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Friday, January 28, 2011

The Child Care and Development Block Grant: Background and Funding

Karen E. Lynch
Analyst in Social Policy

The Child Care and Development Block Grant (CCDBG) provides subsidies to assist low-income families in obtaining child care so that parents can work or participate in education or training activities. Discretionary funding for this program is authorized by the Child Care and Development Block Grant Act of 1990 (as amended), which is currently due for reauthorization. Mandatory funding for child care subsidies authorized in Section 418 of the Social Security Act (sometimes referred to as the “Child Care Entitlement to States”) is also due for reauthorization. In combination, these two funding streams are commonly referred to as the Child Care and Development Fund (CCDF). The CCDF is the primary source of federal funding dedicated solely to child care subsidies for low-income working and welfare families.

The CCDF is administered by the Office of Child Care at the U.S. Department of Health and Human Services (HHS), and provides block grants to states, according to a formula, which are used to subsidize the child care expenses of working families with children under age 13. In addition to providing funding for child care services, funds are also used for activities intended to improve the overall quality and supply of child care for families in general.

Discretionary child care funds are subject to the annual appropriations process. Congress has passed a series of continuing resolutions to provide funding for FY2011, the most recent of which, P.L. 111-322, is scheduled to expire on March 4, 2011. Each of the continuing resolutions for FY2011 has maintained discretionary CCDBG funding at the FY2010 rate of $2.127 billion. This is $800 million below the Obama Administration’s FY2011 Budget request of $2.927 billion. However, it is the same level of annual discretionary funding the CCDBG received in both the FY2010 Consolidated Appropriations Act (P.L. 111-117) and the FY2009 Omnibus Appropriations Act (P.L. 111-8). The American Recovery and Reinvestment Act (P.L. 111-5) appropriated an additional $2.000 billion in one-time discretionary CCDF funding in FY2009.

The mandatory child care funding was directly appropriated (or pre-appropriated) for fiscal years 1997 through 2002 by the 1996 welfare reform law (P.L. 104-193), which enacted the mandatory component of the CCDF. Temporary extensions provided mandatory CCDF funding into FY2006. On February 8, 2006, a spending budget reconciliation bill was enacted into law (P.L. 109-171), increasing mandatory child care funding by $1 billion over five years (for a total amount of $2.917 billion for each of fiscal years 2006 to 2010). The Claims Resolution Act of 2010 (P.L. 111-291) provided a one-year extension of mandatory child care funding at the FY2010 level of $2.917 billion. Without legislative action, the authorization and funding for mandatory child care will expire at the end of FY2011. The Obama Administration’s FY2011 Budget called for mandatory child care to be reauthorized and funded at $3.717 billion in FY2011, an increase of $800 million over the level provided in the Claims Resolution Act of 2010. The FY2011 President’s Budget also called for all mandatory child care funding to be annually indexed for inflation beginning in FY2012.

Date of Report: January 10, 2011
Number of Pages: 32
Order Number: RL30785
Price: $29.95

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