Build Back Better – Child Care and Early Childhood Education
Child care and early childhood education are essential for young working families with kids 0-5; however, they face an array of problems – availability, affordability and quality. They cannot afford it; it is of uneven quality, and there are not enough childcare providers in over half the country (three times as many kids as slots).
Our government ranks near the very bottom of thirty-one advanced nations on childcare spending; we are just above Turkey and Mexico. https://equitablegrowth.org/falling-behind-the-rest-of-the-world-childcare-in-the-united-states/
On top of this we have a lot of children living in poverty; we have poor birth outcomes and high infant mortality, lots of childhood hunger and poorer performance of our kids in schools than other developed nations. https://www.oecd.org/els/family/CWBDP_Factsheet_USA.pdf
We have some building blocks in place: a CDBG block grant for childcare for poor kids (reaches only 1 in 6 eligible kids), the TANF block grant for poor families, and a small childcare tax credit for the middle class. The funding for the Block Grants have not grown to keep up with the need and demand for childcare in an economy with many more two parent working families and many more single parent working families, and where child care is essential to their workforce participation.
There are many different forms of childcare: Childcare centers, family child care, and Head Start plus grandparents or parents staying home to care for the kids and nannies for more affluent parents. Build Back Better uses all of them.
Build Back Better creates an entitlement to child care funding for families (at their option), administered by the states (at their option) and building on and expanding and improving the existing system. Some states may decline to participate in the expansion; they will continue to receive their existing block grant funding. States will have wide flexibility to design their systems to meet the needs of working families in their own communities. Some families will not want their children in early childhood education preferring home schooling or no preschool; this is their option as well.
This is a program for working families (at least one parent working) with a few limited exceptions, such as during job search or when a parent is in the midst of medical treatment for a work-limiting condition. It pays for child care in families with children 0-5. Existing block grants can be used to pay for child care for older children if the state determines that is necessary (e.g. lock-key kids after school).
Eligibility for child care subsidies would be based off a state’s median income – i.e. half above and half below the median income. In year 1, it’s 100% of SMI to determine elgibility, year two 125% of SMI, year 3 150% of SMI, and thereafter 250% of SMI. For example, California’s state median household income is $75,000 in 2021. https://tcf.org/content/commentary/build-back-better-plan-proposes-transformative-child-care-early-learning-policies/?session=1
The federal government pays for 90% of the program’s costs, and states are expected to pay the match for 10% of the costs. Over the first three years, 50% of a state’s allocation must be spent on childcare services for eligible kids, 25% on improving availability and quality of child care and 25% on either or both, at state option. After three years of startup, the federal government pays 90% ,and the states pay 10% of the costs of childcare. The federal government will reimburse the states for improving supply and quality pursuant to the federal Medicaid match (but not more than 5-10% of total spending). Administrative costs of the program are split 50/50 between the states and the feds – the same administrative match model as Medicaid. https://tcf.org/content/commentary/build-back-better-plan-proposes-transformative-child-care-early-learning-policies/?session=1
Childcare providers who participate in the program cannot charge families more than their required copayments. Payment rates will be set to provide a living wage to childcare workers, and it will be tiered based on quality and child outcomes, consistent with the reimbursement models used in the existing, highly regarded Head Start program. https://tcf.org/content/commentary/build-back-better-plan-proposes-transformative-child-care-early-learning-policies/?session=1
The programs are for children 0-5 not yet in kindergarten -- childcare for children 0-3 and early childhood education for children 3-5. They are optional both with families and with states. Families who participate will pay for their childcare on a sliding fee scale based on their incomes. Families would pay $0 for childcare if their incomes are below than 75% of SMI, 0 to 2% of income if their incomes are 75-100% of SMI, 2-4% of income if their incomes are 100-125% of SMI, 4-7% of incomes if their incomes are 125-150% of SMI, and 7% of incomes if their incomes are between 150 and 250% of SMI. Families with incomes above 250% of SMI are eligible for the Child Care Tax Credit of $600 for one child and $1200 for more than one child. https://tcf.org/content/commentary/build-back-better-plan-proposes-transformative-child-care-early-learning-policies/?session=1
For Early Childhood Education, Build Back Better looks to a mixed delivery system that builds on all existing elements. Only 44% of 4 year olds and 17% of three year olds are enrolled in Pre-K; we rank 4th to last among 41 industrialized nations. DC stands out with 80% of all kids enrolled in Pre-K. States would have great flexibility in the program’s design, but must begin with the communities and zip codes with the greatest need — only 18% of low income kids are enrolled in Pre-K. The federal funding would start at 90/10 and decline over time to a 60/40 match. https://www.usnews.com/news/education-news/articles/2021-11-19/build-back-better-act-a-game-changer-for-early-childhood-education Education is typically funded at the state and local levels, and there is wide variability in the extent to which Pre-K programs already exist, but they are the building blocks towards universal Pre-K (at parent option, this is not compulsory). Arkansas is at the top of state rankings on access and quality while Indiana is dead last, number 51; California is mid-range, ranked 29. https://wallethub.com/edu/e/states-with-the-best-and-worst-early-education-systems/62668
This aspect of “Build Back Better” bill is urgently needed to modernize our economic and social and educational system for families with young children. Our existing system was built as a part of the Great Society programs during a time in the aftermath of WW II when two parent families were the norm, and wives stayed home and raised the kids, and the husbands worked and made wages sufficient to support the family. Now both parents work, sometimes at multiple jobs or at different times of the day; wages have stagnated for working families since the late 70’s. A modern childcare and early childhood education program for children 0-5 is absolutely essential to making today’s economy work for all of us – kids, parents, grandparents and employers alike.
Prepared by: Lucien Wulsin
Dated: 11/19/21