Why the Impending Conclusion of Federal Child Care Funding Is Significant—Regardless of Having Young Children

While government subsidies allowed Jordyn Rossignol to keep her child care center afloat in northern Maine during the pandemic, she made the difficult decision in August to close it down due to increasing operational expenses.

This federal aid, which, although not a complete solution, served as a crucial lifeline, is set to expire at the end of this month, placing many day care providers across the United States in a precarious situation, an event referred to by industry advocates as a "child care cliff."

Rossignol, 35, envisions an even grimmer scenario.

"It's going to be a child care apocalypse," she said. "If someone came to me today and expressed interest in opening a child care center, I'd advise against it. I was in debt, and my health was deteriorating."

"I couldn't retain staff due to inadequate pay," she added, referring to the federal funds, amounting to approximately $12,000 per month, which still left her struggling as she grappled with payroll, food, and training compliance costs. "I lost my best teacher to work across the street at a hardware store."

According to a report from The Century Foundation in June, over 70,000 child care programs, roughly one-third of those relying on funding from the $1.9 trillion American Rescue Plan Act passed in March 2021, could close. This translates to around 3.2 million children losing access to child care.

The potential loss of child care providers would have a profound impact on working parents, particularly affecting women. However, labor and economic experts caution that the ripple effect will extend far beyond, with implications for those without young children.

"Our economy is robust. We have a strong labor market, and there has been significant job growth," said Julie Kashen, the director of women's economic justice and a senior fellow at The Century Foundation, a nonpartisan progressive think tank.

"But if parents lose their access to child care, they will have to reduce their work hours or exit the workforce altogether," Kashen stated. "Fewer individuals in the workforce mean reduced spending, and the economy will feel the consequences."

To mitigate these losses, Kashen noted that several states, including Alaska, California, Minnesota, and New York, have attempted to allocate millions of dollars to support child care providers who depended on federal funding for staff salaries, supplies, and reduced tuition fees for families.

In some states, the crisis is deepening. In June, the GOP-controlled Legislature in Wisconsin voted to discontinue its Child Care Counts subsidy program, with funds for assisting child care providers expected to be depleted by February. Nonetheless, some Republican and Democratic lawmakers are proposing alternative solutions.

At the federal level, Democratic members of Congress have introduced bills this year to expand federal subsidies for child care providers and establish federally funded, locally operated child care centers. Republicans have resisted extending pandemic-era funding, initially intended as temporary relief.

"At this point, everything is tied to the government shutdown issue," Kashen noted. "If Congress can take action on this before the year's end, it will make a substantial difference."

The repercussions of funding loss may not become immediately apparent but will manifest in waves over the coming year as child care centers grapple with their ability to continue operations.

As more centers close and those remaining open extend already lengthy waitlists for limited spots, some families will be forced to decide whether one parent must stay at home to care for their children, according to Cathy Creighton, the director of Cornell University's School of Industrial and Labor Relations Buffalo Co-Lab, who has researched child care costs.

Often, this responsibility falls on mothers, putting them at a disadvantage in terms of career advancement, widening gender pay disparities, and affecting their personal income and future benefits.

"This situation only exacerbates preexisting inequalities," she added.

Jade Lebel, a mother in Maine with a 2 ½-year-old and a 6-month-old, decided not to return to her teaching job after realizing that day care costs would amount to a staggering $29,000 per year for her two children.

She believes continued government funding for child care providers is imperative but hopes that companies and employers can contribute with their innovative solutions to assist parents, whether through on-site child care facilities, subsidizing child care expenses, or offering work-from-home flexibility.

"The longer we delay finding a sustainable solution, the more we harm our country in the long run," Rawasia said."