Every parent should have the freedom to go to work knowing their children are being cared for in safe environments by nurturing caregivers and early educators that will support their children’s development and well-being. Most families with young children have all available parents in the workforce, and we know that when parents have high-quality, reliable, affordable child care, children are safer and more likely to arrive at kindergarten ready to succeed and families are stronger and better able to thrive. Good child care options also support parents’ ability to work, family income to rise, and our country’s economic engine to be stronger.
But today, America’s broken market system of child care means that high prices are a major strain on family budgets, many parents struggle to find child care options that meet their needs, and that these high costs and scarcity lead many parents to be underemployed or forgo employment altogether to instead care for their children, creating fiscal instability for these families. At the same time, the amount that parents pay for care is often not enough to support stable operations or high-quality care, and so the child care sector is suffering from scarcity due to it being an untenable business model and a workforce crisis because of low pay and poor benefits. Only transformative public investment can ensure that all working Americans can find, choose, and afford the child care that meets their families’ needs.
Until Congress is ready to pass transformative pro-family child care legislation, a serious increase in funding to the existing federal child care program—the Child Care and Development Fund program (CCDF), also known as the Child Care and Development Block Grant (CCDBG)—is urgently needed to immediately lower the child care costs for millions of Americans working hard to juggle the strain of child care bills with groceries and housing costs.
The most recent data shows that about 1.4 million children receive child care assistance every month through CCDF. CCDF provides child care assistance for working families with income below 85 percent of state median income (SMI); 85 percent SMI would mean, for example, families with incomes below $103,000 in Pennsylvania, $81,000 in Louisiana, or $89,000 in North Carolina would be federally eligible for child care subsidies. But only about one in seven eligible families actually receive this assistance because there isn’t enough federal funding to help all who are eligible.
In 2024, the Office of Child Care issued new rules that make the program even more affordable and impactful, lowering costs for families and improving payment practices for providers so that participating families could have better child care choices and so that providers would be more willing to serve children with CCDF subsidies.
Child care champions on both sides of the aisle in Congress for years have been calling for more funding to ensure that eligible children and families receive subsidies and that the program’s resources are substantial enough to cover providers’ costs like early educator salaries and benefits; it is time for more substantial financial support.
Building Child Care for a Better Future
The Building Child Care for a Better Future Act, recently introduced by Senators Ron Wyden and Elizabeth Warren, Representative Danny Davis, and other champions, would improve the lives of millions of American families who rely on child care to go to work, feed their families, and put a roof over their heads. It expands guaranteed federal child care funding to immediately lower child care costs for more than one million families. It also provides additional funding to states to improve child care supply and quality, which will help even more families.
Specifically, the bill includes two important investments. First, it would increase annual funding for the “mandatory” funding portion of CCDF—the Child Care Entitlement to States (CCES)—to $20 billion per year (a $16.45 billion increase per year). Nearly 88 percent of this $16.45 billion increase would go directly to families to reduce their child care costs and about 12 percent of it would be used by states to ensure child care safety, improve child care quality, and increase child care supply with significant flexibility for each state to determine how to meet the unique child care needs in its state. Second, it includes $5 billion per year for a new grant program specifically for states to strengthen the child care workforce and improve supply, quality, and access in areas of particular need.
“Mandatory” federal funding for child care is particularly important because it is not part of the annual Congressional appropriations process (funding known as “discretionary”), which is subject to the annual political fighting that has led to unpredictable and piecemeal funding to states. Instead, mandatory funding is automatically appropriated on an ongoing basis, unless there is a change in the underlying authorizing law. It allows states to plan around the funding that they are expecting to receive, and families and child care providers to be able to count on annual support.
The Need to Build Child Care Supply
The Building Child Care for a Better Future Act’s new investment specifically in child care supply and quality is important to ensure that parents have real choices and lower prices. These funds would benefit all families, including those that don’t receive CCDBG subsidies, by helping to build out the supply of child care for diverse families in communities around the nation. Many parents cannot find the child care they need because there simply is not enough to meet the needs of our country’s parents. Parents seeking care for their infants and toddlers, care in rural areas, or care outside the hours of a traditional 9:00 a.m.–5:00 p.m., Monday–Friday work week are particularly likely to have trouble finding appropriate child care for their families. This is an inescapable outcome of America’s current reliance on a broken market system for child care and one of the reasons families desperately need transformative child care reform.
Child care centers and family child care programs operate on razor-thin margins. The cost of operating a program is inherently labor intensive to ensure basic child safety, as well as to provide adequate support for children’s development. Recent discussion of deregulation or the warehousing of children without regard to who cares for them is not the answer to this problem, as it will lead to children’s death and injury, more children with behavioral and learning challenges in school, and make it harder for parents to find appropriate care.
Unfortunately, the child care deserts that existed before the pandemic—in which half of all families could not find licensed child care in their communities—persist. Though pandemic relief funds staved off the worst of the feared decline in supply and slots during the pandemic, approximately 20,000 programs still closed at the height of the pandemic. Family child care programs, in particular, have been on a declining trendline, while the supply of child care centers has remained flat. Incomplete data poses challenges, but according to Child Care Aware ® of America’s 2023 data, nationwide, there has been a 12 percent decline in licensed family child care homes since 2019, and a modest 1.3 percent increase in child care centers. In addition, a February 2025 NAEYC survey of more than 10,000 child care providers found that 56 percent of child care providers were aware of at least one program closing in their community in the last year.
The pandemic relief funding—in particular, the $24 billion in federal child care stabilization funds—showed just how effective federal investments in supply building can be. Those funds reached more than 220,000 child care providers across the United States, and were used to temporarily pay higher wages through bonuses and stipends, support benefits like health insurance, and cover nonlabor operating expenses such as rent, mortgage, utilities, and supplies. For example, Darlene Brannan, a provider, used child care stabilization funds from the American Rescue Plan Act (ARPA) to reduce tuition, raise staff pay to about $20 an hour, offer professional development, and bring in new toys and furniture to make it a great place for kids during a stressful time at Kids Korner Academy in Durham, North Carolina. Providers from around the country report that the funds were a lifeline, and a number of states who saw the success and possessed the political will, invested state dollars to continue supporting the child care sector.
Supporting Children and Families Requires Building, Not Destroying
At a time when American families need more child care support, not less, Republicans are threatening to eliminate child care for 40,000 children to pay for massive tax breaks for billionaires. Additionally, the mass firings at the U.S. Department of Health and Human Services (HHS), including the offices at the Administration for Children and Families (ACF) that administer child care and Head Start programs and many of their regional offices, will make child care even less accessible and affordable, as well as less safe. Recent announcements from HHS about deep cuts to program supports could mean that the national technical assistance centers that support strong child care policies for children, families, and child care providers across all states would face reductions or eliminations of funding, which would only compound child care scarcity.
While there are proposals to address the problems with America’s system of child care through the tax code, these proposals fail to address its fundamental challenges. For example, a number of bills to expand the Child and Dependent Care Tax Credit (CDCTC) have recently been introduced. While the CDCTC helps offset child and dependent care costs, it only offsets a small fraction of those costs. Furthermore, as a once-a-year credit that arrives only during tax season, it’s not a helpful tool for families that need to pay for child and dependent care up front, week in, week out. In addition, the CDCTC does nothing to address the problem of child care deserts. All told, it does little to expand the child care choices for families. In other words, it only helps if you already have access to the child care of your choice, and the resources to pay for it. As such, an improved CDCTC should only be considered as a complementary policy that serves to reduce the tax burden of those paying for child and dependent care.
To address the broader challenges facing the child care sector right now, we must look to more robust investments, such as those in the Building Child Care for a Better Future Act. Such investments would have immediate impact on core child care challenges by lowering costs for families, increasing parents’ child care options, and protecting children’s health and safety.
Shoring up and increasing funding for the existing child care policies must be the starting point. Building from there, the United States needs to adopt child care and early learning policies that give every family affordable and easy-to-access options to meet their needs and support a diverse child care workforce, where all providers earn a thriving wage.
Tags: child development, childcare, child care crisis
Building Child Care for a Better Future
Every parent should have the freedom to go to work knowing their children are being cared for in safe environments by nurturing caregivers and early educators that will support their children’s development and well-being. Most families with young children have all available parents in the workforce, and we know that when parents have high-quality, reliable, affordable child care, children are safer and more likely to arrive at kindergarten ready to succeed and families are stronger and better able to thrive. Good child care options also support parents’ ability to work, family income to rise, and our country’s economic engine to be stronger.
But today, America’s broken market system of child care means that high prices are a major strain on family budgets, many parents struggle to find child care options that meet their needs, and that these high costs and scarcity lead many parents to be underemployed or forgo employment altogether to instead care for their children, creating fiscal instability for these families. At the same time, the amount that parents pay for care is often not enough to support stable operations or high-quality care, and so the child care sector is suffering from scarcity due to it being an untenable business model and a workforce crisis because of low pay and poor benefits. Only transformative public investment can ensure that all working Americans can find, choose, and afford the child care that meets their families’ needs.
Until Congress is ready to pass transformative pro-family child care legislation, a serious increase in funding to the existing federal child care program—the Child Care and Development Fund program (CCDF), also known as the Child Care and Development Block Grant (CCDBG)—is urgently needed to immediately lower the child care costs for millions of Americans working hard to juggle the strain of child care bills with groceries and housing costs.
The most recent data shows that about 1.4 million children receive child care assistance every month through CCDF. CCDF provides child care assistance for working families with income below 85 percent of state median income (SMI); 85 percent SMI would mean, for example, families with incomes below $103,000 in Pennsylvania, $81,000 in Louisiana, or $89,000 in North Carolina would be federally eligible for child care subsidies. But only about one in seven eligible families actually receive this assistance because there isn’t enough federal funding to help all who are eligible.
In 2024, the Office of Child Care issued new rules that make the program even more affordable and impactful, lowering costs for families and improving payment practices for providers so that participating families could have better child care choices and so that providers would be more willing to serve children with CCDF subsidies.
Child care champions on both sides of the aisle in Congress for years have been calling for more funding to ensure that eligible children and families receive subsidies and that the program’s resources are substantial enough to cover providers’ costs like early educator salaries and benefits; it is time for more substantial financial support.
Building Child Care for a Better Future
The Building Child Care for a Better Future Act, recently introduced by Senators Ron Wyden and Elizabeth Warren, Representative Danny Davis, and other champions, would improve the lives of millions of American families who rely on child care to go to work, feed their families, and put a roof over their heads. It expands guaranteed federal child care funding to immediately lower child care costs for more than one million families. It also provides additional funding to states to improve child care supply and quality, which will help even more families.
Specifically, the bill includes two important investments. First, it would increase annual funding for the “mandatory” funding portion of CCDF—the Child Care Entitlement to States (CCES)—to $20 billion per year (a $16.45 billion increase per year). Nearly 88 percent of this $16.45 billion increase would go directly to families to reduce their child care costs and about 12 percent of it would be used by states to ensure child care safety, improve child care quality, and increase child care supply with significant flexibility for each state to determine how to meet the unique child care needs in its state. Second, it includes $5 billion per year for a new grant program specifically for states to strengthen the child care workforce and improve supply, quality, and access in areas of particular need.
“Mandatory” federal funding for child care is particularly important because it is not part of the annual Congressional appropriations process (funding known as “discretionary”), which is subject to the annual political fighting that has led to unpredictable and piecemeal funding to states. Instead, mandatory funding is automatically appropriated on an ongoing basis, unless there is a change in the underlying authorizing law. It allows states to plan around the funding that they are expecting to receive, and families and child care providers to be able to count on annual support.
The Need to Build Child Care Supply
The Building Child Care for a Better Future Act’s new investment specifically in child care supply and quality is important to ensure that parents have real choices and lower prices. These funds would benefit all families, including those that don’t receive CCDBG subsidies, by helping to build out the supply of child care for diverse families in communities around the nation. Many parents cannot find the child care they need because there simply is not enough to meet the needs of our country’s parents. Parents seeking care for their infants and toddlers, care in rural areas, or care outside the hours of a traditional 9:00 a.m.–5:00 p.m., Monday–Friday work week are particularly likely to have trouble finding appropriate child care for their families. This is an inescapable outcome of America’s current reliance on a broken market system for child care and one of the reasons families desperately need transformative child care reform.
Child care centers and family child care programs operate on razor-thin margins. The cost of operating a program is inherently labor intensive to ensure basic child safety, as well as to provide adequate support for children’s development. Recent discussion of deregulation or the warehousing of children without regard to who cares for them is not the answer to this problem, as it will lead to children’s death and injury, more children with behavioral and learning challenges in school, and make it harder for parents to find appropriate care.
Unfortunately, the child care deserts that existed before the pandemic—in which half of all families could not find licensed child care in their communities—persist. Though pandemic relief funds staved off the worst of the feared decline in supply and slots during the pandemic, approximately 20,000 programs still closed at the height of the pandemic. Family child care programs, in particular, have been on a declining trendline, while the supply of child care centers has remained flat. Incomplete data poses challenges, but according to Child Care Aware ® of America’s 2023 data, nationwide, there has been a 12 percent decline in licensed family child care homes since 2019, and a modest 1.3 percent increase in child care centers. In addition, a February 2025 NAEYC survey of more than 10,000 child care providers found that 56 percent of child care providers were aware of at least one program closing in their community in the last year.
The pandemic relief funding—in particular, the $24 billion in federal child care stabilization funds—showed just how effective federal investments in supply building can be. Those funds reached more than 220,000 child care providers across the United States, and were used to temporarily pay higher wages through bonuses and stipends, support benefits like health insurance, and cover nonlabor operating expenses such as rent, mortgage, utilities, and supplies. For example, Darlene Brannan, a provider, used child care stabilization funds from the American Rescue Plan Act (ARPA) to reduce tuition, raise staff pay to about $20 an hour, offer professional development, and bring in new toys and furniture to make it a great place for kids during a stressful time at Kids Korner Academy in Durham, North Carolina. Providers from around the country report that the funds were a lifeline, and a number of states who saw the success and possessed the political will, invested state dollars to continue supporting the child care sector.
Supporting Children and Families Requires Building, Not Destroying
At a time when American families need more child care support, not less, Republicans are threatening to eliminate child care for 40,000 children to pay for massive tax breaks for billionaires. Additionally, the mass firings at the U.S. Department of Health and Human Services (HHS), including the offices at the Administration for Children and Families (ACF) that administer child care and Head Start programs and many of their regional offices, will make child care even less accessible and affordable, as well as less safe. Recent announcements from HHS about deep cuts to program supports could mean that the national technical assistance centers that support strong child care policies for children, families, and child care providers across all states would face reductions or eliminations of funding, which would only compound child care scarcity.
While there are proposals to address the problems with America’s system of child care through the tax code, these proposals fail to address its fundamental challenges. For example, a number of bills to expand the Child and Dependent Care Tax Credit (CDCTC) have recently been introduced. While the CDCTC helps offset child and dependent care costs, it only offsets a small fraction of those costs. Furthermore, as a once-a-year credit that arrives only during tax season, it’s not a helpful tool for families that need to pay for child and dependent care up front, week in, week out. In addition, the CDCTC does nothing to address the problem of child care deserts. All told, it does little to expand the child care choices for families. In other words, it only helps if you already have access to the child care of your choice, and the resources to pay for it. As such, an improved CDCTC should only be considered as a complementary policy that serves to reduce the tax burden of those paying for child and dependent care.
To address the broader challenges facing the child care sector right now, we must look to more robust investments, such as those in the Building Child Care for a Better Future Act. Such investments would have immediate impact on core child care challenges by lowering costs for families, increasing parents’ child care options, and protecting children’s health and safety.
Shoring up and increasing funding for the existing child care policies must be the starting point. Building from there, the United States needs to adopt child care and early learning policies that give every family affordable and easy-to-access options to meet their needs and support a diverse child care workforce, where all providers earn a thriving wage.
Tags: child development, childcare, child care crisis