Everybody who’s paying attention knows that the childcare system in the U.S. is an overloaded ship taking on water far from shore that only stays afloat on the backs of exhausted and underpaid workers. Successive administrations have made attempts to overhaul it, but, to date, bailing it out has been seen as the only viable option.
Among the many burdens sinking the system are that childcare workers are paid too little to make a sustainable living, while childcare prices are too high for most families to afford. During the pandemic, this impossible math was thrown into sharp relief and one in 12 workers left the industry. Childcare centers closed, parents were left with few options, and women left the workforce in droves. By and large, those childcare workers have not returned.
The doom spiral of unaffordable childcare engulfs those with fewer resources with particular ferocity. While those educated parents who work in highly skilled jobs may get financial and workplace support from their employers, or have the wherewithal to pay for a carer, parents who can’t afford childcare often leave work or education to care for their small children and thus end up with even fewer resources than before and fewer routes out of their predicament.
The most recent bailout of the childcare system, which came via the American Rescue Plan, expires at the end of September. On July 11, the Biden Administration announced its newest attempt to patch some of the more obvious holes with proposals that aim to cap eligible families’ childcare payments at 7% of their income, eliminate co-payments altogether for particularly poor families, and streamline the process for getting that money to childcare centers. The administration’s new guidelines for The Department of Health and Human Services (HHS) follow an executive order that Biden announced in April, and according to a senior administration official, would be supported by existing resources.
The idea is to use a preexisting childcare reimbursement program known as the CCDBG (Child Care and Development Block Grant) to get more money to those who need it and try to root out some of the inefficiencies. That grant currently reaches about 1.5 million families. HHS estimates the average amount families who benefited from the block grant paid after the subsidy rose nearly 20% between 2005 and 2021.
“Let’s take a family in Montana making $46,000 a year,” said Vice President Kamala Harris, in announcing the plan. “They could save about $80 every month, or almost $1,000 a year. That money could go to gas and groceries or to fix a leak in their roof.” The Administration believes that capping childcare co-payments at 7% of income would allow nearly 80,000 families to lower their childcare bills.
The Administration also seeks to encourage those states using the CCDBG—which, as an administration official pointed out, is every state—to make the process of getting the money to childcare centers go more smoothly. For a lot of childcare providers, which are typically small businesses, enrolling CCDBG-eligible families requires an onerous amount of extra work. They often have to wait until the middle of the month or longer to get paid, even though they incur costs from the beginning of the month.
The Administration wants states to pay the childcare centers for placements at the beginning of the month, to pay the centers for the children that are enrolled rather those who actually attend every day, and to allow families to apply online for the grants. In this way it hopes to stabilize what has been a notoriously rocky industry. “Overall, if states participate in this initiative, over 350,000 families could save money on childcare payments, and more than 200,000 providers will benefit from these changes as well,” Harris said.
Close observers might note that the proposals are similar to, although less ambitious than, those that were left on the cutting-room floor when the Inflation Reduction Act passed. “You will recall that the President and I have been talking about that 7% for two and a half years, and the importance of bringing down the cost of childcare for working families in America,” noted Harris. Even closer observers might notice that they’re also reminiscent of legislation proposed by Republican senators Tim Scott and Richard Burr in March 2022 for expanding the reach of the CCDBG.
Polling from politically neutral outlets consistently shows that voters see sustained and robust childcare initiatives as a good investment of taxpayer dollars. Indeed the issue was once so bipartisan that the closest the U.S. ever came to having a fully funded childcare system was under the administration of President Nixon, who vetoed it.
Saying that the issue was personal for her, Vice President Harris spoke of her mother’s twin desires to look after her children and find a cure for breast cancer. “When she [worked], my sister and I would walk two doors down to the home of Mrs. Regina Shelton,” said Harris. “Ms. Shelton ran a childcare center and she became a second mother to my sister and me. My mother often said that but for Mrs. Shelton she would never have been able to do the work that she did.”
Like a cure for breast cancer, the solution for America’s childcare difficulties remains elusive. The new proposals will be open for public comment for 45 days, and after the Administration for Children and Families has reviewed and responded to those comments, the final guidelines will go into effect in the spring of 2024.
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