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How Does Lack of Child Care Impact Escaping Poverty

Linda Chandler 2013/02/07

By any account, the current state of subsidized child care funding is in crisis. Too many people need services, too few dollars are allocated to these programs to cover the influx of new potential recipients, or even to maintain those already on the roster. Historically, providing funding at the federal level for child care subsidy programs was a challenge. This was due to cultural beliefs that to a certain extent, this program should not be needed; a parent should be in the home to provide care for preschool aged children. It took the cultural shift of seeing women in the role of wage-earning individuals, as well as a financial shift where her work outside the home was becoming increasingly important to the financial viability of the family.

images 43 300x241 How Does Lack of Child Care Impact Escaping PovertyIn 1996, the Personal Responsibility and Work Opportunity Reconciliation Act (AKA, 1996 Welfare Reform Act) restructured the support system for poor families and individuals in the United States. The main objective of this reform legislation was to encourage people away from government support (welfare) toward gainful employment. There is a large focus on time limits to receive benefits, participation in work related activities and some allowance for education to provide better chance of gaining full time employment. The federal Act set a base level of standards but allowed the states leeway to reduce the time constraints further. Prior to this legislation, federal support of child care was an entitlement for poor families, and any family participating in Aid to Families with Dependent Children (AFDC) qualified for this assistance.

The block grant reduced the budget for such assistance, even when combined with the Child Care and Development Block Grant (CCDBG). It also tightened the requirements for obtaining such assistance, though more people were expected to need help, due to the increased work/work activity requirement The Congressional Budget Office (CBO) estimated a funding shortfall of $1.8 billion. This legislation did allow states flexibility to reassign some funds from one program to another to better fit the needs of their citizens. It also allowed participants to select their own care provider. The challenge in this is the legislation did little to support quality improvements for out-of -home child care facilities. A small percentage  “up to 4″ of a states’ child care funding can be used for this cause.

As a result of the recession in the late 2000’s, a new wave of challenges to the federal government’s ability to provide financial assistance for child care was experienced. A portion of the American Recovery and Reinvestment Act of 2009 provided additional funds for Temporary Assistance to Needy Families) TANF, to support the increase participation in that program. In 2010, the CCDBG provided child care payment assistance to approximately 1.7 million children. This covered only one of every six children that were eligible for the program during the time period studied.

According to a recent report by the National Women’s Law Center, in 27 states, less funding was provided to child care subsidies in 2012 than in 2011. The situation improved for families in 17 states. This is only the second year in a row that conditions improved in fewer states than they deteriorated.The continued economic struggles of this country will make federal and state funding of these programs an ongoing challenge. It can be argued, that making funding of child care a priority will help to stabilize the economy. This ideology will be discussed further in the next post.

By any account, the current state of subsidized child care funding is in crisis. Too many people need services, too few dollars are allocated to these programs to cover the influx of new potential recipients, or even to maintain those already on the roster. Historically, providing funding at the federal level for child care subsidy programs was a challenge. This was due to cultural beliefs that to a certain extent, this program should not be needed; a parent should be in the home to provide care for preschool aged children. It took the cultural shift of seeing women in the role of wage-earning individual, as well as a financial shift where her work outside the home was becoming increasingly important to the financial viability of the family, for funding to become supportable in the long term.

In 1996, the Personal Responsibility and Work Opportunity Reconciliation Act (AKA, 1996 Welfare Reform Act) restructured the support system for poor families and individuals in the United States. The main objective of this reform legislation was to encourage people away from government support (welfare) toward gainful employment. There is a large focus on time limits to receive benefits, participation in work related activities and some allowance for education to provide better chance of gaining full time employment. The federal Act set a base level of standards but allowed the states leeway to reduce the time constraints further.

Prior to this legislation, federal support of child care were available for poor families. Any family participating in Aid to Families with Dependent Children (AFDC) qualified for this assistance. The block grant reduced the budget for such assistance, even when combined with the Child Care and Development Block Grant (CCDBG). It also tightened the requirements for obtaining such assistance, though more people were expected to need help, due to the increased work/work activity requirement The Congressional Budget Office (CBO) estimated a funding shortfall of $1.8 billion.This legislation did allow states flexibility to reassign some funds from one program to another to better fit the needs of their citizens. It also allowed participants to select their own care provider.

The challenge in this is the legislation did little to support quality improvements in outside the home care. A small “up to” 4 percent of a states’ child care funding can be used for this cause. This legislation did allow states flexibility to reassign some funds from one program to another to better fit the needs of their citizens. It also allowed participants to select their own care provider. The challenge in this is the legislation did little to support quality improvements in outside the home care. A small “up to” 4 percent of a states’ child care funding can be used for this cause.

As a result of the recession in the late 2000’s, a new wave of challenges to the federal government’s ability to provide financial assistance for child care was experienced. A portion of the American Recovery and Reinvestment Act of 2009 provided additional funds for Temporary Assistance to Needy Families) TANF, to support the increase participation in that program. In 2010, the CCDBG provided child care payment assistance to approximately 1.7 million children. This covered only one of every six children that were eligible for the program during the time period studied. According to a recent report by the National Women’s Law Center, in 27 states, less funding was provided to child care subsidies in 2012 than in 2011. The situation improved for families in 17 states, but this is only the second year in a row that conditions improved in fewer states than they deteriorated. The continued economic struggles of this country will make federal and state funding of these programs an ongoing challenge.

For Further Reading

NASW Legislation Summary
Sourcewatch – 1996 Welfare Reform
DHHS Fact Sheet – TANF
Policy Almanac – Child Care
Parents and the High Cost of Child Care

Photo credit: Newsday / Thomas A. Ferrara | Child care providers, parents, children and others gather for a rally at the H. Lee Dennison building in Hauppauge, to protest Suffolk County’s cuts to child care subsidies. (Aug. 30, 2012)

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