White House releases $39 billion in relief funds to keep child care providers afloat

The Biden administration is funneling $39 billion in relief funds to states to help child care providers stay in business or reopen, which it says is the single largest investment in child care in US history.

The money, which comes from the $1.9 trillion relief package that President Joe Biden signed last month, also will assist women in getting back to work and strengthen the economic revival, the White House said.

Providers can use the funds to pay the rent, mortgage, insurance, utility bills, payroll and debts incurred because of the coronavirus pandemic. The money can also be used to buy personal protective equipment and implement safety measures, such as improving ventilation. States also can provide direct subsidies to families to help cover child care costs.

Hundreds of thousands of child care providers and early childhood educators, serving more than 5 million children, should benefit, according to the administration.

Bolstering the nation’s child care and long-term care networks are a top priority for the President and congressional Democrats, who passed the relief bill earlier this year without support from congressional Republicans. The administration, which included $400 billion for elder care in its roughly $2 trillion infrastructure proposal, is also working on a massive “care economy” package that will provide more money for child care, care-giving, universal pre-K and workers hit hardest by the pandemic-fueled economic upheaval.

“In America, child care should be readily available and affordable for all of those who need it, child care workers should be paid fairly and treated with dignity and respect, and small business owners who run child care centers must be fully supported,” Vice President Kamala Harris said Thursday, noting that many who work in the field are women and people of color.

Biden’s American Rescue Plan also provides an expanded child care tax credit to help families cover expenses, as well an augmented child tax credit, each for one year. The former allows parents making less than $125,000 annually to get back up to 50% of $8,000 in costs for one child or $16,000 for two or more children under age 13. Those earning up to $440,000 annually can get a partial credit.

Child care providers have been deeply affected by the outbreak. More than a quarter of programs have remained closed, according to the White House, pointing to a survey from Procare Solutions, a child care management software firm. And three in five have reduced expenses through layoffs, furloughs or pay cuts, according to a December study from the National Association for the Education of Young Children, which the White House cited.

There are 164,000 fewer child care jobs now than there were last year, Harris noted.

Women have been leaving the workforce, often because they have had to care for children whose day care centers or schools have closed or operated on reduced schedules. Since the start of the public health emergency, roughly 2 million women have left the labor force, according to federal data.