimism that states will reverse decades of underspending.  As state agencies examine their spending, the opportunity to increase investment in child care and better serve young children and their families through TANF should be a top priority.

For more information on overall TANF spending in 2014 >>

Nov 19, 2015  |  PERMALINK »

Child Care Reauthorization One Year Later, Further Investments Needed

By CLASP

One year ago today, President Obama signed the first reauthorization of the Child Care and Development Block Grant (CCDBG) in nearly 20 years. CCDBG is the major federal program that provides funds for child care assistance so low-income families can work or get education or training to improve their economic stability and to improve the quality of child care for all families. In addition to being a work support for parents, CCDBG provides access to early childhood educational experiences and after school programs for 1.4 million children.

The reauthorization made long-overdue changes to the child care program by setting basic health and safety standards, such as CPR training for child care providers and on-site inspections for compliance with standards. It made improvements so that parents would have more stable child care financial assistance supporting their employment and education success and continuity for their children to remain in child care settings over time.

The renewed CCDBG aspires to improve the quality of child care and to ensure that more low-income and vulnerable children, including those with special needs and those experiencing homelessness, have improved access to high-quality settings. That vision represents a necessary turnaround from the current trajectory of the program. In recent years, CCDBG has served fewer and fewer children, and the quality of child care accessed by many low-income children remains poor. Yet, that vision cannot come to fruition without investment.

When passing the bipartisan CCDBG Act, Congress acknowledged that new funding would be necessary to meet the goals of the program. New requirements necessitate additional funds that Congress should appropriate. For example, the law requires background checks on workers to improve safety for children and inspections to ensure that centers and providers are compliant. These and other provisions will create new costs for states.

Across the country, for the past year, states have been implementing the new law—reviewing current programs for improvement, convening stakeholders to craft new policies, and passing legislation to codify new requirements. States also have been grappling with how they will successfully implement the promising provisions of the new law with limited funding. CLASP has engaged with state child care administrators and advocates to discuss these important issues and tradeoffs and has created a guide to help explain the law by exploring key provisions and providing recommendations.

CCDBG is serving the fewest number of children in its history. If federal and state legislators do not appropriate sufficient resources, additional children and families will lose access to a program that plays an important role in supporting their chances of achieving economic success. Moreover, the lofty goals of the legislation will fail to be realized.

The CCDBG reauthorization is a moment of opportunity, and now is a critical time. With increased public attention on the importance of the early years for children's development, as well as the struggles that so many families face in accessing affordable, high-quality child care, CCDBG offers a chance to make immediate improvements in the nation's child care. Right now, Congress stands at a significant crossroads: current appropriations negotiations over the federal budget offer policymakers a unique opportunity  to provide much-needed resources to fully fund the reauthorization to make vital improvements to the nation's child care system and expand access to enriching experiences for young children that support their healthy development and school success. The way forward is clear. Congress must act now for young children and their families.

Find further CLASP CCDBG resources here>>

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