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Tuesday, July 19, 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. Congress passed eight continuing resolutions (CR) for FY2011. The final (full-year) FY2011 CR, P.L. 112-10, provided $2.223 billion in discretionary CCDBG funding, when taking into account an acrossthe- board rescission of 0.2%. The final FY2011 CR funding level is almost $96 million more than the amount of annual discretionary funding ($2.127 billion) provided to the CCDBG by the FY2010 Consolidated Appropriations Act (P.L. 111-117), but it is roughly $704 million less than the amount requested by the Obama Administration for FY2011 ($2.927 billion). Prior to the enactment of the full-year CR, the House had passed a bill (H.R. 1) on February 19, 2011, that would have provided $2.088 billion in discretionary CCDBG funding for FY2011, representing a decrease of $39 million from the FY2010 funding level and $839 million from the Obama Administration’s FY2011 request level. However, on March 9, 2011, the Senate voted to reject H.R. 1 and S.Amdt. 149 (to H.R. 1), which would have provided $2.437 billion in CCDBG funding for FY2011.

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 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 of $2.917 billion for each of FY2006-FY2010). The Claims Resolution Act of 2010 (P.L. 111-291) provided a one-year extension of mandatory child care funds 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 requested $2.927 billion in discretionary funds (+$704 million from FY2011 enacted) and $3.417 billion in mandatory funds (+$500 million from FY2011 enacted). The Budget also called for both the mandatory and discretionary child care funding streams to be reauthorized in FY2012.

Date of Report: July 14, 2011
Number of Pages: 34
Order Number: RL30785
Price: $29.95

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