Responding to the National Call for Tax Reforms that Support Children and Families
Child Care Advocates across the nation are urging members of Congress to adopt tax solutions and expand the Child Tax Credit (CTC) to help more children and families access high-quality, affordable child care.
In response to a recent Request for Information (RFI), the Care Can’t Wait Coalition prepared a letter, emphasizing that families across the country need the wealthiest and big corporations to pay their fair share in taxes so we have more revenues to make robust public investments in critical areas like child care.
The Network signed onto the coalition's letter, supporting the expiration of the Tax Cuts and Jobs Act of 2017 (TCJA) and the use of additional tax revenue for deeper investments in the care economy. Read the full letter here.
Additional resources:
- The 2025 Tax Fight: Changing Course on Tax Cuts for the Wealthiest to Advance Gender and Racial Equity
- What Child Care Advocates Need to Know about the Upcoming Tax Debate
August 2024 Federal Budget Update
On July 10, the House Appropriations Committee approved the FY25 Labor, Health and Human Services, Education, and Related Agencies Appropriations Act.
What did it include?
- Total Funding: $185.8 billion in total discretionary funding, a cut of $24.6 billion or 11% from FY2024.
- Health and Human Services: $107 in total discretionary funding, a cut of $8.5 billion or 7% from FY2024.
- Child Care and Development Block Grant: $8.7 billion, a $25 million increase from FY2024.
- Head Start: $12.3 billion, a $25M increase from FY2024.
- Preschool Development Grant: $65 million or 20% decrease from FY2024, but maintained from the President’s budget request.
- Adopted Amendments: Prohibits the implementation of Child Care and Development Fund Final Rule provisions, which would reduce access to funding for faith-based organizations.
On July 25, the Senate Committee on Appropriations passed a tentative agreement to raise spending above the mandatory FRA caps, increasing nondefense spending by $13.5 billion in emergency funding.
On August 1, the Senate Appropriations Committee approved the FY25 Labor, Health and Human Services, Education, and Related Agencies appropriations bills.
What did it include?
- Total Funding: $231.14 billion in base discretionary funding.
- Health and Human Services: $122.8 billion, a $2.3 billion increase from FY2024.
- Child Care and Development Block Grant: $10.35 billion, an 18% increase from FY2024.
- Head Start: $12.97 billion, a $700 million increase from FY2024.
- Preschool Development Grant: $315 million, maintained from FY2024.
Click here for the federal Appropriations Status Table.
What’s Next?
Congress reconvenes in September and will work on passing short-term continuing resolutions ahead of the September 30 budget deadline. A final appropriations package is not likely until after the November 5 election.
April 2024 Federal Budget Update
Click Here to Listen to Our Federal Budget Update
Fiscal Year 2025 Budget Overview
The President’s Budget Request was released on March 11 of this year, almost a month after the Budget Act deadline of February 1st.
Budget Highlights:
- Total spending: $ 7.3 trillion
- Total revenues: $5.5 trillion
- Deficit: $1.8 trillion
Federal Budget Child Care Measures
- New program working families with income up to $200k per year for guaranteed affordable, high-quality child care from birth until kindergarten.
- Goal: most families pay no more than $10 a day and lowest income families pay $0, this would affect over 16 million children.
- $8.5 billion for the Child Care Development Block Grant, increasing subsidized child care and related services for over 2 million low-income children.
- The budget includes funding for universal free preschool for all 4 year olds and aims to create a path to extend preschool to 3 year olds, choosing from public schools, child care providers, or Head Start.
FY25 Budget Next Steps
- Now: the Senate/House will continue to go through their normal processes of congressional hearings.
- June/July: House bills will go through the floor.
- After the November 5 election: final appropriations.
Expiring FY 24 Emergency Child Care Funding
In February, a Nonpartisan group of Senators requested that Congress renew expired emergency funding for child care, which may be reflected in the FY25 Budget. Expiring funds include:
- Covid Aid, Relief, and Economic Security (CARES): Provided $3.5 billion in emergency funding for CCDBG to support child care assistance for frontline workers and stabilize the child care system.
- Coronavirus Response and Relief Supplemental Appropriations Act (CRRSA): Provided an additional $10 billion to provide relief and stabilization to working families and the child care sector.
- American Rescue Plan Act (ARPA): Provides $14.99 billion through CCDBG and $23.975 for a new child care stabilization grant program. ARPA also included an annual increase of $633 million to CCES for a total allocation of $3.55 billion.
Side Notes:
- The Child Care Development Block Grant or CCDBG authorizes Child Care Development Funds or CCDF for states and territories to disperse subsidized child care.
- A portion is set aside for Quality Improvement activities (or QI). Resource and Referral programs are funded under the QI allocation.
- The Child Care Initiative Project (CCIP) is funded through a combination of both QI funding and state match funding.
- The Consolidated Appropriations Act of 2024 included an increase of $725 million in discretionary funds for the CCDBG. California alone will see an increase of almost $77 million.
- While these funds are significant, more is needed in order to deliver on the new requirements set by the 2024 Final Rule which caps co-payments at 7% of family income for families. In California AB 116 (effective October 2023) already caps family co-payments at 1% of their monthly income and families below 75% of the state median income (SMI) no longer pay any subsidized child care fees.
Resources: