Biden’s child care investment poses a threat as funding nears expiration.
A Pandemic-Era Child Care Investment Set to Run Out, Threatening Preschools and Day Care Facilities
A $24 billion investment from President Joe Biden’s American Rescue Plan (ARP) has provided much-needed stability to the child care industry during the pandemic. However, this investment is expected to run out this month, posing a significant threat to the sector and the economic recovery.
Once the ARP funding is depleted, the ability of preschools and day care facilities to operate at the same level will be severely impacted. This could force many parents who returned to work after the peak of COVID-19 to leave their jobs due to the lack of available or affordable child care options.
Impending Collapse of the Child Care Sector
The depletion of the ARP investment is predicted to lead to the collapse of a large portion of the child care sector. The Century Foundation estimates that over 70,000 child care programs will be forced to close their doors on September 30. This closure puts approximately 3.2 million children at risk of losing their spots at these facilities.
The economic consequences of this collapse are significant. Families are expected to face losses of $9 billion in total annual earnings, as parents are forced to leave their jobs or reduce their working hours. Additionally, an estimated 232,000 people who work within the child care system will become unemployed.
States will also suffer financially, with an estimated loss of $10.6 billion in tax and business revenue each year following the end of the investment.
Unaddressed Child Care Crisis
The White House has not indicated a prioritization of replenishing the child care fund in the ongoing spending battle in Congress. This lack of action raises concerns about the future of child care services and the impact on families and the economy.
Furthermore, the cost of child care services has already risen by 6% in the past year, while inflation has fallen. With the depletion of the ARP investment, child care costs are expected to continue to climb, making it even more unaffordable for many families.
Experts warn of significant economic effects if no congressional or executive action is taken to address the abrupt end of federal payments from the ARP’s investment. Whitney Pesek, director of federal child care policy at the National Women’s Law Center, highlights the potential impact on the 2024 election, stating, ”Child care prices are going to be going up heading into the 2024 election, when everyone’s running on the economy.”
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