Federal Update: July 2024

By

Aaron Loewenberg

It's been an extremely busy month when it comes to the federal government and early education. Below is more information about child care discussions at the recent presidential debate, FY2025 appropriations levels for early education, a recent first-of-its-kind national summit on child care innovation, and two Senate committee hearings focused on improving child care.

Presidential Debate

On June 27, President Biden and former President Trump met in Atlanta for the first presidential debate. Over halfway into the debate, moderator Jake Tapper cited the high cost of child care and asked both candidates for their plans to make it more affordable. Those of us who were hoping for detailed policy plans from both Biden and Trump were left disappointed, as Trump used the opportunity to continue his earlier line of attacks on Biden's foreign policy and immigration records.

After claiming that President Trump had done "virtually nothing" on child care during his administration, Biden expressed support for significantly increasing "the child care tax credit", likely referring to his plans for expansions to both the Child and Dependent Care Tax Credit (CDCTC) and the Child Tax Credit. The American Rescue Plan Act (ARPA) of 2021 temporarily provided the largest ever increase to the CDCTC, increasing the amount of expenses that can be used to calculate the credit from $3,000 to $8,000 for one qualifying child and from $6,000 to $16,000 for two qualifying children. ARPA also temporarily made the credit fully refundable, meaning that even taxpayers with little or no income tax liability could benefit. Biden has expressed support for making that expansion permanent.

ARPA also temporarily expanded the Child Tax Credit that helps parents offset some of the cost of raising a child, raising the maximum annual payment from $2,000 per child to $3,600 for children aged zero to five and $3,000 for children between the ages of six and seventeen. Also, for the first time, the payments were delivered in regular, monthly installments, typically via direct deposit. During the campaign, Biden has repeatedly pledged to bring back the expanded version of the credit. Back in January, the House of Representatives overwhelmingly backed an expanded child tax credit as part of a $78 billion tax package, but that package has yet to receive a vote in the Senate due to opposition from many Republicans.

FY2025 Appropriations

On the same day as the debate, the House Subcommittee on Labor, Health and Human Services, Education, and Related Agencies held a markup on proposed funding levels for FY2025. The bill calls for $12.3 billion for Head Start and Early Head Start, a $25 million increase over FY2025, as well as a $25 million increase for the Child Care and Development Block Grant (CCDBG). The bill calls for a cut of $65 million from the Preschool Development Grant Birth Through Five (PDG B-5) program for a total of $250 million for the program, the same amount requested by President Biden in his FY2025 budget request. Finally, the bill calls for the elimination of the Child Care Access Means Parents in Schools (CCAMPIS) program which provides grants to colleges and universities to help students with low incomes afford child care through the use of a sliding fee scale based on income.

On the other side of the Capitol, Senator Patty Murray, Chair of the Senate Appropriations Committee, has repeatedly called for larger increases for non-defense spending and recently announced a deal to add $13.5 billion across non-defense programs. It's likely that FY25 funding bills will not be finalized until after the November election since the Senate still needs to pass its version of the funding bills.

National Child Care Innovation Summit

As if June 27 wasn't busy enough, that day also marked the first-ever National Child Care Innovation Summit, hosted by the Chamber of Commerce and the Department of Commerce. All eight hours of the summit are available to view here and the First Five Years Fund compiled the major themes that emerged. Secretary of Commerce Gina Raimondo began the summit by stating that child care is "one of the most critical economic issues affecting families, businesses, and communities today."

The summit was a bipartisan effort, with remarks from both Democratic and Republican governors and lawmakers. Several business leaders attended and highlighted the importance of offering child care benefits, ranging from on-site care, emergency back-up care plans, and flexible child care spending accounts in order to attract new employees and retain current ones. A panel of governors from Colorado, Indiana, and Massachusetts highlighted child care reforms in their respective states while other expert panels discussed topics ranging from the economic importance of child care to the important role both employers and philanthropy play in improving child care accessibility and affordability.

Senate Hearings on Child Care

On July 9, the Senate Finance Committee held a hearing titled Examining the State of Child Care: How Federal Policy Solutions Can Support Families, Close Existing Gaps, and Strengthen Economic Growth. In his opening remarks, Committee Chair Ron Wyden touted the $24 billion in subsidies provided to the child care industry through ARPA to help keep the industry afloat and criticized his Republican colleagues for blocking an extension of the funding. Wyden also made reference to the long-stalled tax package that includes an expansion of the child tax credit. He noted that, "The tax code is another big tool in the Finance Committee's toolbox that can help give working families a fair shake. Democrats want to put it to work."

For his part, Mike Crapo, ranking member of the Committee, used his statement to throw cold water on the idea of taking more aggressive federal action to improve child care, saying that, "Federal government mandates on child care provider wages or approved sites of service are not the answer. In fact, spending billions of hardworking taxpayer dollars on these approaches would likely only exacerbate costs, placing child care options even further out of reach for families." Crapo insisted that states, not the federal government, are best equipped to design and deliver child care benefits for families.

The roughly four months between now and Election Day will continue to be busy ones for early learning with more discussions of funding levels in Congress and (hopefully) some mentions of these important issues on the campaign trail. We'll keep you posted on all the important developments.