America has a child care crisis that’s hurting millions of families every day, and Trump and Congressional Republicans are failing to help working Americans address this growing problem. Families are already feeling the squeeze from rising inflation and Trump’s tariffs have caused large spikes in costs to basic baby items and back-to-school supplies. The child care crisis makes it even more expensive to raise a family: it disrupts parents’ employment, reduces earnings and savings, and it hurts parent wellbeing and family life. Parents need child care to go to work, but with the national cost of care for one child averaging $13,000 a year and not enough child care for families who need it, families are finding it harder and harder to access care they can afford. The bottom line is parents can’t find or afford the child care they need, and providers can’t charge high enough fees to stay afloat or pay staff enough to keep them so there isn’t enough child care to meet parents’ needs. The economics of our child care system simply don’t work, and this inescapable fact is making life worse for millions of American families.
In the face of this crisis, Trump and Congressional Republicans are eager to convince the public they are lowering child care costs, but press releases, speeches claiming wins for working families, and a few hundred dollars at the end of the tax year are no substitute for effective solutions that truly make child care affordable and available for ordinary Americans. Despite what they want people to believe, a look at the actions by Trump and Congressional Republicans since they took power in 2025 makes clear they don’t intend to fix this problem for working families and in fact are making the child care crisis worse.
Republican Megabill Provides Little Help for Child Care While Exacerbating Crisis
The Republicans’ new megabill that gives trillions of dollars in tax cuts to billionaires and corporations and cuts Medicaid and food assistance for millions of Americans is not a win for working families and provides little help with child care—though Republicans want to convince people otherwise. Most of the new law’s policies are extremely unpopular, which is why Republicans were met with angry constituents at town hall gatherings in August and they’ve hired consultants to help them rebrand it for the public. But this massive giveaway to the rich provides most Americans little help for child care and the law’s other provisions actually will make the child care crisis much worse.
The megabill does include a few small updates to the tax code related to child care, but they provide no child care help to the poorest families, only a small bit of help to others, and do nothing to fundamentally change the child care supply issues that make child care so expensive and hard to find in the first place. Recent polling confirms parents don’t think these small changes are enough to fix what they see as a “crisis” and “major problem.” The Child and Dependent Care Tax Credit (CDCTC), which can offset a portion of child care costs for some families, gets an update so about 4.4 million families should now get a little more from the CDCTC starting next year. This is good—but Republicans didn’t make the credit big enough to truly help Americans with the high cost of care or to allow all working Americans to claim the credit.
Among families getting a larger credit because of the new law, the annual credit will increase by less than $400 per family (see Figure 1), far short of what families need when the average annual cost of care for one child is over $13,000. And the updates provide almost no benefit to any family with income less than about $35,000. Also, because CDCTC offsets only come once a year at tax time, it doesn’t help families if they are living paycheck to paycheck or need help paying child care bills at the end of each month.
Figure 1
The new law also updates two other child care tax provisions, but this also won’t help most Americans. It increases the amount of tax-exempt income workers can set aside for child care expenses as part of a dependent care assistance program (DCAP), if such a program is offered by their employer. But research shows DCAP mostly benefits higher-income earners. The law also updates the Employer-Provided Child Care Credit (known as 45F), a tax law that has yet to have much impact since enacted in 2001. Its unrealized hope has been it will address child care supply issues because it provides a tax incentive to businesses to create and/or subsidize child care programs. The credit has had little uptake, seeming to act more as a financial reward for big business rather than an incentive. The new law includes some changes intended to make it more appealing to small businesses, but it’s unlikely they have the capacity to build community child care supply in a way many families will feel. And when the world’s most profitable corporations are structuring their businesses to help the rich get richer at the expense of everyone else, waiting on big business to solve our country’s child care crisis is unlikely to be the solution families are waiting for.
Unfortunately, these small child care tax updates are eclipsed by the megabill’s unprecedented cuts to health insurance and food assistance and the mandates it places on states, which will make the child care crisis worse for millions of families. The law’s cuts to Medicaid will hit the child care workforce particularly hard and have major ripple effects. Few child care workers have access to employer-sponsored health care, so about 28 percent rely on Medicaid for health insurance. The child care workforce also relies on the Supplemental Nutrition Assistance Program (SNAP) to feed their families because the profession’s wages are so low. So the law’s massive cuts to these programs will hit this sector hard, and many child care workers will lose their health care and some will see their food costs rise. This will cause more child care workers to leave their jobs, lowering the supply of child care and making it even harder for parents to find and afford.
The law also makes unprecedented shifts of billions of dollars in costs for health and food assistance from the federal government to state governments, which will place huge new pressures on state budgets. Governors are already beginning to consider what programs they will need to cut in order to balance state budgets and deal with the fallout of the federal program cuts; it is likely that some state and local investments in child care and pre-kindergarten will be at risk. Decreases in these important public investments will cause family child care bills to rise and child care programs to close. And of course, as families see their own health and food costs rise under this law, paying for child care will become even more difficult.
Republicans’ Annual Budget Provides No Help
When Democrats were trying to pass transformative child care investments in 2021, Congressional Republicans opposed, claiming that, instead, investments should be made into the existing federal child care program, the Child Care and Development Fund program (CCDF), which provides funding to states to subsidize child care for working families and build the supply of high-quality child care for all children. Nearly 1 million families receive assistance every month through CCDF, but low funding means eighty-five percent of eligible families do not receive assistance. Now in control of federal spending, Republicans have the opportunity to do just what they claimed, but instead they are proposing to cut child care spending.
Trump’s budget for Fiscal year 2026 proposes to cut child care assistance for thousands of families, and the House Republicans passed a bill following that blueprint. The House Republican bill provides flat funding for the CCDF, eliminates the Child Care Access Means Parents In School program (CCAMPIS), and eliminates the Preschool Development Grant program (PDG) for FY 2026. Flat-funding CCDF means child care assistance programs can’t keep pace with rising child care costs and families stay on waitlists. Eliminating CCAMPIS, which provides child care assistance for low-income college students, would immediately raise child care costs for thousands of lower-income families. Eliminating PDG, which states use to help sustain an early childhood workforce among other key activities, will force state agencies to cancel critical child care and pre-kindergarten initiatives that have kept the child care crisis from being worse than it is.
Rolling Back Regulations, Hurting Child Care Businesses and the Families That Rely on Them
The Trump administration has told state child care agencies they no longer need to implement 2024 child care regulations and that new regulations would be forthcoming, another blow to child care providers and families. Rolling back these regulations harms child care providers (overwhelmingly small businesses) and will further destabilize the child care sector, making program closures more likely, and reducing parents’ child care options. These CCDF regulations put in place during the Biden administration help stabilize the child care sector by requiring states to pay child care providers who serve children participating in CCDF more fairly and on time, allowing more stable business operations and making it easier for them to serve children with subsidies and keep their doors open. Since more than 140,000 licensed or registered child care providers serve children participating in CCDF (more than half of all licensed and registered providers), this benefits the sector and families broadly.
Specifically, the 2024 regulations included two key regulations to help child care providers and the families who rely on them. States were given two years to start:
- Paying providers serving a child participating in CCDF at the beginning of service instead of weeks after services began. This helps stabilize child care operations, which is why private pay parents typically must pay providers at the beginning of service. It’s an overdue alignment with the law, which requires states to use “generally-accepted” payment practices. Timely payment is necessary when small businesses have such thin profit margins and makes providers much more willing to serve children paying by subsidy.
- Paying providers based on a child’s enrollment in a program, not based on their attendance. This payment structure reflects the fixed cost of operating a child care business, which is why it’s standard for private-pay parents. Staff costs and rent are fixed regardless of child absence and if a state doesn’t pay for days a child is absent, the cost is shouldered by the provider, which is destabilizing to their operations, decreases the likelihood they will serve children paying with subsidies, and makes it harder for them to keep their doors open. This is also an overdue alignment with the law’s requirement that states use “generally-accepted” payment practices.
Halting or slowing state progress on these reforms by reversing these CCDF regulations will only hurt child care providers and the families that rely on them, and the Trump administration’s rationale isn’t compelling. The Trump administration’s call to replace the regulations in the name of “returning flexibility to states” surely isn’t some principled stance on states’ rights, since Trump has shown unprecedented and extreme disregard for state rights. Whatever the true rationale, the impact is clear: child care providers and the families who rely on them will be hurt by the move.
Mass Layoffs by DOGE Makes Federal Child Care Program Less Effective and Efficient
While the Trump mass layoffs of federal staff may seem like old news by now, Trump’s Department of Government Efficiency (DOGE) cut the U.S. Department of Health and Human Services Office of Child Care (OCC)—the federal office that administers the CCDF program—by half this spring, including closing five of ten regional offices without any assessment of program operations or needs, an ignorant and short-sighted act. The OCC is staffed by experts in federal and state child care policy, fiscal management, child development, data analysis, and monitoring and oversight. They help support state, territory, and tribal governments in their implementation of the $12 billion federal child care program and make sure federal dollars are maximized to help meet each state’s specific child care challenges and opportunities.
Good public policy requires strong program support by experts. Firing half the people responsible for the implementation and oversight of this critical federal program that benefits nearly every child in care across the country makes the program less effective and efficient and, ultimately, makes child care less safe, less affordable, and harder to find for everyone.
Conclusion
America’s child care crisis isn’t a problem that will go away on its own. Instead of solutions, Trump and Congressional Republicans passed a megabill with child care tax updates too small to fundamentally change how families are experiencing the child care crisis, while making it harder for child care workers to keep their jobs, harder for states to maintain their own child care investments, and harder for families to pay their bills. They’re looking to cut the child care funding the federal government provides and roll back regulations that child care providers desperately need.
The underlying problems driving the child care crisis require a solution that reduces parents’ high costs while building a sufficient and stable supply of quality child care and addressing staff compensation to maintain a workforce. For all families to have the reliable affordable care they need and for businesses to have the reliable workforce they need, significant new public investments are a must—like those that Democrats in Congress almost passed in 2021 or like Governor Michelle Lujan Grisham has invested in for New Mexico. American families need real help right now.
Acknowledgment: The author would like to thank Margot Crandall-Hollick with the Urban-Brookings Tax Policy Center for her valuable input on this commentary.
Tags: child care crisis, republican megabill, donald trump
Trump and Republicans in Congress Are Making the Child Care Crisis Even Worse
America has a child care crisis that’s hurting millions of families every day, and Trump and Congressional Republicans are failing to help working Americans address this growing problem. Families are already feeling the squeeze from rising inflation and Trump’s tariffs have caused large spikes in costs to basic baby items and back-to-school supplies. The child care crisis makes it even more expensive to raise a family: it disrupts parents’ employment, reduces earnings and savings, and it hurts parent wellbeing and family life. Parents need child care to go to work, but with the national cost of care for one child averaging $13,000 a year and not enough child care for families who need it, families are finding it harder and harder to access care they can afford. The bottom line is parents can’t find or afford the child care they need, and providers can’t charge high enough fees to stay afloat or pay staff enough to keep them so there isn’t enough child care to meet parents’ needs. The economics of our child care system simply don’t work, and this inescapable fact is making life worse for millions of American families.
In the face of this crisis, Trump and Congressional Republicans are eager to convince the public they are lowering child care costs, but press releases, speeches claiming wins for working families, and a few hundred dollars at the end of the tax year are no substitute for effective solutions that truly make child care affordable and available for ordinary Americans. Despite what they want people to believe, a look at the actions by Trump and Congressional Republicans since they took power in 2025 makes clear they don’t intend to fix this problem for working families and in fact are making the child care crisis worse.
Republican Megabill Provides Little Help for Child Care While Exacerbating Crisis
The Republicans’ new megabill that gives trillions of dollars in tax cuts to billionaires and corporations and cuts Medicaid and food assistance for millions of Americans is not a win for working families and provides little help with child care—though Republicans want to convince people otherwise. Most of the new law’s policies are extremely unpopular, which is why Republicans were met with angry constituents at town hall gatherings in August and they’ve hired consultants to help them rebrand it for the public. But this massive giveaway to the rich provides most Americans little help for child care and the law’s other provisions actually will make the child care crisis much worse.
The megabill does include a few small updates to the tax code related to child care, but they provide no child care help to the poorest families, only a small bit of help to others, and do nothing to fundamentally change the child care supply issues that make child care so expensive and hard to find in the first place. Recent polling confirms parents don’t think these small changes are enough to fix what they see as a “crisis” and “major problem.” The Child and Dependent Care Tax Credit (CDCTC), which can offset a portion of child care costs for some families, gets an update so about 4.4 million families should now get a little more from the CDCTC starting next year. This is good—but Republicans didn’t make the credit big enough to truly help Americans with the high cost of care or to allow all working Americans to claim the credit.
Among families getting a larger credit because of the new law, the annual credit will increase by less than $400 per family (see Figure 1), far short of what families need when the average annual cost of care for one child is over $13,000. And the updates provide almost no benefit to any family with income less than about $35,000. Also, because CDCTC offsets only come once a year at tax time, it doesn’t help families if they are living paycheck to paycheck or need help paying child care bills at the end of each month.
Figure 1
The new law also updates two other child care tax provisions, but this also won’t help most Americans. It increases the amount of tax-exempt income workers can set aside for child care expenses as part of a dependent care assistance program (DCAP), if such a program is offered by their employer. But research shows DCAP mostly benefits higher-income earners. The law also updates the Employer-Provided Child Care Credit (known as 45F), a tax law that has yet to have much impact since enacted in 2001. Its unrealized hope has been it will address child care supply issues because it provides a tax incentive to businesses to create and/or subsidize child care programs. The credit has had little uptake, seeming to act more as a financial reward for big business rather than an incentive. The new law includes some changes intended to make it more appealing to small businesses, but it’s unlikely they have the capacity to build community child care supply in a way many families will feel. And when the world’s most profitable corporations are structuring their businesses to help the rich get richer at the expense of everyone else, waiting on big business to solve our country’s child care crisis is unlikely to be the solution families are waiting for.
Unfortunately, these small child care tax updates are eclipsed by the megabill’s unprecedented cuts to health insurance and food assistance and the mandates it places on states, which will make the child care crisis worse for millions of families. The law’s cuts to Medicaid will hit the child care workforce particularly hard and have major ripple effects. Few child care workers have access to employer-sponsored health care, so about 28 percent rely on Medicaid for health insurance. The child care workforce also relies on the Supplemental Nutrition Assistance Program (SNAP) to feed their families because the profession’s wages are so low. So the law’s massive cuts to these programs will hit this sector hard, and many child care workers will lose their health care and some will see their food costs rise. This will cause more child care workers to leave their jobs, lowering the supply of child care and making it even harder for parents to find and afford.
The law also makes unprecedented shifts of billions of dollars in costs for health and food assistance from the federal government to state governments, which will place huge new pressures on state budgets. Governors are already beginning to consider what programs they will need to cut in order to balance state budgets and deal with the fallout of the federal program cuts; it is likely that some state and local investments in child care and pre-kindergarten will be at risk. Decreases in these important public investments will cause family child care bills to rise and child care programs to close. And of course, as families see their own health and food costs rise under this law, paying for child care will become even more difficult.
Republicans’ Annual Budget Provides No Help
When Democrats were trying to pass transformative child care investments in 2021, Congressional Republicans opposed, claiming that, instead, investments should be made into the existing federal child care program, the Child Care and Development Fund program (CCDF), which provides funding to states to subsidize child care for working families and build the supply of high-quality child care for all children. Nearly 1 million families receive assistance every month through CCDF, but low funding means eighty-five percent of eligible families do not receive assistance. Now in control of federal spending, Republicans have the opportunity to do just what they claimed, but instead they are proposing to cut child care spending.
Trump’s budget for Fiscal year 2026 proposes to cut child care assistance for thousands of families, and the House Republicans passed a bill following that blueprint. The House Republican bill provides flat funding for the CCDF, eliminates the Child Care Access Means Parents In School program (CCAMPIS), and eliminates the Preschool Development Grant program (PDG) for FY 2026. Flat-funding CCDF means child care assistance programs can’t keep pace with rising child care costs and families stay on waitlists. Eliminating CCAMPIS, which provides child care assistance for low-income college students, would immediately raise child care costs for thousands of lower-income families. Eliminating PDG, which states use to help sustain an early childhood workforce among other key activities, will force state agencies to cancel critical child care and pre-kindergarten initiatives that have kept the child care crisis from being worse than it is.
Rolling Back Regulations, Hurting Child Care Businesses and the Families That Rely on Them
The Trump administration has told state child care agencies they no longer need to implement 2024 child care regulations and that new regulations would be forthcoming, another blow to child care providers and families. Rolling back these regulations harms child care providers (overwhelmingly small businesses) and will further destabilize the child care sector, making program closures more likely, and reducing parents’ child care options. These CCDF regulations put in place during the Biden administration help stabilize the child care sector by requiring states to pay child care providers who serve children participating in CCDF more fairly and on time, allowing more stable business operations and making it easier for them to serve children with subsidies and keep their doors open. Since more than 140,000 licensed or registered child care providers serve children participating in CCDF (more than half of all licensed and registered providers), this benefits the sector and families broadly.
Specifically, the 2024 regulations included two key regulations to help child care providers and the families who rely on them. States were given two years to start:
Halting or slowing state progress on these reforms by reversing these CCDF regulations will only hurt child care providers and the families that rely on them, and the Trump administration’s rationale isn’t compelling. The Trump administration’s call to replace the regulations in the name of “returning flexibility to states” surely isn’t some principled stance on states’ rights, since Trump has shown unprecedented and extreme disregard for state rights. Whatever the true rationale, the impact is clear: child care providers and the families who rely on them will be hurt by the move.
Mass Layoffs by DOGE Makes Federal Child Care Program Less Effective and Efficient
While the Trump mass layoffs of federal staff may seem like old news by now, Trump’s Department of Government Efficiency (DOGE) cut the U.S. Department of Health and Human Services Office of Child Care (OCC)—the federal office that administers the CCDF program—by half this spring, including closing five of ten regional offices without any assessment of program operations or needs, an ignorant and short-sighted act. The OCC is staffed by experts in federal and state child care policy, fiscal management, child development, data analysis, and monitoring and oversight. They help support state, territory, and tribal governments in their implementation of the $12 billion federal child care program and make sure federal dollars are maximized to help meet each state’s specific child care challenges and opportunities.
Good public policy requires strong program support by experts. Firing half the people responsible for the implementation and oversight of this critical federal program that benefits nearly every child in care across the country makes the program less effective and efficient and, ultimately, makes child care less safe, less affordable, and harder to find for everyone.
Conclusion
America’s child care crisis isn’t a problem that will go away on its own. Instead of solutions, Trump and Congressional Republicans passed a megabill with child care tax updates too small to fundamentally change how families are experiencing the child care crisis, while making it harder for child care workers to keep their jobs, harder for states to maintain their own child care investments, and harder for families to pay their bills. They’re looking to cut the child care funding the federal government provides and roll back regulations that child care providers desperately need.
The underlying problems driving the child care crisis require a solution that reduces parents’ high costs while building a sufficient and stable supply of quality child care and addressing staff compensation to maintain a workforce. For all families to have the reliable affordable care they need and for businesses to have the reliable workforce they need, significant new public investments are a must—like those that Democrats in Congress almost passed in 2021 or like Governor Michelle Lujan Grisham has invested in for New Mexico. American families need real help right now.
Acknowledgment: The author would like to thank Margot Crandall-Hollick with the Urban-Brookings Tax Policy Center for her valuable input on this commentary.
Tags: child care crisis, republican megabill, donald trump