Child Care Funding Cliff Looms As Government Risks Shutdown


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All the attention in Washington is on the looming government shutdown, and understandably so.

Barring a last-minute spending agreement on Capitol Hill ― which is to say, barring a last-minute outburst of sanity by the extremist House Republicans preventing an agreement ― the federal government will officially run out of spending authority at 11:59 p.m. Saturday night.

Agency workers will be furloughed, except for members of the military, air traffic controllers and other essential employees who will have to work without pay. And while the federal government will keep issuing checks for automatic entitlements like Social Security, within a few days it will have to cut off funds for the Women, Infants and Children system that provides food benefits to 7 million low-income Americans. A prolonged shutdown would affect still more federal services, and likely deal a blow to the economy as well.

But whether or not a shutdown happens, and however long it lasts, a whole other kind of fiscal shock is about to hit the country. And while its effects will materialize more slowly than the shutdown’s, they could be more long-lasting.

I’m talking about the end of billions in emergency funding for child care that the federal government has been providing since 2021, as part of its COVID-19 relief efforts. The money was a lifeline for providers who were getting hammered, first by a decline in customers because of illness and public health closures and since then by the need to pay the higher wages it takes to compete for workers in a tighter labor market.

That money also runs out at midnight Saturday, creating what has come to be known in Washington as the “child care funding cliff.” The term is slightly misleading: Because of the way the disbursements move from the U.S. Treasury to states and then to individual providers, the effect will be gradual. But it will be real and it will likely be significant, because providers still need money.

Sen. Patty Murray (D-Wash.), seen here calling for major child care reform in 2022, has been among the Democrats hoping to an extend a smaller package of emergency funding that runs out at the end of September.
Sen. Patty Murray (D-Wash.), seen here calling for major child care reform in 2022, has been among the Democrats hoping to an extend a smaller package of emergency funding that runs out at the end of September.

Paul Morigi via Getty Images

They and the families that rely on them were struggling even before the pandemic, because of the inescapable, seemingly paradoxical economics of child care: Reliable, quality programs require salaries high enough to attract and keep talented workers, but the tuition and fees to support those salaries are more than many families can afford on their own. And the gap is probably even bigger now than it was a few years ago.

In that sense, the emergency funding was more like a Band-Aid on a wound that had been bleeding for a while and is still bleeding now. With no more Band-Aid — i.e., no more emergency funding — providers will react by reducing hours or staff, or charging more to families that are already struggling to pay, or shutting down altogether.

Predicting the precise impact is difficult, because the child care market is in such flux. A widely cited estimate by The Century Foundation says the end result could be as many as 3.2 million fewer child care slots. Critics say that’s wildly inflated.

But whichever view is closer to reality, it’s hard to imagine so much money coming out of the sector without providers and families feeling it. The economy could take a hit too, if affected parents cut back their own working hours or drop out of the labor force, though it’s likely many would simply return to more stressful double shifts as workers and caregivers — in other words, a replay of what happened to so many at the peak of the pandemic.

Precisely because it will take a while for the federal money to stop working its way through to providers, Congress still has some time to approve new funding, as Democratic leaders and their allies have been proposing with increasing urgency. But they won’t prevail unless even more elected officials — and the public at large — come to see child care as the kind of national priority the U.S. has never made it.

How They Do Child Care Over There — And Over Here

Other economically advanced countries treat early childhood care as a public good that benefits everybody, bolstering today’s workforce while keeping kids (i.e., tomorrow’s workers and adult citizens) in safe, nurturing environments. If you’ve ever spoken to families who live in those countries, you know how much they value and trust those programs — and how much it improves their everyday lives.

It’s a very different story in the U.S. — where, as Claire Cain Miller of The New York Times documented in 2021, government contributions to child care are smaller by a factor of 10. The assumption here has traditionally been that child care is primarily the responsibility of individual families, not society.

The notable exception occurred during World War II, when a federally backed child care program called the Lanham Act allowed women to work in wartime factories, replacing the men fighting overseas. Lawmakers allowed it to lapse after the war, lest too many women keep those jobs that might otherwise go to men. A few decades later, when women finally started breaking into the workplace anyway, Congress passed a bipartisan bill that would have created the nation’s first comprehensive system. Then-President Richard Nixon vetoed it, partly in response to social conservatives who believed it would undermine traditional family life.

If you’re getting the idea that America’s failure to act on child care has a lot to do with gender, you’re right. And it’s why over the last few years the issue has finally started to get serious attention in Washington: There are more women with influence in politics, and in the media too. It also helps that more men are recognizing their parenting responsibilities: Earlier this year, 20 House Democrats started a “Dad’s Caucus.”

That support is one reason Democratic leaders believed they had a shot at creating a bigger, more permanent program to support child care following the 2020 elections, when they had majorities in both chambers and Joe Biden first became president. The emergency funding they included in their pandemic relief legislation was supposed to be a downpayment of sorts on that long-term investment.

But the proposal Democrats had in mind, as part of what they were calling the “Build Back Better” legislation, would have required hundreds of billions of dollars in new expenditures over 10 years ― too much, as it turns out, for more conservative Democrats like West Virginia Sen. Joe Manchin, despite all the benefits it promised for his constituents. He demanded Biden and Democratic leaders dramatically pare back legislation and they complied, because they couldn’t pass a bill without his vote. Child care funding was among the casualties.

Money wasn’t the only reason the child care initiative didn’t become law. There were legitimate questions about how well it would work, especially when it came to its reliance on state officials opting into the new program. And there are still some pretty fundamental disagreements about the tradeoffs in such a program — for example, how much to support child care versus at-home parents, or how much to favor center-based care.

Why There’s Still A Chance To Do Something

None of those questions are going to get settled anytime soon. And, with the House now under the control of Republicans determined to slash rather than increase spending on social services, the prospects of enacting a big new, permanent initiative to create a European-style child care program are pretty much nil.

But the funding cliff is going to affect red states too, and this past week offered one concrete sign that Republicans are paying attention: The subject came up at Wednesday’s GOP primary debate on Fox. And it’s not like Republicans never support funding increases for child care. A big boost to the Child Care Development Block Grant, a targeted federal program that subsidizes care for low-income families, passed with Republican votes in the waning days of the last Congress.

It helps that some states have increased their own investment in child care — and that includes red states like Louisiana and Montana, as Rachel Cohen noted at Vox on Friday. On the other hand, attracting and keeping workers is even harder now that so many retail and fast-food jobs are paying more than they did a few years ago.

Fatigue from the pandemic may be an issue too, with child care workers contemplating job options feeling the same burnout that’s endemic to every other care-oriented sector. Owners of small operations are pretty exhausted too, according to the Century Foundation’s Julie Kashen. “We’re hearing from a lot of folks who, previously, were willing to go into debt — or previously willing to just kind of be unstable on a regular basis — and they’re just not willing to do that anymore,” Kashen told HuffPost.

Eliot Haspel, director of climate and young children at the research organization Capita, summed up the child care economy in a post on X, the site formerly known as Twitter: “It barely functioned pre-pandemic, the economics are hopeless now.”

The Democratic proposal now before Congress would effectively extend the existing emergency child care funding for a few years. It’s not so hard to imagine a version of it becoming part of must-pass, year-end spending legislation, perhaps with the help of the Senate Appropriations Committee Chair (Washington’s Patty Murray) and ranking Democrat on the House Appropriations Committee (Connecticut’s Rosa DeLauro). Both happen to be longtime leaders on child care issues.

More emergency funding wouldn’t solve the long-term crisis, but it could prevent a lot of short-to-medium-term hardship. It would also be a sign that America is starting to recognize the significance of child care, not just to families with young children but to the rest of the country as well.


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