Democrats Propose Historic Child Care Investment Through Reconciliation

It’s been more than two years since child care program closures shined a spotlight on our nation’s fragile child care system. And while other aspects of the economy have shown signs of recovery, the child care sector continues to be in crisis. Families cannot find and afford reliable care, providers are closing their doors, and long-time early educators are leaving the field because of unlivable wages. This is a classic example of a market failure⁠— this crisis is not going to solve itself and requires government intervention.

While the Biden administration’s Build Back Better plan, which laid out an ambitious early education agenda, has been stalled since December, there is still a chance to save the child care sector through budget reconciliation. Senators Patty Murray (WA), Chairwoman of the Senate Committee on Health, Education, Labor & Pensions, and Tim Kaine (VA) recently put forward a new child care proposal that could be passed within the reconciliation process. Their plan has five main components that would be implemented over six years:

• $72 billion over six years for the Child Care and Development Block Grant (CCDBG) to expand subsidy access, improve repayment rates, and support the workforce;
• Approximately $18 billion of the $72 billion would go towards Supply and Compensation Grants to improve existing facilities, build new child care facilities, and compensate early educators;
• A pilot program that is modeled after Build Back Better for states to expand child care assistance to middle-income families;
• $18 billion over six years in formula grants to states to expand access to pre-K;
• $12 billion over six years for Head Start, specifically to increase teacher compensation.

Last week, the Center for Law and Social Policy (CLASP) released an analysis estimating that one million new children would be served with the increase in CCDBG funding. Current CCDBG funding is woefully inadequate, only serving one out of every nine eligible children.

There are multiple benefits to investing in the existing CCDBG program. Since all states already participate in CCDBG, funding would be able to get to states quickly and all states would be included. This alleviates a concern that arose with the Build Back Better proposal that red states might opt out of the new child care entitlement program, potentially leaving a large portion of the country without access.

The pilot program modeled off of Build Back Better’s child care entitlement, termed the Child Care and Development Expansion program, would greatly expand access to child care assistance by limiting child care costs to no more than seven percent of income for families earning up to 250 percent of state median income. Participation in this program would be optional and would allow states that are willing and ready to try out broader reforms to their child care systems. The reach of this program would depend on final negotiations and specific funding levels.

Federal funds through the pre-K matching program would allow states to strengthen their programs and serve more children. A large and growing body of research shows that high-quality pre-K can benefit children’s short- and long-term development, providing them with valuable skills to succeed in school and in life. States would choose whether to opt into this program. While almost all states offer some state-funded program, access continues to vary depending on where a child lives. Supporting pre-K access is especially important now—according to the National Institute for Early Education Research, ”Across the 44 states, DC, and Guam that funded a preschool program in 2020-2021, 29% of 4-year-olds and 5% of 3-year-olds were enrolled, a substantial decrease from pre-pandemic levels, erasing a decade of growth in preschool enrollment.”

The final component of the Murray-Kaine proposal around Head Start teacher wages is particularly urgent in light of new findings from the National Head Start Association (NHSA) showing that “an estimated average of 30% of staff positions are currently unfilled.” According to NHSA, at least $2.5 billion per year is needed to raise compensation and solve this workforce crisis.

Earlier this year, Republican Senators Richard Burr (NC) and Tim Scott (SC) put forward a proposal for CCDBG reauthorization. There was some overlap in priorities, including the acknowledgement that affordable child care needs to be accessible to more families, existing child care facilities need to be upgraded, and workforce compensation must be improved. However, that proposal did not come with any funding attached to it, and meaningful change is not going to happen without real dollars.

Child care is an essential industry that is needed to keep the economy functioning. States have been relying on COVID relief dollars to keep the industry afloat, but that funding will soon run out. Recent polling by the First Five Action Fund confirms that voters in battleground states want Congress to take action to make child care more accessible. While this proposal is scaled back from Build Back Better, it is still a historic investment in a field that is in crisis.

The sector will not be able to sustain itself without significant federal investment and that is most likely to happen through reconciliation. This is the clear path forward, but 50 votes are needed to make it a reality. Despite the urgency of this issue and strong public interest, Democratic Senators Joe Machin (WV) and Kyrsten Sinema (AZ) are not definite “Yes” votes. While Manchin has supported early care and education programs in the past, his office has signaled that his current priorities are inflation and the national debt, rather than funding social programs, even those that are necessary to our economy.

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