A looming childcare cliff could cost families $9 billion in earnings and leave millions of kids without care. Democratic lawmakers want to avoid a crisis.


Federal funding for childcare is set to run out at the end of September.President Joe Biden’s American Rescue Plan injected billions of dollars into stabilizing childcare.Some lawmakers are trying to keep the industry funded and prevent a looming cliff. 

Childcare could become more expensive and even harder to find in a few weeks, but some Democratic lawmakers are trying to avert that looming cliff.

The childcare industry is currently being propped up by a $24 billion investment from President Joe Biden’s 2021 American Rescue Plan. Come September 30, though, that funding will run out — with potentially devastating economic results for children, caretakers, and parents.

“It has been a lifeline for our struggling childcare system and the parents who depend on it,” Sen. Patty Murray of Washington, one of the lawmakers pushing for new legislation aimed at solving the crisis, said in a press conference. “We invest in roads to make sure people can get to work. We have to invest in childcare, too.”

The Child Care Stabilization Act would allocate $16 billion to childcare annually for five years to aid providers.

“The pandemic revealed the fragility of our childcare system, and this country had a national reckoning realizing what moms and dads and grandparents and providers and business owners have long known: Childcare holds our economy together,” House Democratic Whip Katherine Clark said in a press conference.

The Century Foundation, a nonprofit think tank, estimates that the current funding’s end could result in the shuttering of more than 70,000 childcare programs. Those closures could leave about 3.2 million kids without childcare services. What’s more, the closures will leave millions of parents in the lurch: Families will lose out on $9 billion a year in earnings, as some would be forced to cut back their hours or leave their jobs completely, The Century Foundation’s calculations indicated.

Parents are already coming up against unsustainably high costs: The Department of Labor has found that families across the country pay between 8% and 19% of their median family income per child on care. That means childcare is already unaffordable almost everywhere in the country. At the same time, childcare workers are facing low pay and tough conditions; they have previously told Insider that the industry needs even more subsidizing.

Paige Connell, a Massachusetts-based 33-year-old mother of four, pays about $5,000 a month for childcare. That’s more than her mortgage.

“It is the thing that we pay the most money for,” she previously told Insider. She’s not alone: Other parents have told Insider that high costs for scarce childcare have led them to drop out of the workforce completely.

Kaitlin Peterson, a 34-year-old mom in Denver, quit her job to take care of her second child; she paid nearly $22,700 for care for just one child in 2022.

“It was basically like working so that my kids could go to day care and someone else could take care of them, and still not making enough money to actually even pay for the privilege of having them being cared for by someone else,” she previously told Insider.

Now, those costs might balloon, with even fewer spots available for a country already riddled with childcare deserts.

“Right now we have a childcare crisis with ARPA funding,” Rep. Jimmy Gomez of California, a member of the Congressional Dads Caucus, said. “So imagine if you take that funding away.”

Are you a childcare provider, worker, or parent worried about funding drying up? Contact this reporter at [email protected].

Read the original article on Business Insider


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