Washington DC – Today, Vice Chair of the House Democratic Caucus Representative Katherine Clark celebrated the passage of the Child Care is Essential Act and the Child Care for Economic Recovery Act, two comprehensive bills that will stabilize the nation’s child care sector, expand the availability of safe, quality child care for families, and support a robust economic recovery from the COVID-19 crisis. Congresswoman Clark has been calling for a $50 billion bailout of the child care sector since May when it was clear that the pandemic ravaged this vital sector of our economy. Additionally, the legislation includes $10 billion to help child care facilities make necessary safety renovations and PPE purchases as they reopen, the hallmark of Congresswoman Clark’s Child Care is Infrastructure Act introduced last month.
“Child care is a central pillar to our economic infrastructure and a vital lifeline for millions of working families. It is also a neglected industry in crisis. The COVID-19 recession has brought child care providers to the brink of financial collapse and left working moms and dads in every state without access to care for their children and unable to return to work. We can’t recover, reopen or rebuild a stronger America without making this investment in child care”, said Congresswoman Clark. “This historic moment requires funding of historic proportion. Today’s vote underscores the commitment of my colleagues in the House of Representatives to every working family in America and recognizes what we’ve long known: child care is essential. It is now the Senate’s turn to show us where they stand.”
Through the creation of a $50 billion Child Care Stabilization Fund and other critical federal investments and tax subsidies, the two bills will help child care providers safely reopen and operate. Simultaneously, these bills increase access to safe, affordable child care for parents so they can return to their jobs when it is safe to do so.
The Child Care Stabilization Fund in the Child Care is Essential Act will:
- Ensure that child care stabilization grants adequately support providers’ operating expenses and that funding gets to them quickly
- Require that providers continue to pay their staff;
- Provide tuition and copayment relief for working families;
- Promote health and safety through compliance with public health guidance;
- Prioritize providers that serve underserved populations;
- Ensure that grants are awarded equitably across child care settings; and
- Conduct oversight through robust reporting requirements.
A fact sheet on the Child Care is Essential Act can be found here.
The Child Care for Economic Recovery Act will:
- Enhance the child and dependent care tax credit;
- Expand dependent care flexible spending accounts;
- Create a new tax credit to help employees access quality, affordable child care;
- Provide a new refundable payroll tax credit for child care providers;
- Incentivize employers to keep child care workers on payroll with an expansion of the employee retention tax credit;
- Increase funds for the Child Care Entitlement to States program;
- Parlay federal investments into better child care options for working families;
- Provide $850 million to states, the District of Columbia, and all U.S. territories to fill in gaps in dependent care for essential workers during the COVID-19 pandemic; and
- Invest $10 billion in infrastructure to improve child care safety.
A fact sheet on the Child Care for Economic Recovery Act can be found here.
The COVID-19 recession has had a devastating impact on the child care industry, our economy, and working parents. Since March 2020, 60 percent of all child care providers across the nation were forced to shutter completely and have lost months of revenue. Now, 70% of all child care centers are incurring substantial, additional costs for staff, cleaning supplies, and personal protective equipment. This dramatic shortfall in revenue has disrupted the nation’s child care sector to such an extent that it is estimated nearly 40 percent of all providers will be forced to close completely without federal assistance. Closures of this magnitude could ultimately lead to the loss of nearly 4.5 million child care slots and early educator jobs, which are overwhelmingly filled by women and women of color.
According to U.S. Census data released last week, more than 7.5 million American workers could not work in July because they had to stay home to care for a child. Roughly 94 percent of workers who are involuntarily working part time rather than full time due to child care problems are women. Without significant investment from the federal government in child care, working mothers will increasingly be forced to choose between keeping their jobs or taking care of their children.
This loss in the workforce could have major implications for our nation’s economic output. According to the Early Learning Policy Group, the child care industry contributes $99.3 billion annually to the U.S. economy, but American businesses may lose at least $12.7 billion each year in lost productivity, absences, and turnover rate as a result of insufficient access to child care among their employees.