On Saturday, September 30, the Child Care Stabilization program (which provided critical funding to childcare providers to assist with operational costs like wages and benefits, rent and utilities, and program materials and supplies) ended. While the U.S. government avoided a shutdown over the weekend, congress failed to extend the federal child care funding which could have serious consequences for families, employees and the economy. Experts are warning that this termination of federal funding could translate to the closure of 70,000 childcare programs across the country, amounting to a staggering 3.2 million children losing childcare. Here’s what you need to know—and why you should care (whether you have young kids or not).
Why Everyone—Parents Or Not—Should Care That We Are Hurtling Towards a 'Childcare Cliff'
What Is the Childcare Cliff?
The expired funding came from the American Rescue Plan Act signed into law by President Biden in 2021. Thanks to this stimulus plan, almost $40 billion was directed toward the childcare industry, helping thousands of centers stay open, pay their staff and keep costs down for parents. With the program terminated, experts are warning that the U.S. is heading towards a “childcare cliff.”
What Does It Mean for Childcare Centers and Parents?
For childcare centers, the end of funding could mean closing entirely, cutting staff wages or increasing the costs of care for existing families. For parents, it could mean even higher childcare costs and longer daycare waitlists.
The cutoff won’t necessarily mean a sudden shutdown of child care facilities. Instead, experts are predicting that it will contribute to the continuing shortage of affordable services (in 41 states plus the District of Columbia, the average annual price of child care for two children in a center exceeds average annual mortgage payments by anywhere from 1 to 53 percent). “I think that the child care cliff is probably the wrong way to think about it,” said Chris Herbst, a professor at Arizona State University who studies the economics of child care in the New York Times. “I think it’s a slow roll downhill.”
The end of funding will have a particularly profound impact on working mothers, as rising costs and longer waitlists will mean many families will have to decide whether one parent will need to stay home to care for their children (research shows that women are more likely to leave their careers and become unpaid caregivers for their kids). But this is nothing new, argued Reshma Saujani, founder of Girls Who Code and Moms First, in an op-ed for MSNBC that published before the program’s ending. “In America, this so-called ‘childcare cliff’ isn’t a new frontier—moms have been teetering on its edge for decades. And if this relief cuts off, it will confirm what many of us already know: Working moms are both the first ones pushed off the ledge, and the social safety net expected to catch everyone else, often at our own peril.”
What About the Economy?
And here’s the part that should make everyone nervous, whether you’re a parent or not. “Our economy writ large will lose out on critical revenue, costing states an estimated $10.6 billion a year in economic activity,” writes Saujani, citing research from The Century Foundation, a nonpartisan progressive think tank.
What Happens Now?
For parents who know or think that their daycare may be impacted (and in a survey conducted by Care.com, 31 percent of parents said they know for sure that their daycare will be), it’s time to explore alternative childcare options ASAP, whether it be a nanny, sitter, family or friends. “Parents can also turn to their employers for support in the meantime by either utilizing existing childcare benefits or asking for them if they’re not available,” advises Bryan Jamele, Head of Government Affairs and Public Policy at Care.com.
And something that everyone can do—whether you’re a parent or not—is reach out to their congressperson and advocate for change. (Find your representative here.) “This is a bipartisan issue and there’s no debating the interconnectedness that accessible and affordable childcare—or lack thereof—has on our economy,’’ says Jamele. “The whole country can rally behind parents during this time with their voices and votes.”