Chapter 9: Child Care

Child Care Introduction and Overview

Introduction

Child care has been an ongoing issue of public policy concern primarily because, in most American families with children, parents are working outside the home and must arrange for care for their children.  This is true regardless of whether parents are married or unmarried and regardless of the age of their children, although mothers of school-age children have a higher rate of employment than mothers of preschoolers.  Thus, some form of child care is a fact of life for the majority of families with children, and federal grants and tax credits exist to help offset the expense for those who purchase child care.

Over time, policymakers have debated the appropriate federal role in addressing questions of availability, affordability, and quality of child care.  The role of child care as a work support for low-income and welfare-recipient families has been a particular focus of debate.  In recent years, child care as a policy issue has broadened into the related areas of early childhood development and education, as research has focused on the connection between children’s early experiences and their successful long-term development.  Child care discussions increasingly include a focus on content and quality, while discussions of early childhood development and education increasingly address the need for coordination with child care services to fit the schedules of working families.   

The federal government has used a number of different strategies to invest in child care, including broad-based social programs as well as targeted child care programs and tax provisions.  This section of the Green Book focuses primarily on the Child Care and Development Fund (CCDF), a term used to refer to the combination of mandatory and discretionary child care funding streams administered jointly by the U.S. Department of Health and Human Services (HHS).  The CCDF is the primary source of federal funding dedicated solely to child care subsidies for low-income working and welfare families.

The FY2014 funding level for the CCDF was roughly $5.3 billion, which included $2.4 billion in discretionary funds and $2.9 billion in mandatory funds.  Discretionary CCDF funding is authorized by the Child Care and Development Block Grant Act of 1990 (as amended).  Mandatory CCDF funding is authorized in Section 418 of the Social Security Act (sometimes referred to as the "Child Care Entitlement to States").

The CCDF provides block grants to states, according to a formula, which are used to subsidize the child care expenses of working families with children under age 13.  In addition to providing funding for child care services, funds are also used for activities intended to improve the overall quality and supply of child care for families in general.

Chapter Overview

This chapter of the Green Book includes a Congressional Research Service (CRS) Report on the CCDF (CRS Report RL30785).  One section identifies Tables and Figures found in this report, while a separate section includes Additional Tables and Figures that provide historical and current data on CCDF program statistics and funding.  A limited number of these tables go beyond the scope of the CCDF, providing contextual information on labor force participation of mothers and average wages of child care workers.  This chapter of the Green Book also includes a Legislative History of federal spending on child care, with a focus on the evolution and implementation of the CCDF.  Finally, this chapter concludes with a list of Links to Additional Resources, including links to CCDF administrative and expenditure data published by the U.S. Department of Health and Human Services, as well as national estimates of child care costs and arrangements produced by the U.S. Census Bureau.

This page was prepared on September 8, 2014, for the 2014 version of the House Ways and Means Committee Green Book.

Child Care Congressional Research Service (CRS) Reports

The House Ways and Means Committee is making available selected reports by the Congressional Research Service (CRS) for inclusion in its 2014 Green Book website.  CRS works exclusively for the United States Congress, providing policy and legal analysis to Committees and Members of both the House and Senate, regardless of party affiliation.

RL30785: The Child Care and Development Block Grant: Background and Funding

This page was prepared on September 8, 2014, for the 2014 version of the House Ways and Means Committee Green Book.

Child Care Tables and Figures in CRS Reports

The following figure and tables related to child care can be found in the CRS report included in this Green Book chapter.

RL30785: The Child Care and Development Block Grant: Background and Funding

Table 1. Funding Trends in the CCDF, FY1997-FY2014

Table 2. FY2014 CCDF Allocations

Table A-1. FY2009 CCDF Allocations

Figure 1. Child Care Programs Before and After Welfare Reform in 1996

This page was prepared on September 8, 2014, for the 2014 version of the House Ways and Means Committee Green Book.

Additional Tables and Figures Related to Child Care

Figure 9-1. Federal Funding Appropriated to the CCDF, FY1997-FY2014

Figure 9-2. Total Federal and State CCDF Expenditures, FY1997-FY2012

Figure 9-3. Total CCDF Expenditures (Federal and State) in Nominal and Constant FY2012 Dollars, FY1997-FY2012

Figure 9-4. CCDF Expenditures in Constant FY2012 Dollars and Average Monthly Children Served, FY1998-FY2012

Figure 9-5. Percent of Children Eligible Under State Rules Who Were Served by the CCDF in FY2011

Figure 9-6. Percent of Families Served by CCDF by Reason for Eligibility in FY2012

Figure 9-7. Percent of Children Served by CCDF by Age Group in FY2012

Figure 9-8. Percent of Children Served by CCDF by Payment Method in FY2012

Figure 9-9. Percent of Children Served by CCDF by Setting in FY2012

Figure 9-10. Average Monthly CCDF Provider Payment by Setting in FY2012

Figure 9-11. Average Monthly CCDF Provider Payment by Age Group in FY2012

Figure 9-12. Average Monthly CCDF Provider Payment by Setting and Age Group in FY2012

Table 9-1. Overview of Select Federal Programs that Support Child Care

Table 9-2. CCDF Funding History, FY1997-FY2014

Table 9-3. CCDF State Allocations Based on Appropriations for FY2014

Table 9-4. CCDF Expenditures in Nominal Dollars and Constant FY2012 Dollars, FY1997-FY2012

Table 9-5. Estimated Average Monthly Number of Families and Children Served by the CCDF, FY1998-FY2012

Table 9-6. Labor Force Participation Rates of Women by Presence and Age of Youngest Child, Selected Years, 1947-2012

Table 9-7. Labor Force Participation Rates of Women with Children by Marital Status and Age of Youngest Child, Selected Years, 1980-2012

Table 9-8. Labor Force Participation Rates of Women with Children Under 18 by Marital Status and Age of Youngest Child, March 2012

Table 9-9. Average Hourly Wages for Child Care Workers and Preschool Teachers, May 2013

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  • Figure 9-1. Federal Funding Appropriated to the CCDF, FY1997-FY2014 »
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  • Figure 9-2. Total Federal and State CCDF Expenditures, FY1997-FY2012 »
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  • Figure 9-3. Total CCDF Expenditures (Federal and State) in Nominal and Constant FY2012 Dollars, FY1997-FY2012 »
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  • Figure 9-4. CCDF Expenditures in Constant FY2012 Dollars and Average Monthly Children Served, FY1998-FY2012 »
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  • Figure 9-5. Percent of Children Eligible Under State Rules Who Were Served by the CCDF in FY2011 »
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  • Figure 9-6. Percent of Families Served by CCDF by Reason for Eligibility in FY2012 »
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  • Figure 9-7. Percent of Children Served by CCDF by Age Group in FY2012 »
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  • Figure 9-8. Percent of Children Served by CCDF by Payment Method in FY2012 »
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  • Figure 9-9. Percent of Children Served by CCDF by Setting in FY2012 »
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  • Figure 9-10. Average Monthly CCDF Provider Payment by Setting in FY2012 »
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  • Figure 9-11. Average Monthly CCDF Provider Payment by Age Group in FY2012 »
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  • Figure 9-12. Average Monthly CCDF Provider Payment by Setting and Age Group in FY2012 »
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  • Table 9-1. Overview of Select Federal Programs that Support Child Care »
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  • Table 9-2. CCDF Funding History, FY1997-FY2014 »
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  • Table 9-3. CCDF State Allocations Based on Appropriations for FY2014 »
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  • Table 9-4. CCDF Expenditures in Nominal Dollars and Constant FY2012 Dollars, FY1997-FY2012 »
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  • Table 9-5. Estimated Average Monthly Number of Families and Children Served by the CCDF, FY1998-FY2012 »
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  • Table 9-6. Labor Force Participation Rates of Women by Presence and Age of Youngest Child, Selected Years, 1947-2012 »
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  • Table 9-7. Labor Force Participation Rates of Women with Children by Marital Status and Age of Youngest Child, Selected Years, 1 »
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  • Table 9-8. Labor Force Participation Rates of Women with Children Under 18 by Marital Status and Age of Youngest Child, March 20 »
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  • Table 9-9. Average Hourly Wages for Child Care Workers and Preschool Teachers, May 2013 »
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    Child Care Legislative History

    The following provides a legislative history of Child Care during the 112th Congress through the first session of the 113th Congress.  For prior legislative history, please see the 2012 edition of the Green Book.

    In the aftermath of American Recovery and Reinvestment Act (ARRA), which was signed into law by President Obama on February 17, 2009 (P.L. 111-5), annual appropriations laws have generally provided slight increases in discretionary CCDBG funding.  Despite this, discretionary CCDBG funding available in FY2013 ($2.206 billion) decreased relative to FY2012 ($2.278 billion) as a result of budget sequestration.  Sequestration is a spending reduction process under which budgetary resources are permanently canceled to enforce budget policy goals.  While the final FY2014 appropriations law (P.L. 113-76) increased discretionary CCDBG funding to $2.360 billion, it did so following a sixteen day funding gap and shutdown of the federal government that occurred due to the failure of Congress and the President to enact appropriations prior to the start of the fiscal year.  Anticipating the possibility of a funding gap, the Acting Assistant Secretary for Children and Families at HHS released a letter to state child care officials in September 2013, clarifying that unspent child care funds from prior years would remain available for expenditure in accordance with existing obligation and liquidation timeframes.

    Notably, annual appropriations laws starting in FY2011 have also included changes to a CCDBG reservation for a national child care hotline.   The FY2011 appropriations law eliminated a CCDBG set-aside for the Child Care Aware toll-free hotline (typically funded at $1 million annually), a phone line staffed by child care consumer education specialists who respond to questions from parents and child care providers about elements of quality child care and how to locate child care programs in local communities.  However, the FY2012 law subsequently reserved roughly $1 million for a "competitive grant" (i.e., not an earmark directly to Child Care Aware) for the operation of a national toll-free hotline and website for the dissemination of child care consumer education and to help parents access child care in their communities.  The FY2013 and FY2014 appropriations laws continued to provide funding for this competitive grant.

    Meanwhile, the authorization and pre-appropriations for mandatory child care funding established by the DRA expired at the end of FY2010.  Since then, mandatory funding for child care has been provided through a series of short-term extensions, the most recent of which (P.L. 113-76) maintained mandatory child care funding at the same level ($2.917 billion) through September 30, 2014.  (Note that mandatory child care funds are exempt from budget sequestration, and thus were not reduced in FY2013.)

    This page was prepared on September 5, 2014, for the 2014 version of the House Ways and Means Committee Green Book.