Across the United States, families and child care providers are facing immense pressure. Providers in states like Minnesota are struggling to cover basic operational costs, even facing difficulties in paying their electricity bills while simultaneously striving to keep their doors open. For families, the escalating costs of child care are becoming increasingly burdensome, creating a challenging situation where affordability and accessibility are major concerns. This precarious scenario highlights a critical dilemma: raising wages for child care workers to attract and retain qualified staff would inevitably drive up costs for families, potentially leading to decreased enrollment. Conversely, maintaining already low wages risks losing valuable educators, impacting the quality of care and limiting the capacity to serve enrolled children.
In response to this escalating crisis, Democrats are seeking solutions within the framework of the Build Back Better Act, a sweeping $3.5 trillion federal spending bill. A cornerstone of this legislative effort is addressing the child care challenge through the implementation of what advocates are terming “universal child care.” This initiative represents a significant policy shift, aiming to fundamentally alter how the nation approaches and funds early childhood education and care.
Clare Sanford, government relations chair for the Minnesota Child Care Association, emphasizes the magnitude of this moment, stating, “This is the biggest thing to happen to the early childhood field ever in our country’s history, that [universal child care] is even being debated right now at this scale.” The ambition of these plans is undeniable, yet the intricacies of the child care industry necessitate a clear understanding of what “universal child care” truly entails within the Democratic proposal. Therefore, a crucial question arises: what is universal child care as envisioned by Democrats, and how will it be delivered to American families through legislative action?
Decoding Universal Child Care in the Build Back Better Act
The Build Back Better Act’s approach to achieving “universal” child care centers on a substantial increase in federal funding allocated to states. This financial boost is specifically designed to subsidize child care costs for a broader spectrum of families. The initial funding trajectory outlined in the bill proposes significant investments: $20 billion for fiscal year 2022, followed by $30 billion in 2023, and $40 billion in 2024, with funds remaining accessible through 2027.
While existing state programs, including those in Minnesota, already offer child care subsidies for families meeting specific low-income criteria, the Build Back Better Act distinguishes itself by establishing new programs intended to extend subsidies to all families, irrespective of income level.
Sanford, deeply involved in discussions with lawmakers regarding the child care provisions within the Build Back Better Act, clarifies this distinction: “The money is not going into existing programs that states already have. It is creating new funding streams.” She further elaborates on the structural changes, explaining, “There are existing government structures that federal money flows through to families and child care providers at the state level. But the way this bill is written, those will be vastly overhauled and two brand new funding streams will be created at the federal level.” This signifies a fundamental restructuring of federal child care funding mechanisms, moving towards a more comprehensive and universally accessible system.
The proposed federal programs will maintain income consideration when determining subsidy levels, ensuring that families with greater financial need receive more substantial assistance. However, a key feature of this “universal” approach is the enhanced generosity of subsidies across all income brackets compared to the current system. An amendment proposed by Fifth District Representative Ilhan Omar, a prominent figure as whip of the Congressional Progressive Caucus, further solidifies this commitment to affordability. Omar’s amendment sets clear caps on the proportion of a family’s annual income allocated to child care expenses, stipulating that no family should bear more than seven percent of their income in child care costs. This provision aims to make child care significantly more affordable for families at all income levels, moving closer to the concept of universal access.
In terms of eligible child care settings, the Build Back Better Act adopts an inclusive approach. Minnesota Senator Tina Smith, a long-standing advocate for expanded child care and a close observer of the legislation’s progress in the House, emphasizes that the bill encompasses both large, institutional child care centers and smaller, family-based child care programs.
“This was designed specifically to not push out family providers, specifically to recognize and respect the crucial role that they provide,” Smith explained. This dual focus acknowledges the diverse landscape of child care provision and aims to support all forms of quality care, ensuring families have a range of options to suit their needs.
Beyond child care for younger age groups, the bill also outlines plans for universal preschool. This component proposes that each state would receive federal funding to cover “100 percent of the State’s expenditures in the year for preschool services.” This ambitious initiative aims to establish publicly funded preschool as a standard offering across the nation, further expanding access to early childhood education.
The Build Back Better Act encompasses additional child care-related investments, demonstrating a holistic approach to supporting families and the child care sector. These provisions include the permanent expansion of the Child and Dependent Care Tax Credit, further easing financial burdens for working families, and an expansion of the Child Tax Credit, providing direct financial support to households with children. Furthermore, the bill allocates $15 billion specifically for child care facilities, aiming to improve infrastructure and expand capacity. Recognizing the critical role of child care professionals, the legislation also proposes the establishment of a Child Care Wage Grant program. This program is designed to increase wages for child care providers, addressing issues of low compensation and workforce retention within the sector. These multifaceted investments collectively aim to create a more robust and supportive ecosystem for child care in the United States.
During the House Ways and Means Committee markup of the bill, Chairman Richard Neal (D-MA) underscored the intended impact of these provisions, stating that the bill would “help raise the floor for child care provider pay” through investments in child care wage grants for small businesses. This statement highlights the legislative intent to not only make child care more affordable for families but also to improve the working conditions and compensation of child care professionals.
The Build Back Better Act further details a grant program, earmarking nearly $1.5 billion for awarding grants to eligible child care providers. These grants are specifically intended to help providers offset operational costs and facilitate the provision of “competitive wages, benefits, and other supportive services, including transportation, child care, dependent care, workplace accommodations, and workplace health and safety protections.” Grants awarded under this program are designed to last for three years and are renewable, offering a degree of sustained financial support to child care providers.
Addressing the Core Needs: Is It Sufficient?
Despite the substantial financial commitments and the comprehensive nature of the Build Back Better Act’s child care provisions, questions remain about whether these measures will be sufficient to fully address the multifaceted challenges within the child care sector. Even with enhanced affordability through subsidies, Clare Sanford of the Minnesota Child Care Association raises a critical concern: the potential inadequacy of child care spots to meet the anticipated surge in demand. If universal child care subsidies enable more families to afford care, the existing supply of child care facilities and providers may be insufficient to accommodate all children in need.
A report by the Minnesota Center for Rural Policy and Development has highlighted the prevalence of “child care deserts,” particularly in rural regions of Minnesota. These deserts are characterized by a significant gap between the demand for child care and the availability of licensed providers. This supply-side challenge underscores that simply making child care more affordable may not solve the problem if there are not enough places for children to go. Providers and advocates express hope that the funding allocated through the Build Back Better Act will empower states to effectively address both affordability and supply issues, enabling providers to raise wages, cover operating expenses, and potentially expand their capacity. However, the scale of the existing child care shortage and the potential increase in demand necessitate careful monitoring and ongoing investment.
Christina Valdez, director of Listos Preschool & Child Care in Rochester, points to the recent experiences with temporary grant programs as a cautionary tale. She notes that while earlier grants for providers and families offered temporary relief, these funds have been quickly depleted, highlighting the ongoing and persistent nature of the financial strain. “A lot of families had gotten off waiting lists [for scholarships] this spring, but it was like if your application happened to be at the top of the pile you got funding,” Valdez explained. She further illustrates the cyclical nature of the problem, adding, “Now, they’re back to long waiting lists again.” This underscores the need for sustained and systemic solutions, rather than temporary measures, to truly address the child care crisis.
The current economic realities of the child care industry remain challenging for providers. Valdez shares that caregivers at Listos, a bilingual child care provider, earn approximately $18 per hour, and the center is unable to offer health insurance benefits. This lack of comprehensive benefits, particularly health insurance, poses significant challenges for child care workers, potentially contributing to workforce instability and impacting the quality of care. “If you’re not getting health care through your spouse, it’s really hard to get good health care…so it really puts you in a hard position,” Valdez elaborates, emphasizing the financial vulnerability of many in the child care workforce.
Mary Solheim, director of Playschool Child Care Center in Maplewood, reveals the extent of the financial strain on child care centers, stating that Playschool has been operating at a loss for the past two years. Faced with financial pressures, centers are forced to make difficult choices, often prioritizing essential expenses. “We’ve done a lot of decreasing of the excess expenses,” Solheim explains. She highlights the difficult trade-offs, saying, “Payroll is the thing we always pay first, and everything else becomes what we try to prioritize.” In a stark illustration of the financial precarity, Solheim recounts that her Playschool location has had to defer payments on essential utilities like electricity to ensure that staff wages are paid.
Despite these ongoing challenges, providers like Valdez and Solheim express cautious optimism that increased federal investment through programs like universal child care could lead to meaningful improvements for both families and child care workers.
“I just really feel like we have a true opportunity right now to make huge changes,” Valdez states, conveying a sense of hope. She emphasizes the long-term benefits of investing in early childhood education, adding, “We know that spending money on children ages zero to five is going to have a lifetime, positive impact. We know that. I mean, it’s a good investment. And so I want to see real, true changes being made that will really benefit families, children and early educators.” This sentiment reflects a widespread belief in the transformative potential of universal child care to create a more equitable and supportive system for families, children, and the dedicated professionals who provide early care and education.
