Federal Funding Cuts to Child Care Programs Lead to Crisis for Families and Providers

Kaitlyn Adkins, a first-generation college graduate and current law student, aims to provide legal assistance to families in her West Virginia community affected by the opioid crisis. Her aspirations, however, depend on reliable child care services for her three young children.

The discontinuation of federal subsidies has now put child care facilities and millions of families like Adkins’ at risk. Over 220,000 child care centers nationwide have lost federal funding as of last Saturday, ending two years of financial support that stabilized the sector during the COVID-19 pandemic. The financial aid ranged from a few hundred dollars to tens of thousands per month.

“Effectively, it feels like setting us all up for failure,” commented Adkins as she left her toddlers at daycare before embarking on a 90-minute drive to her law class.

For an extended period, child care providers have warned about the financial instability of their business models, a situation worsened by inflation and labor shortages. The Century Foundation, a Washington, D.C.-based progressive think tank, analyzed data to conclude that up to half of all providers in six states and Washington, D.C. could face closure without additional funding.

Multiple stakeholders have urged Congress to establish a permanent financial solution to this looming crisis. A Democratic bill aiming to continue the subsidies for five years with an annual allocation of $16 billion failed to pass last month due to lack of bipartisan support.

Rural child care providers serving low-income families are particularly vulnerable. In West Virginia, where one-fourth of children live in poverty, the implications are severe.

Adkins takes her children to a church-affiliated center in Williamson, West Virginia, where nearly 90% of families are eligible for federal assistance for child care costs, making under $45,000 a year for a family of four. The local poverty rate is high, and many children are cared for by grandparents or other relatives.

Adkins, whose father was a coal miner, warns that lack of investment in child care will eventually cost taxpayers more, as they will need to fund welfare programs. She intends to specialize in legal cases related to child abuse and neglect.

The American Rescue Plan Act of 2021 had allocated $24 billion to child care providers, with varying amounts depending on the program size and quality. In West Virginia, centers received between $5,000 to $27,000 a month, and family providers received $750 to $3,200. The act also earmarked $15 billion for a block grant program set to expire in 2024.

At Living Water Child Care Center, where Adkins takes her children, the subsidy was invested in new curriculum, employee certifications, a rubber playground, and computers for the after-school program. With wages for child care workers lagging, the center also provided staff bonuses.

Community members stress the necessity of these centers. Goldie Huff, a local waitress who has fostered over two dozen children, said losing such facilities would be “horrible.” The centers not only provide care but also distribute meals, clothing, and school supplies.

Providers say a long-term funding strategy is essential. Tiffany Gale, who has expanded her West Virginia child care business thanks to federal subsidies, asserts that relying on providers’ dedication is not sustainable.

In summary, stakeholders across the board are calling for a comprehensive, permanent solution to fund child care services, a critical component of the nation’s infrastructure and economic vitality. Without such action, the implications for families, communities, and the nation at large are dire.

Frequently Asked Questions (FAQs) about Federal subsidies for child care programs

More about Federal subsidies for child care programs

• Federal Child Care Subsidies Overview
• The American Rescue Plan Act of 2021
• Child Care in Rural America
• The Century Foundation’s Study on Child Care
• U.S. Bureau of Labor Statistics on Child Care Workers’ Wages
• West Virginia’s Department of Health and Human Resources Child Care Programs
• State-by-State Analysis of Child Care Crisis
• TANF (Temporary Assistance for Needy Families) Funding
• Congressional Proposals for Child Care Funding