Democrats urge action to address imminent funding cliff for child care

In September, the federal subsidies worth billions of dollars for child care providers are set to expire, causing concern among top Democrats and those in the industry who are warning of a looming “child care cliff.”

The $40 billion program, which was included in the American Rescue Plan passed in 2021 to alleviate the economic impact of the COVID-19 pandemic, provided much-needed support to struggling child care facilities. Advocates emphasize that it allowed these facilities to increase wages, reduce tuition fees, and expand services.

With the program coming to an end on September 30, an estimated 3.2 million children could lose access to child care, according to research conducted by The Century Foundation.

The organization’s study also predicts that one-third of the child care facilities that receive funding will be forced to close, resulting in an annual loss of more than $10 billion for the U.S. economy and $9 billion in lost earnings for families. Furthermore, the study estimates that states like Arkansas, Utah, and Virginia will witness the closure of half of their child care facilities and nearly 250,000 individuals will lose their jobs.

In response, Democrats are scrambling to advocate for the extension of these critical programs.

“Failing to invest in child care means failing to invest in our economy—it means exacerbating an already severe workforce shortage,” stated Sen. Patty Murray (D-Wash.) in a recent statement.

“It’s not rocket science—businesses are struggling to hire the workers they need, parents need high-quality child care to be able to work, child care workers need a living wage if we want them to care for our children, and our kids deserve a safe environment to grow and learn,” she added.

However, attempts by the Biden administration to expand the funding were thwarted by Sen. Joe Manchin (D-W.Va.) last year due to concerns over its cost. Moreover, as Republicans take a firm stance on government spending, the chances of any extension occurring are now slim.

The average cost of child care exceeds $10,000 per year, and the study’s authors warn that the loss of federal support will only further drive up this financial burden through increased tuition fees.

“When the federal funds expire in September, the progress made towards a better-resourced child care sector that can provide the necessary quantity and quality of care will be reversed. The long-standing issues of insufficient supply and unaffordable prices will not only resurface, but will worsen exponentially,” they explained.

Unfortunately, the impacts of this cliff will not be evenly distributed. New York is expected to lose over 5,000 child care facilities, which serve around 250,000 children, while Texas may experience the loss of child care for over 300,000 children.

“Today, most parents work and require affordable and high-quality child care and early learning options for their children. They need safe and nurturing care options for their children. As families lose access to child care, many parents will have to leave their jobs or work reduced hours to fill the gap, leading to decreased earnings and job losses,” the research emphasizes.