Congress is increasing childcare funding by nearly $585 million—but it won’t fix the ‘sweeping, systemic problems’

The proposed package—which is expected to pass the Senate this week—includes increases across the board for a number of federal childcare and early education programs, including roughly $11 billion for Head Start and Early Head Start and $6.2 billion for the Child Care and Development Block Grant (CCDBG). The CCDBG provides federal funding to states for childcare subsidies for low-income families, as well as funding for childcare providers. 

Early childhood education advocacy organization the First Five Years Fund (FFYF) calculates the annual fiscal increases to major childcare and early learning programs—Head Start, CCDBG, the Preschool Development Grant Birth Through Five (PDG B-5) program, as well as preschool, infant, and toddler care grants—will add up to about $584.4 million in additional funding.

But while the spending package provides critical funding for important federal programs that help millions of American children and families, it doesn’t address some of President Joe Biden’s previous proposals for universal prekindergarten, subsidized childcare, or training and support for early childhood educators. And the funding doesn’t address the “sweeping, systemic problems” that plague the childcare industry, says FFYF spokesman Charlie Joughin.

Throughout the past two years, childcare providers have faced increased operating costs, razor-thin profit margins, unpredictable attendance, and staff hiring challenges—and that’s taken a toll. 

A recent Child Care Aware of America report found that nearly 16,000 providers across the U.S. permanently closed between December 2019 and March 2021 in 37 states with data. ​​But when looking at all 50 states, it’s estimated that 20,000 childcare programs have ceased operations, or up to 10% of the pre-pandemic industry, according to a new report from the Century Foundation released Thursday. 

“The omnibus spending package includes modest, needed increases in funding to narrow and existing programs, ones that serve only a portion of eligible low-income children,” says Julie Kashen, a senior fellow and director for women’s economic justice at the Century Foundation. “In other words, it provides a little extra support to a sector that has teetered on the brink during COVID.”

The funding increases allocated in the latest funding bill are also a lot lower than previous emergency funding that Congress provided during the pandemic. The American Rescue Act passed in 2021 provided $40 billion for the childcare industry—providing stabilization grants to childcare providers across the country. 

That funding saved 3.2 million childcare spots and prevented 75,000 permanent childcare center closures, according to the Century Foundation’s latest report. 

Similarly, a recent survey from the National Association for the Education of Young Children found 92% of childcare providers who received stabilization grants reported that funding helped them stay open. 

But it’s not just the childcare industry that’s hurting—a lack of care for children means that many parents are still unemployed or underemployed and companies lack needed workers. 

Nearly half of workers who quit last year say childcare was a factor in leaving their job, according to a recent report from Pew Research Center. Women have been hit particularly hard. Indeed found about 43% of unemployed men were actively looking for a new job in February compared with 38% of women. Among those not urgently searching for a new job, unemployed women cited childcare responsibilities as a key reason nearly twice as often as men.

“Ultimately, what we really need is to finally create a comprehensive childcare and universal pre-K system,” says Kashen. “This is how we serve the vast majority of families, build the supply of childcare to meet demand, lower costs for parents, and make early care and education a sustainable profession.”