NCPA - National Center for Policy Analysis

FEDERAL AND STATE CHILD CARE EXPENDITURES

June 21, 2006

Federal and state spending on child care essentially doubled between the passage of the 1996 welfare reform law -- the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) -- and 2003, according to Douglas J. Besharov and Caeli A. Higney of the University of Maryland School of Public Policy.

By some counts, there are as many as one hundred programs that support some aspect of child care.  Five of these programs account for almost all government spending that helps low-income mothers work outside the home.  They are the Child Care and Development Fund (CCDF), Temporary Assistance for Needy Families (TANF), Head Start, the Child and Adult Care Food Program (CACFP) and the Social Services Block Grant (SSBG).  Between 1997 and 2003, total spending on these programs almost doubled (rising 84 percent), from about $11.1 billion to about $20.4 billion (in 2002 constant dollars) .

According to the authors:

  • Following the passage of the 1996 welfare reform law, the growth in child care spending was dramatic, but has slowed in the recent years.
  • A significant portion of post-welfare-reform funding for child care comes from unspent TANF block grant funds, making their future availability dependent on TANF caseloads remaining substantially lower than their 1994/1995 choices.
  • Despite some streamlining of child care funding, fragmentation of child care programs is still a problem.

Also:

  • Head Start is losing its dominant place in the constellation of federal child care and early childhood programs.
  • As Head Start's growth has slowed, state-funded prekindergarten programs have been expanded and are on track to be the dominant early childhood education program for low-income children.

Source: Douglas J. Besharov and Caeli A. Higney, "Federal and State Child Care Expenditures Between 1997 and 2003," University of Maryland School of Public Policy's Welfare Reform Academy, May 30, 2006.

 

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