UPDATE: On March 11, 2021, President Joe Biden signed the American Rescue Plan into law.

Today, the House voted to pass the American Rescue Plan after it was amended and passed by the Senate over the weekend. The sweeping pandemic relief package includes $39 billion in child care relief funding: $15 billion in emergency funding for the Child Care and Development Block Grant (CCDBG) program and $24 billion for a child care stabilization fund. The bill will now go to President Biden to be signed into law. 

In addition to the $39 billion in dedicated relief for child care, the package includes $1 billion for Head Start programs and other measures directed at families with young children. See an overview of the elements included to support families with young children and the early learning programs they rely on below or online here.

Democrats and Republicans on Capitol Hill have included dedicated relief for child care in every COVID relief proposal since the beginning of the pandemic. Last fall, the House passed a bipartisan relief package with $50 billion for child care, and the Senate Republicans released a number of proposals with $15 billion for child care, leading Congress to ultimately pass legislation with $10 billion in December to keep child care providers afloat for roughly three months. 

Meanwhile, the child care industry has lost approximately 171,000 jobs between February 2020 and December 2020 that have not been recovered, and surveys show that one in four child care centers and one in three family child care homes believe they will have to close permanently if no additional support comes forward. 46% of parents say their current child care situation isn’t sustainable in the long-term. 

Here’s an overview of the provisions of the American Rescue Plan supporting child care providers and the families they serve: 

• Provides $14,990,000,000 in emergency relief to states through the Child Care and Development Block Grant (CCDBG) program.
• Provides $23,975,000,000 in emergency relief to states through child care stabilization grants to be allocated pursuant to the CCDBG Act. 
• Increases annual mandatory funding for the Child Care Entitlement to States (CCES) of $633 million. Additionally, waives the required state match on new funding for FY2021 and 2022.
• For 2021, makes the Child Tax Credit (CTC) fully refundable; increases the amount to $3,000 for children ages 6-17 and to $3,600 for a child under age 6. The credit plateaus at $2,000, and then phases out. Issue monthly advance payments of the CTC that begin July 1, 2021.
• For 2021, makes the Child and Dependent Care Tax Credit (CDCTC) fully refundable; increases the maximum credit rate to 50%; increases the phaseout threshold from $15,000 to $125,000; increases the amount of eligible expenses to $8,000 for one qualifying individual. Adds a phaseout for taxpayers with Adjusted Gross Income in excess of $400,000.
• Provides $250 million for Part C of the Individuals with Disabilities Education Act (IDEA), which authorizes federal funding for early intervention services to infants and toddlers with disabilities ages birth to three years, and $200 million for Part B, Sec. 619, which authorizes supplementary grants to states for preschool programs serving children with disabilities ages three through five.
• Provides $150 million for the Maternal, Infant, and Early Childhood Home Visiting (MIECHV) program to remain available through the end of FY2022.

WASHINGTON—This week, a broad group of organizations led by the Child Care Relief campaign, a coalition of the country’s leading child care, business, and child advocacy organizations, sent a letter to Congress urging lawmakers to continue to focus on child care, both in COVID-19 relief, and as our nation’s economy rebuilds.

The letter highlights how the support delivered by Congress in December provides important assistance for families and child care providers for approximately the next three months, but the pandemic will continue to have a devastating impact on child care for months to come.

“The needs of the child care community are great and have only grown through this pandemic. We must tackle these immediate needs in order to examine and address the broader issues facing the care and education of our children and in order to establish a cohesive system of care to support the working families of this country – a system that can be relied upon when so many other things are uncertain,” the organizations wrote.

The pandemic has shed a light on the critical role child care plays in ensuring the success of our economy. If lawmakers do not invest in child care now, economic recovery will be slowed as parents will be unable to return to work and industries will suffer. Addressing the ongoing challenges facing the child care industry requires ensuring there is ample child care supply and capacity, as well as affordable, high-quality options available for parents when the economy reopens. Priorities outlined in the letter include:

• Building Capacity: During the pandemic, the child care sector has lost one in six workers. Further, the pandemic has shed light on the significant inequities long suffered in the child care industry; virtually all child care workers are women, disproportionately women of color and immigrant women, who do not have adequate wages and benefits. We must focus on equitably building back the child care workforce and ensure sufficient resources are available to support, compensate, and retain these hard-working individuals.
• Building Supply: Licensed child care was in short supply even before the pandemic. In an August survey from the Bipartisan Policy Center, 44% of parents reported that the lack of child care resources was a barrier to their remote or in-person work. In addition to sustaining the child care programs currently struggling to stay open, we must also focus on growing supply and ensuring sufficient quality options are available to parents and communities across all child care settings.
• Direct Support to Families: Even before the pandemic, quality child care was out of reach for many families. Now, the economic toll on families is astounding. More than 800,000 mothers have left the workforce due to child care and school closures, impacting family economic security, lifetime earnings for women, and the economy as a whole. Mothers continue to shoulder the majority of family caregiving responsibilities, and mothers of color are most affected as they disproportionately work in many of the jobs considered “essential,” posing a significant impact on women’s employment and labor force participation. We must provide relief to families now and support the choices they make for their children as the nation recovers.

Since the onset of the pandemic, Child Care Relief has worked to ensure lawmakers provide much-needed relief funding for child care providers to help them remain open, cover operating costs, and provide safe, high-quality early learning and care for the children in their communities. To date, dedicated funding for child care has been included in every federal realief proposal from both Democrats and Republicans, including $10 billion in short-term relief passed by Congress in December. Now, the coalition continues to work toward the common goal of ensuring lawmakers address the immediate needs of the child care industry, as well as the broader challenges facing early learning and care beyond the pandemic.

Read the full letter to congressional leaders, including the list of signers, here. To learn more, please visit childcarerelief.org.

The results of a new bipartisan poll commissioned by the First Five Years Fund (FFYF) and Center for American Progress (CAP) show overwhelming demand among voters across the country for Congress to prioritize emergency relief funding for child care providers in the upcoming COVID-19 recovery package. The new survey data also shows this demand cuts across party lines and among key constituencies, including those who voted for Donald Trump in 2016 (74%), voters 65 and older (83%), suburban women (86%), and Black (97%) and Latinx (93%) voters.

The compelling results of this new poll, conducted by a bipartisan team from Hart Research Associates and New Bridge Strategy, showcase the unmistakable understanding among voters of every political persuasion that child care is central to America’s economic recovery, and that the industry must receive emergency funding in the upcoming Congressional package.

Key findings from the poll include:

• More than 8 in 10 voters favor a federal child care stabilization fund in the upcoming COVID-19 recovery package, with overwhelming support across partisan lines, generations, and genders.
• Even attaching a price tag as high as $50 billion for the child care stabilization fund has virtually no bearing on voter support.
• Nearly 9 in 10 voters want child care providers at the front of the line for Congressional relief, prioritizing the industry above hotels, cruise lines, and real estate developers, and virtually tied with K-12 public schools.
• Roughly 2 out of 3 voters say it is essential or very important for Congress to include support for child care in the next financial relief legislation.

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The results of this survey highlight the broad, bipartisan support among voters for federal relief for child care providers to ensure they can remain open and able to serve their communities so American families can go back to work. As the backbone of our economy, our recovery will be incomplete if we allow this industry to collapse.

Meanwhile, new data from the National Association for the Education of Young Children (NAEYC) indicates that approximately 40% of the nation’s child care providers say they will close permanently without financial assistance. Of those child care facilities that are currently open, 86% are serving fewer children now than they were prior to the pandemic. On average, enrollment is down by a whopping 67%.

Most child care providers typically operate with less than a 1 percent profit margin, and income is predominantly tied directly to the number of children enrolled. In fact, most child care centers only earn a profit if they are operating at close to 90% of enrollment.

At the same time, enrollment is guaranteed to remain low for the foreseeable future, while states’ reopening plans have been stalled or reversed and many parents grapple with the difficult choice between re-enrolling children in care or staying home to eliminate risk of contracting the coronavirus. 

What’s more, in addition to mounting fixed costs like rent and payroll, paired with declining income, providers prioritizing efforts to ensure their staff and the children they support are safe and healthy which results in higher operational expenses due to cleaning and sanitation, personal protective equipment, training or retraining of teachers, recruiting new teachers as many have left the profession as a result of the pandemic, and many other new or increased costs associated with running a business in a post-COVID-19 world. On average, operating expenses are about 30% to 35% higher than they were prior to the COVID-19 pandemic.  Without federal support, those costs will fall on parents who already struggled to afford high-quality care?

Simply put, many child care providers will be operating in the red for months to come. Others won’t be able to afford to remain open and widespread closures will have a disastrous impact on the economy. Congress must include a child care stabilization fund in this recovery package to keep the industry afloat. Without it, 4.5 million child care slots – half of the nation’s child care supply – will vanish.

Click here to see the full results of the poll and here for an analysis memo.