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The U.S. stands on the precipice of a potentially disastrous child care cliff

70,000 childcare centers are likely to close as federal funding runs out. It could send shockwaves through the economy — and hurt Biden's ratings.

We’re hurtling toward what experts call a “child care cliff.” It could wreak havoc on families, the economy, not to mention President Joe Biden’s approval ratings.

A $24 billion federal emergency relief fund for child care, passed under the American Rescue Plan Act in 2021, is set to expire at the end of September. That means in a few weeks day care centers and preschools across the country will lose a vital source of funding that helped keep them afloat as the economy recovered from the pandemic. Without continued federal aid, a huge swath of the child care industry is likely to collapse — and send shockwaves through the economy as families scramble to adapt to a reduction in child care options.

Part of the issue is that the American child care industry was already struggling a great deal before the pandemic.

The numbers are grim. According to a report by the Century Foundation, a progressive think tank, more than 70,000 child care programs “will likely close,” and "3.2 million children could lose their child care spots." As child care providers are forced to push up their tuition prices to compensate for the absence of aid or shutter altogether, parents will be forced to find alternative arrangements for child care. For many that will mean cutting back work hours or quitting jobs entirely. The cascading effect will be a blow to the economy. The Century Foundation estimates that states will lose $10.6 billion per year in economic revenue, and families will miss out on $9 billion a year in earnings.

This is all a shame, because the emergency funding for child care was working well. It allowed day care centers in some cases to not just stay afloat but to reduce tuition, raise pay for staff, invest in professional development and improve the quality of their services with better equipment. According to the Department of Health and Human Services, the funding helped over 80% of child care centers across the U.S. cover overhead costs and retain employees.

Part of the issue is that the American child care industry was already struggling a great deal before the pandemic. The U.S. is an extreme outlier among affluent nations in how little funding the government provides to assist families with child care. In America, child care centers have long struggled to establish sustainable businesses between the high cost of property and the labor-intensive nature of child care work. And the high cost of tuition for child care was already out of reach for many households before the pandemic. While the emergency funding was a great stabilizing force, the industry is now back on the brink of a major bout of instability.

Democrats sought to address the anticipated end of the emergency funds by including a huge grant for child care in the Build Back Better Act. That plan was meant to guarantee every family in the United States a range of child care options to meet their needs. The bill made it through the House, but not through the Senate, and as the bill was dramatically narrowed in negotiations with conservative Democrats, child care funding didn’t make it into the Inflation Reduction Act that passed in August 2022.  

Unfortunately, despite the cliff it seems like Biden isn’t making child care a top priority in the upcoming government funding fights on Capitol Hill. According to Politico, the White House has signaled that “it wouldn’t prioritize the child care program.” And Democrats are unlikely to pass child care legislation with Republicans controlling the House.

This is a mistake: Letting funding for child care policy lapse isn’t just harmful policy, it’s also bad politics. While the inflation has cooled, families will feel the pinch of fewer and more expensive child care options in a very tangible way. It’s a particularly undesirable vulnerability for Biden as he enters an election year and continues to struggle to sell the economic achievements of his first term in office. 

The Biden administration made a great decision to pour a lot of funding into helping keep the child care industry alive at a time of crisis. But Democrats need to view child care as a social right rather than an option.