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Wednesday, March 9, 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 the 112th Congress. 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. A Full-Year Continuing Appropriations Act for FY2011, H.R. 1, passed the House on February 19, 2011. If enacted, this bill would provide $2.088 billion in discretionary CCDBG funding for FY2011, a decrease of $39 million from the level funded by the FY2010 Consolidated Appropriations Act (P.L. 111-117) and $839 million below the Obama Administration’s FY2011 request of $2.927 billion. In the absence of enacted full-year appropriations legislation, Congress has passed a series of continuing resolutions (CR) to provide funding for FY2011, the most recent of which, P.L. 112-4, is scheduled to expire on March 18, 2011. This fifth CR for FY2011 funds the CCDBG at the rate of $2.126 billion, which is $1 million less than each of the four previous FY2011 CRs and $801 million below the Obama Administration’s FY2011 Budget request. This is $1 million below the 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 FY2012 Budget was released on February 14, 2011. The Budget calls for a $1.3 billion increase in child care subsidy funding in FY2012 (of which $800 million would be discretionary and $500 million would be mandatory). The Budget also calls for both the mandatory and discretionary child care funding streams to be fully reauthorized in FY2012.

Date of Report: March 4, 2011
Number of Pages: 34
Order Number: RL30785
Price: $29.95

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