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Journal Issue: The Next Generation of Antipoverty Policies Volume 17 Number 2 Fall 2007

Next Steps for Federal Child Care Policy
Mark H. Greenberg


Any national strategy to substantially reduce poverty should address child care for low-income working families. Affordable child care helps parents enter and sustain employment. Assistance with child care costs helps families increase their disposable incomes. Higher-quality care is linked with improved outcomes for children.

Although child care policy should address the needs of poor families, it should be designed to help a much larger group of Americans. Families across the income spectrum need stable, affordable, quality child care, and addressing their needs should not be viewed principally as a poverty or welfare issue. Child care simultaneously provides a work support for parents and an early education experience for children. Policymakers must be mindful of this dual role.

A national child care strategy should reflect four goals. Every parent who needs child care to get or keep work should be able to afford care that does not leave the children in unhealthy or dangerous environments. Every family should be able to place its children in settings that foster education and healthy development. Every family should be able to choose among child care providers. For parental choice to be meaningful, a set of good choices should be available to all families.

U.S. child care policy fails to meet these goals. Current policy has two principal components: tax-based assistance to middle- and higher-income families and block grant funding to states to assist lower-income families. The only federal entitlements to child care assistance are those provided through the tax code, the vast majority of which go to middleand upper-income families. Only a small fraction of the low-income children who are eligible for assistance through the federal block grant framework receive it. The nature and extent of that assistance varies widely from state to state and often fails to provide families access to the safe and developmentally appropriate care that is likely to be available to higher-income families. In many states, working families face waiting lists or can access care only through the welfare system. Low-income families who receive no assistance pay greater shares of their income than do higher-income parents but purchase less expensive care.

A better approach would restructure both tax and nontax policy as part of an overall national child care strategy. Congress should expand the Child and Dependent Care Tax Credit (CDCTC) and replace the existing block grant structure with a new federal-state matching structure to guarantee subsidy assistance to families with incomes below 200 percent of the official poverty line. A guarantee of child care assistance that does not depend on a family’s state of residence, or on its welfare status, or on whether the funding for the year had been exhausted would promote work, ensure better care for children, and reduce poverty among working families.

Such a guarantee would improve families’ ability to purchase care, but it would not, in itself, ensure the availability of good choices for all families. Simply increasing families’ purchasing power will not ensure an adequate supply of care in lower-income communities, increase the educational qualifications and compensation of child care teachers, or promote the development of a coordinated early education system. Ensuring the availability of good choices to all parents will require a combination of demand and supply strategies. Thus, each state should be charged with developing and implementing a strategic plan to improve the quality of care available to families and with coordinating child care with other programs and activities in its early education system. The federal government should provide dedicated funding to support these efforts.