Child Care Subsidies

Child care subsidies make quality child care more affordable, support the healthy development of children, and help low-income parents access the child care they need to go to work or to school to support their families. CLASP develops and promotes child care subsidy policies that expand access to assistance for low-income families, improve the quality of child care across settings, and help child care providers access the supports they need to provide high-quality care. We analyze state and national child care subsidy data to help advocates and policymakers better understand state policies and make the case for effective policies. For state child care assistance fact sheets, go to In the States.

Feb 3, 2015  |  PERMALINK »

President Proposes Historic Child Care and Early Education Investments

By Stephanie Schmit and Hannah Matthews

President Obama’s FY 2016 budget proposal, released yesterday, offers a bold vision for child care and early education in America. His budget would make a landmark, ongoing investment in a continuum of child care and early education services for children from birth through school entry to better prepare them for success in school and to ensure that low- and middle-income working families can afford to go to work knowing their children are safe and well cared for.

Key investments in the budget proposal include:

Child Care. The president’s proposal includes a major expansion in child care assistance for low-income families through both mandatory and discretionary funding for the Child Care and Development Block Grant (CCDBG). Specifically: 

  • An increase of $3.7 billion in mandatory funding for child care assistance in FY 2016, which is the first installment of investments totaling $82 billion over 10 years, to guarantee access to quality, affordable child care for children under age 4 in low-income families (under 200 percent of poverty). This expansion in mandatory funding would be financed by reforms to the tax code that would increase taxes on the wealthy and close corporate tax loopholes. By 2025, more than 1.1 million additional children under age four would have access to high-quality child care.
  • A $370 million increase in discretionary funding (the funding set each year in the annual appropriations measure) including $266 million to help states implement new provisions in the bipartisan Child Care and Development Block Grant Act of 2014, $4 million for research and evaluation, and $100 million for pilots to develop, implement, and evaluate new, innovative models of providing child care.
  • An expansion of the Child and Dependent Care Tax Credit (CDCTC) for families with children under age five. The Budget triples the maximum credit available for families to $3,000 per child and makes the full CDCTC available to families with incomes of up to $120,000.

Head Start and Early Head Start. The budget proposal includes a $1.1 billion increase to expand Head Start programs to meet the full-day and full-year needs of families. This increase includes a $150 million increase for Early Head Start-Child Care Partnerships to invest in high-quality infant and toddler care, a $284 million investment for cost of living adjustments, and $25 million for activities associated with Designation Renewal System, or recompetition process.

Home Visiting and Preschool. The budget proposal includes $75 billion to support the Preschool for All initiative, including $15 billion over 10 years for evidence-based home visiting. The Preschool for All initiative would provide all four-year-olds from low-income families with access to high-quality preschool. The Preschool for All proposal is funded with an increased tobacco tax. In FY 2016, the budget proposes a $500 million increase for Preschool Development Grants, expanding them to over 40 states.

The president’s budget proposal reflects up-to-date understanding of who families are today and what is holding them back. It puts child care needs, and other supports for working families, front and center—firmly grounded in the research on how to help families get ahead and what is important for young children’s success. The president’s budget proposal outlines the Administration’s vision for federal spending and revenue. In the coming weeks, Congress will have an opportunity to lay out its vision. We encourage Congress to advance a budget that increases investments in child care and early education given the broad—and bipartisan--consensus of the importance of early childhood experiences.

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