The COVID-19 pandemic has pushed the U.S. child care system to the brink of collapse, as child care programs endured temporary closures, significant enrollment declines, and new costs related to keeping children and educators safe during a public health crisis. While the relief funds included in the American Rescue Plan Act have limited the fallout from these unprecedented challenges, the fact remains that a market-based child care system cannot adequately serve American families.
1 in 9
Share of eligible children under 6 who received child care subsidies in 2019
Share of U.S. GDP spent on early care and education
For more than three decades, the Child Care and Development Block Grant (CCDBG) has been the primary policy response to this problem—a tacit recognition of market failures in a sector that has proved to benefit children, their families, and the public at large. But decades of underfunding of this program have forced states to restrict eligibility for child care assistance. The United States currently spends less than 0.5 percent of its gross domestic product (GDP) on early care and education, ranking near the bottom of Organization for Economic Cooperation and Development countries.
The effect of this chronic underinvestment is that under current law, very few children access subsidized care—even among those who are eligible. The Administration for Children and Families estimates that in 2017, of the 13.5 million children who were eligible for child care subsidies, only 1 in 7 received them. But this estimate includes elementary school-age children, since the CCDBG is also used to help fund before- and after-school programs. Table 1 shows a new CAP state-by-state analysis of subsidy receipt among children who have not yet reached kindergarten, finding that among federally eligible children younger than age 6, only 1 in 9 received a child care subsidy in 2019.
The Build Back Better Act would dramatically expand the universe of families receiving child care assistance. It does not simply increase eligibility but offers a guarantee of child care assistance to 93 percent of working families. Table 2 presents a new CAP analysis showing the number and share of young children from working-parent households receiving child care subsidies under current law (the CCDBG), compared with the number and share of these young children who would receive subsidies under the fully implemented Build Back Better Act. Across all states, the law would subsidize child care for more than 13 million children younger than age 6. This is equivalent to a sixteenfold increase in child care assistance, with some states reaching more than 25 times as many young children as under the CCDBG.
Since this would be an expansion of child care assistance on an unprecedented scale, the bill phases in eligibility over the first four years of the legislation. The U.S. child care system, still suffering from the effects of the coronavirus pandemic, would not be able to meet demand in its current form. The legislation addresses this urgent issue by investing in supply-building over the first three years in order to offer adequate options for the millions of families newly eligible for child care subsidies. Building supply will involve recruiting new early educators, opening additional classrooms, and supporting the development of many new child care businesses over the next few years.
By intentionally scaling up supply, increasing wages for teachers, and attracting thousands of new early educators, this plan will truly build back a better child care system for the millions of families who need affordable, quality child care.