By Shira Small
Rising child care costs are a significant barrier to access, particularly for families with low incomes who spend the highest percentage of their income on care. Some families with low incomes can access assistance through the Child Care and Development Fund (CCDF), but this program only reaches one in six eligible children due to significant underfunding. Barriers to access are exacerbated for families of color who are even less likely to access care despite eligibility. When families do receive child care assistance, many of them must still pay a portion of the cost, otherwise known as a copayment. Copayment scales vary from state to state and are influenced by income level, family size, and other factors. However, a history of underinvestment in child care results in low wages and lack of other support for providers which can make copayments complex and unaffordable for families.
COVID-19 child care relief funding and related waiver authority allowed many states to temporarily waive family copayments, but this authority and funding is set to expire soon. The first round of American Rescue Plan Act (ARPA) child care relief funding will expire on September 30th and the remaining funds will expire in September 2024. Some states have tried to maintain copayment waivers and affordability for families in advance of the funding cliff; California is establishing a no-fee approach for families earning under 75 percent of the State Median Income (SMI) starting on October 1, 2023, and a generous scale for families earning above 75 percent SMI. However, not all states have the budget, resources, or political will necessary to modify their copayment scales to best meet parents’ needs.
The Department of Health and Human Services (HHS) is trying to help, and recently released a notice of proposed rulemaking (NPRM) aimed at addressing some of these challenges by improving child care accessibility and affordability. The NPRM requires that copayments are capped at 7 percent of a family’s income and recommends that states waive copayments for families with incomes up to 150 percent of the Federal Poverty Level (FPL) and for families with a child with a disability. CLASP has highlighted this significant positive step in our recent comments.
The NPRM also calls for Lead Agencies, the departments in each state that administer child care, to post more information about copayment scales. Lead Agencies should use simple, concise language that is accessible to all families, including those with limited literacy and those who speak a language other than English. We recommend that states share a clear definition of copayments, how they are calculated, how frequently copayments must be paid, and how parents and providers were engaged in the process for determining the copayment and sliding fee scale.
Though many states will need to wait until their next legislative session to modify their copayment scale, there are other changes Lead Agencies can make now to help ensure families understand and afford the cost of care. Lead Agencies can clarify different factors that affect copayment, such as household size; whether families pay weekly, monthly, or per child; and other variables. Doing so would help make the copayment scale more transparent and easier to navigate.
A historic lack of investment in child care has created the conditions for an inaccessible and unaffordable child care system, rooted in the devaluation of women’s and especially Black women’s labor in the child care workforce. Without adequate funding, states are forced to make difficult decisions that often result in policies that don’t work well for parents — policies like higher copayments and restrictive eligibility criteria, which lead to far too few eligible families receiving care. Copayments must be more affordable and the system must be clearer to help families access child care, but this is only possible with increased and sustained public investment.
In this GLR Learning Tuesdays webinar, co-sponsored by Early Learning Nation Magazine, we heard a riveting conversation about early childhood policy — past, present and future.
Moderator Michelle Kang of NAEYC opened the session by recognizing the essential yet currently undervalued and undercompensated role that child care and education professionals have, and by a brief explanation of “how we got here.” Following this introduction, Kang was joined by Elliot Haspel of Capita and Katharine Stevens of Center on Child and Family Policy who reflected on Build Back Better, applauding its attempts to inject highly needed funding and create access to high-quality child care. Both, however, agreed that BBB did not sufficiently support pluralism and parent choice in terms of what kind of child care families have access to.
“Child care is locked by its economic fundamentals. You can nibble on the edges with regulation. You can nibble on the edges with some of these economies of scale, but ultimately it’s a human-intensive service to provide, and it should be a human-intensive service to provide. It’s going to be expensive.” – Elliot Haspel, Capita
Next, Stephanie Schmit of Center for Law and Social Policy shared insights into the behind-the-scenes process of getting BBB introduced, outlining some of the limitations and challenges posed by the “uncharted territory” of such large-scale child care legislation, the mindset shifts that come along with that, and what was learned to improve future legislative attempts.
We then heard from Laura Valle-Gutierrez of The Century Foundation about the very real impact that the end of pandemic rescue funding will have on families, children, child care providers and early childhood professionals, the majority of the latter being women of color. She was followed by Jessica Sager of All Our Kin who reminded everyone on the webinar of the following:
“What we are hearing from educators is this: For a moment, during the pandemic we were seen and recognized as essential workers. And now conditions have not essentially changed. And yet the funding that made it possible for us to do this work is going away. It feels like we and the children and families in our care have been abandoned…every family child care program is a community resource. It’s a hub. Sometimes it served generations of families, and when that program is gone, it is going to take decades to replace it. So the harm that we are doing to children, families and the economy in both the short term and the long term really cannot be overstated.”
Lisa Roy of the Colorado Department of Early Childhood echoed Sager’s sentiment, stating that the business community needs to get involved in recognizing and advocating for the benefits of robust early childhood systems, in addition to sharing the work that Colorado is doing in this sector.
The conversation ended with a discussion of future policy priorities to work toward a real early childhood system, the common threads of which were that the current system is not working, we need large-scale funding, and families need access to high-quality choices for their child care needs.
Washington, D.C., September 12, 2023—Today’s U.S. Census Bureau report shows—once again—that poverty in the United States is a policy choice. According to the Supplemental Poverty Measure (SPM), the overall rate of poverty in 2022 was 12.4 percent, markedly increasing from 7.8 percent in 2021, even as both total employment and full-time, year-round employment rose. And the child poverty rate as measured by the SPM more than doubled, from 5.2 percent in 2021 to 12.4 in 2022, the largest one-year increase on record—following the largest one-year decrease on record in 2021. While the SPM poverty rate grew for all groups of children, Black and Hispanic children continued to experience disproportionately high poverty rates, 17.8 percent and 19.5 percent respectively, compared to 7.2 percent for non-Hispanic white children. Non-citizens also experienced disproportionately high poverty, with an SPM poverty rate more than twice the native-born population (24.4 percent vs. 11.2 percent).
Poverty rates are affected far more by decisions made in Washington D.C., and in state capitals than any decisions made by families and communities. In fact, the primary factors contributing to U.S. poverty rates are policies that create or reinforce structural and systemic challenges like structural racism and patriarchy, enhance or undermine worker power, strengthen or weaken the social protection system, and generally ensure a strong economy that delivers widespread prosperity.
The historic decline in child poverty two years ago was the result of COVID-era policies, including an expanded, enhanced, and more equitable Child Tax Credit (CTC) and other federal programs to support people with low incomes, particularly children. Yet policymakers decided not to extend the enhanced CTC, turning their backs on children by rejecting a proven tool to fight poverty that offered Americans a return of more than $9 on each dollar of investment in families experiencing the lowest incomes. And 18 states prematurely ended SNAP emergency allotments despite elevated food prices last year, declining millions of federal dollars in nutritional support.
“Too much is at stake in both the lives of children and families, and the health of our communities for politicians to do nothing or even actively undermine them. Mountains of research make unequivocally clear that poverty hurts children, youth, and families, while also holding back the U.S. economy,” said Indivar Dutta-Gupta, president and executive director of the Center for Law and Social Policy (CLASP).
Parents with low incomes work hard every day to meet their children’s material and developmental needs. Poverty acts as a weight, pulling them back and making it harder—sometimes impossible—to overcome common challenges and setbacks. As a result, children growing up in poverty are at higher risk of developmental delays, behavioral challenges, and a lack of school readiness. First and foremost, all children deserve an opportunity to meet their highest potential. But the costs of not addressing child poverty aren’t just felt by the children themselves. One study estimates that child poverty costs the U.S. economy just over $1 trillion per year, or 5.4 percent of GDP.
Abundant evidence demonstrates that income support programs can improve the rates of child poverty. Cash supports for families lead to better birth outcomes, greater educational attainment, and improved overall health. Research also shows that this assistance reduces child welfare system involvement, lowering the risk of children being separated from their families. “As the expanded CTC revealed in 2021, we have the tools to end child poverty in this country. We just need the political will to use them,” said Dutta-Gupta.
The Census report also found that the share of people without health insurance in 2022 dropped by 0.4 percent to 7.9 percent, tying the previous low. This also reflects a policy choice to establish the continuous coverage provision under Medicaid that began in 2020. Unfortunately, this provision ended in 2023, and we know that at least 5.9 million people, including many children, have already lost Medicaid coverage. When we see the 2023 figures, the uninsurance rate will likely be much higher. We need a permanent system offering affordable, continuous health insurance coverage to all, without forcing people to navigate a paperwork maze to keep their coverage. Continuous coverage reduces administrative burden and prevents delays and gaps in treatment that can lead to worse health outcomes.
Congress has an outsized role in reversing the country’s increased poverty. And September is a pivotal time, as Congress must pass bills by the end of the month to fund the continued operation of the federal government. This is an opportunity for policymakers to provide adequate funding to fight poverty and promote well-being, free of harmful “riders.” This includes addressing the child care funding cliff threatening families and our economy, passing a Farm Bill that improves SNAP and makes it more equitable, and enacting a CTC that’s paid to families regardless of their specific federal income tax liability and that applies to families without regard to immigration status.
Alycia Hardy, Alyssa Fortner, and Tiffany Ferrette presented to the NC Coalition for Inclusion, Not Expulsions on their brief “Centering Black Families: Equitable Discipline through Improved Data Policies in Child Care” and state and federal recommendations to address harsh disciplinary practices.
By Alejandra Londono Gomez and Alyssa Fortner
Child care has long been unaffordable and inaccessible for many families. The Child Care Development Fund (CCDF), the primary federal funding source to help families with low incomes access child care, is a crucial support for many families across the country. However, Congress has never funded child care at the level needed to serve all eligible families. In fact, the most recent data from the Assistant Secretary for Planning and Evaluation (ASPE) show that in 2019, only 1 in 6 eligible children had access to assistance.
This annual brief analyzes national and state spending and participation data for CCDF- and TANF-funded child care for FY2020. It also highlights data on participation in the program, including children served and the number of providers who accept children funded through CCDF. Some key findings include:
Because of the delay in data publication, these data are only beginning to show the impacts of the COVID-19 pandemic on child care. FY2020 began on October 1, 2019, and ended on September 30, 2020. As the pandemic began to affect the child care sector in March 2020, these data only reflect the first six months of the pandemic. The report also includes spending from the CARES Act, including its impact on state expenditures and children served because of the pandemic. However, the report does not reflect the significant COVID-relief funding for child care assistance in the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 and American Rescue Plan Act spending packages that were passed after the end of FY2020.
The pandemic highlighted the existing vulnerabilities and disparities in the child care system. It underscored the importance of affordable, accessible child care not just for families and children, but for the economy as a whole. The pandemic also exacerbated longstanding systemic issues, including decades of insufficient federal investments, which impact access, affordability, and child care workers’ wages. Even before the devastating harm of the pandemic, most families experienced barriers to accessing high-quality care that could fully meet their needs. Those who could find child care struggled to afford the high costs. The detrimental impacts of the pandemic have caused policymakers, business leaders, and the public to better recognize the child care industry’s critical role in the economic stability of families and society.
While the data in this report begin to paint the early picture of the pandemic’s impact, we have much more to learn as data from 2021 and beyond are made publicly available. With that information, we will be able to understand the full impact the pandemic had on the CCDF program, children’s access, and providers’ ability to continue to stay in the program. The data from this analysis show increases in both funding and participation for children, but it is important to understand that without additional investments these positive gains will only be temporary.
Read the full brief here.
Read our work on how states are utilizing the COVID-19 relief funding here.
By Indivar Dutta-Gupta and Elizabeth Lower-Basch
This is the third in a series of commentaries from CLASP experts that explore dimensions of poverty ahead of the U.S. Census Bureau’s annual release of poverty and income statistics from the previous year. On September 12, we’ll get a snapshot of the economic hardship children, youth and young adults, and families experienced in 2022. Ahead of the release, CLASP experts will offer key insights on the long-term effects of child poverty, promising policy solutions for ending child poverty, links between poverty and mental health, why it’s important to have a more accurate measurement of poverty, the lived experience of childhood poverty, and what trends we expect to see in this year’s poverty data.
As we look ahead to the Census Bureau’s annual release of poverty data on September 12, it’s important to understand exactly what these numbers measure—and what they miss.
In 1964, when President Lyndon Johnson declared an “unconditional war on poverty,” there was no official definition of poverty. However, the U.S. Department of Agriculture had studied the minimum levels of different food groups to sustain adults and children of various ages and how much it would cost to purchase this food. The first poverty measure was created by Social Security Administration researcher Mollie Orshansky, who multiplied the cost of a 1960s “economy food plan”—designed for temporary or emergency use when household funds are low developed by the U.S. Department of Agriculture—by three, based on a 1950s survey indicating that families spent about a third of their income on food. This measure, now the basis of the official poverty measure (OPM) has been adjusted for price increases over time but otherwise has remained nearly untouched.
However, even before Orshansky’s measure was officially adopted, researchers understood its many problems. In proposing the measure, Orshanksy herself noted that it was “not possible to state unequivocally ‘how much is enough’” but that she was confident that anything below her threshold was “too little.”
A different problem with the OPM showed up when researchers tried to use it to measure progress in reducing poverty: it doesn’t count income from some of the most important public programs that address poverty today. Cash assistance programs like Social Security are counted, but other “in-kind” programs such as food assistance from the Supplemental Nutrition Assistance Program (SNAP), health care covered by Medicare and Medicaid, housing assistance, and child care subsidies are not. And refundable tax credits like the Earned Income Tax Credit and the Child Tax Credit (CTC)—which have increasingly become a major form of income support—are also not counted. Thus, the OPM showed that child poverty in 2021 was barely lower than in 2020 because the historic expansion of the CTC was not counted under this measure.
Fortunately, since 2011, the Census Bureau has reported a second measure of poverty, the Supplemental Poverty Measure (SPM). The SPM is a far better measure of whether public programs are, in fact, reducing poverty because it counts as income those refundable tax credits, as well as in-kind income supports from housing subsidies, food assistance, and school meals.
The SPM also deducts from income any taxes a household may owe, child support paid, out-of-pocket medical expenses, and work expenses, including child care. This measure also counts unmarried partners who live together and unrelated children, such as those in foster care, as part of the household unit. And it bases the needs threshold on families’ actual expenditures on food, clothing, shelter, and utilities, plus a bit more. Finally, it accounts for the fact that living in a state like New York costs more than in Alabama. When we say that child poverty was almost cut in half in 2020, it is the SPM that reflects this extraordinary accomplishment.
But the SPM itself is far from perfect. For example, it doesn’t distinguish between someone who has low medical costs because of excellent insurance and someone who is forgoing needed care because they can’t afford it. Similarly, it can’t tell the difference between a family with low child care expenses because it receives a subsidy that lowers the cost of quality care, and one with similarly low expenses because they leave school-age children unsupervised during the summer. And how it adjusts for housing costs produces some state results that don’t align with measures of hardship. For example, California has a higher SPM poverty rate than Mississippi, even though food insecurity is higher in Mississippi.
A recent panel of the National Academies of Sciences, Engineering and Medicine (NAS)—on which CLASP’s President and Executive Director, Indivar Dutta-Gupta served—recommended several improvements to the SPM to try to address these issues. For example, instead of only counting out-of-pocket medical costs as expenses, the panel recommends that the cost of health insurance should be added to both the needs threshold and the resources available to a household. The panel also recommends that the SPM should be elevated to the nation’s headline poverty statistic and renamed the Principal Poverty Measure or PPM. This report is significant in part because NAS recommendations led to the development of the SPM in the first place.
Understanding the role that public policies play in keeping people out of poverty is important, and even more important is understanding who—by race, gender, age, region, and more—is left behind, and why. CLASP will be closely looking at the SPM data when the Census releases it in September. But it’s also important to recognize that even an improved PPM will not capture all aspects of poverty.
The PPM will better measure resources and needs, but it won’t measure access to higher education, or whether the same program that provides needed food assistance simultaneously increases stigma and shame by the ways recipients are treated. CLASP is committed to working in partnership with people experiencing poverty to address all these aspects of poverty. As President Johnson said in his speech calling for a war on poverty, “It is an effort to allow them to develop and use their capacities… so that they can share, as others share, in the promise of this nation.”
CLASP and other national partners organized a sign-on letter and submitted comments on the NPRM to the Department of Health and Human Services on August 28, 2023.
On August 22, Tiffany co-presented with advocates from Parent Voices California to discuss a federal overview of child care copayments for families, and recent updates in the proposed rules from the Administration for Children and Families (HHS). Tiffany also shared CLASP’s role in supporting states in advancing equitable child care policies.
In September 2023 and 2024, states will face the deadlines for spending their federal pandemic child care relief funds. As this first fiscal cliff looms, state child care agencies, child care providers, and families with young children will face major challenges in providing and accessing care due to the continued crisis of a vastly underfunded child care system.
This project aims to provide a deeper understanding of the impact that federal COVID child care relief funds have already had across four states: Louisiana, Michigan, New York, and Virginia. The project outlines the successes and challenges of the implementation process and highlights how the funding ultimately made a difference in shaping the lives of families and child care providers. To inform the project, the CLASP team interviewed 10 state government staff, nine advocates, and five providers across the four states as well as five parents in Louisiana (one of which was also a provider)
These resources outline the progress that is at stake without a significant, permanent increase in federal funding.
Without it, “I think we would have potentially seen a decimation of the system that we have in place today,” said Stephanie Schmit at the nonprofit Center for Law and Social Policy.