In 2021, the United States Congress passed the American Rescue Plan Act that provided $24 Billion to stabilize the child care industry with most of those funds specifically dedicated to stabilization payments going directly to child care programs. This supplemental funding stream was dedicated to staff wages, facility expenses, utilities, and health measures utilized by the child care programs.  

On September 30th, those funds will have officially expired, and child care programs all over the country and the Commonwealth will experience a significant financial shock.

Researchers have estimated that as many as 70,000 child care programs across the country could close once the stabilization payments are gone. Programs that attempt to stay open will have to increase their rates, lower staff wages, or both. Prior to the end of the stabilization payments, data was showing that up to $122 Billion a year was being lost due to a lack of child care. The federal government is being called upon advocates across the country to address the child care crisis and provide needed funding to keep child care programs open.

Although child care has become a bipartisan concern throughout the nation, federal lawmakers are still struggling to find a resolution to support the industry. A group of Democrats led by Senator Patti Murray from Washington is proposing legislation for another one-time investment into child care over the next five years. The House of Representatives recently created the Congressional Bipartisan Affordable Childcare Caucus to develop new ideas on how to solve the crisis. Some congressmen are open to increasing child care funding if other family safety net programs are trimmed, but the overall benefit to families could be significantly diminished if stable nutrition and accessible health care is reduced during this process. 

While the legislative branch is attempting to find one path to solve this problem, the federal Office of Child Care has proposed new child care regulations that would make policy changes to help support child care programs. These changes include: 

  • Paying child care programs based on their enrollment instead of attendance
  • Capping the maximum co-pay that families on child care subsidy would have to pay
  • Ensuring that child care programs receive their federal funding in a more timely manner 

As states wait to see what kind of support Congress is going to offer to further subsidize child care, many states are looking at their own budgets to see where they can also support child care programs. Kentucky is approaching a legislative budget session that will begin in January 2024, and it is important for our state lawmakers to understand that both state and federal government assistance is going to be necessary to continue to support the child care industry and keep working parents in the workforce. 

CALL TO ACTION: Contact your state legislators and Congressman to share about the importance of child care and urge them to support investments to strengthen the child care infrastructure to support children, families, the workforce, and the overall economy. 

Photo by Yan Krukau via Pexels