Biden’s child care spending poses a challenge as funding nears expiration.
Pandemic-Era Child Care Spending Set to Run Out, Threatening Preschools and Day Care Facilities
Pandemic-era child care spending is set to run out this month, threatening to upend preschools and day care facilities across the country and set back economic recovery touted by President Joe Biden.
After $24 billion from Biden’s American Rescue Plan runs out, the ability for these entities to operate at the same level is expected to be stunted, and people who ventured back into the workplace after the peak of COVID-19 might be forced to leave those jobs due to unavailable or unaffordable child care.
Depletion of Funding Could Lead to Collapse of Child Care Sector
The ARP’s spending helped stabilize the industry, which already faced concerns of inaccessibility prior to the pandemic. But now, one liberal think tank expects the depletion to lead to a collapse of much of the child care sector. When the spending dries up on Sept. 30, over 70,000 child care programs are expected to shutter, according to the Century Foundation. The organization estimated roughly 3.2 million children will be at risk of losing their spots at child care facilities.
An official for the Biden administration said that while the administration maintains the president’s commitment to keeping child care accessible and continuing support for families and child care workers, it believes Congress needs to implement a legislative solution and that Biden is prepared to work with Congress to take the matter on.
Economic Impact and Job Losses
The Century Foundation predicted that families will face losses of $9 billion in total annual earnings if child care goes unaddressed following the depletion. This is the expected result of facilities closing and parents being forced to leave their jobs or cut their hours. Not only will parents be forced to leave their jobs, but those who work within the child care system will be unemployed, leaving an estimated 232,000 people without jobs.
This would also adversely affect states, per the organization. In fact, the Century Foundation said states will likely lose $10.6 billion in tax and business revenue each year following the end of the spending.
The White House indicated it wouldn’t seek to prioritize replenishing the fund in the spending battle in Congress, according to Politico.
Rising Costs and Inflation
Although inflation has fallen in recent months, the price of child care services has risen by 6% in the past year. Child care is understood to cost roughly $10,000 a year. While this has already been pointed to as unaffordable and a reason for much of the country’s inability to access programs, bills are estimated to begin climbing after the fund dries up.
Experts predict significant economic effects from the abrupt end of federal payments from the ARP’s spending without congressional or executive action.
“Child care prices are going to be going up heading into the 2024 election, when everyone’s running on the economy,” said Whitney Pesek, director of federal child care policy at the National Women’s Law Center.
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