Incoming Administration proposes further economic relief for child care

by | Jan 15, 2021

Early childhood advocates received more detailed information about the Biden administration’s plans to increase the economic stability of the struggling child care industry—and the financial stability of working parents who depend on it. The $1.9 trillion proposal includes:

  • $25 billion in emergency stabilization funds to support providers struggling to keep their businesses open or that had to involuntarily close. The funds could be used to help pay for rent, utilities and payroll, as well as pandemic-related costs, such as PPE and modifications to facilities.
  • An additional $15 billion for the Child Care & Development Block Grant, which supports state-level child care subsidies for low-income families. This is on top of the $10 billion in CCDBG funding signed into law in December.
  • Expanded emergency child care tax credits to help families mitigate child care costs. The refundable tax credits would provide up to $4,000 for one child or $8,000 for two or more children. Families earning between $125,000 and $400,000 would be eligible for a partial tax credit.

Following a year that put enormous strain on the child care industry, this is hopeful news for Nebraska and our state’s social and economic infrastructure. Since the onset of COVID-19, nearly half of our state’s licensed child care programs have, at some point, temporarily suspended operations. As of the start of the new year, approximately 224 programs remain temporarily closed, while 63 more have closed permanently. Nebraska’s working parents, employers and economy cannot easily absorb this lost child care capacity, especially now that we know about the $745 million in direct losses the state already sustains due to gaps in child care even before the pandemic arrived. (See our report, “The Bottom Line,” published August 2020.)

We applaud our Congressional delegation’s past support for pandemic-related economic relief, including the December 2020 bill to bolster funding for the federal Child Care & Development Block Grant. This recently passed legislation may result in up to $57.4 million to Nebraska in CCDBG dollars, including additional support for Head Start programs.

We are optimistic that President-Elect Biden’s proposal will receive the attention and discussion it merits. Undoubtedly, it is only the starting point for negotiations on Capitol Hill, but we believe federal policy leaders understand better than ever the far-reaching effects this industry has on family incomes, business productivity and economic growth.

As welcome as these measures are, emergency federal funding—however substantial—is not the way to build lasting sustainability into this critical component of Nebraska’s infrastructure. It is necessary we use the economic relief available to address immediate concerns forced on us by the pandemic. But in the long term, it will require public- and private-sector resources and leadership to create a Nebraska child care system that is accessible, focused on quality, professionally rewarding and economically viable. At First Five Nebraska, we’re looking forward to a productive year of working with policymakers, business and economic leaders, early childhood advocates and other partners with that goal in mind.

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