Spending on childcare assistance last year fell to the lowest level since 2002, according to a report from the policy organization CLASP.
The primary source of funding for subsidies that help low-income parents afford childcare is the Child Care and Development Block Grant (CCDBG), and spending on that grant was at a decade low. States can also contribute to subsidies with matching funds as well as by using federal funds from the Temporary Assistance for Needy Families (TANF) block grant. Federal TANF funds were at the lowest level since 1998. In total, $11.4 billion was spent on childcare subsidies, down from $12.9 billion the year before.
One factor that the CLASP report points to is the lapse of extra childcare funding that was included in the 2009 stimulus bill. Another is that the federal block grant to TANF — a fixed amount of money given to states each year — hasn’t been adjusted for inflation since it was created in 1996. It “thus has lost about one-third of its value,” the report notes. In the first few years after that change, the amount of funding directed to childcare grew from less than $300 million to a high of $4 billion in 2000, but it has declined since and was just $2.6 billion last year.
Alongside the lower spending, fewer children are getting childcare thanks to subsidies. Last year, 1.5 million children a month were given childcare thanks to CCDBG aid, the lowest number since 1998, and the number of children has fallen by about 263,000 since 2006. Meanwhile, just 40 percent of children ages three to five are enrolled in preschool, with less than a third of four-year-olds in state-funded Pre-K programs.
Beyond these raw numbers, there is also evidence that parents face more and more barriers to getting subsidies to help them pay for care. Access for families in 24 states was more limited last year thanks to income eligibility limits, long waiting lists, increased copayments, lower reimbursement rates for providers, and eligibility for parents on the job hunt as compared to the year before.
At the same time, childcare costs have been soaring. They rose once again in 2012 and represent the single biggest expense for a household in the Northeast, Midwest, and South. Childcare costs more than annual median rent in every state, more than what the typical family spends on food in every region of the country, more than mortgage payments in 19 states and DC, and more than even tuition at a four-year public college in 31 states and DC.
That presents a problem for working parents who need somewhere for their children to be when they go to their jobs. The loss of a Head Start slot, for example, has caused some parents to quit their jobs. Many families struggle with this conundrum, since about three-quarters of all families are headed by one or two working parents. Consequently, almost 11 million children under the age of five spend time in child care each week.
The good news for working parents is that even if Congress hasn’t increased spending on childcare subsidies, the Department of Health and Human Services has issued new requirements for centers that receive federal subsidies to improve health, safety, and quality.
And the burdensome cost of care hasn’t gone without notice on Capitol Hill. A bipartisan group of Congressmen introduced a bill in November to expand access to high-quality childcare and preschool for all children across the country. It came in the wake of President Obama’s proposal for universal preschool announced in his 2012 State of the Union address and included in his 2013 budget. Those plans would come as a huge benefit for today’s working parents.