We are heading towards what experts call a “child care cliff”. It could wreak havoc on families, on the economy, not to mention President Joe Biden’s approval ratings.
A $24 billion federal emergency relief fund for child care, passed under the American Rescue Plan Act in 2021, is set to expire at the end of September. It means that in a matter of weeks, child care centers and preschools across the country will lose a vital source of funding that has helped them stay afloat as the economy recovers from the pandemic. Without continued federal assistance, much of the child care sector risks collapsing — and sending shockwaves through the economy as families struggle to adjust to fewer options. of child care.
Part of the problem is that the U.S. child care industry was already in deep trouble before the pandemic.
The numbers are grim. According to a report by the Century Foundation, a progressive think tank, more than 70,000 child care programs “will likely be closed” and “3.2 million children could lose their child care spaces.” As childcare providers are forced to raise tuition fees to compensate for the lack of support or total closure, parents will be forced to find alternative childcare arrangements. For many, this will mean reducing working hours or quitting their jobs altogether. The cascading effect will be a severe blow to the economy. The Century Foundation estimates that states will lose $10.6 billion a year in economic revenue and families will lose $9 billion in income a year.
It’s too bad, because the emergency funding for child care was working well. In some cases, this has allowed child care centers not only to stay afloat, but also to reduce tuition fees, increase staff salaries, invest in professional development and improve the quality of their services with better equipment. According to the Department of Health and Human Services, funding has helped more than 80% of child care centers in the United States cover overhead costs and retain employees.
Part of the problem is that the U.S. child care industry was already in deep trouble Before the pandemic. The United States is an extreme exception among wealthy countries when it comes to how little funding the government provides to help families keep their children. In the United States, child care centers have long struggled to establish sustainable businesses between the high cost of ownership and the labor-intensive nature of child care work. And the high cost of childcare tuition was already out of reach for many households before the pandemic. Although emergency funding has been a great stabilizing force, the industry is now once again on the brink of a period of major instability.
Democrats have sought to remedy the planned end of emergency funds by including a huge child care subsidy in the Build Back Better Act. This plan was intended to ensure that every family in the United States had a range of child care options to meet their needs. The bill passed the House, but not the Senate, and because the bill was narrowed down significantly during negotiations with conservative Democrats, funding for child care was not included. in the Inflation Reduction Act passed in August 2022.
Unfortunately, despite the cliff, it appears Biden isn’t making child care a top priority in the upcoming government funding battles on Capitol Hill. According to Politico, the White House has indicated that “it will not prioritize the child care program.” And Democrats are unlikely to pass child care legislation while Republicans control the House.
This is a mistake: dropping funding for child care policies is not only bad policy, it is also bad policy. Even though inflation has eased, families will feel the impact of fewer and more childcare options in very real ways. This is a particularly unwanted vulnerability for Biden as he enters an election year and continues to struggle to sell the economic achievements of his first term.
The Biden administration made the right decision to invest a lot of money to help keep the child care industry alive in times of crisis. But Democrats need to see child care as a social right rather than an option.