Economy/Economic Policy

Child Care Cuts Create Funding Crunch in States

Friday, July 14, 2006

Ten years after the national welfare reform law was passed, state officials say they are in a child-care funding crunch. The Congressional Budget Office sees an $11 billion shortfall at current funding levels over the next five years.

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Carol Adams

WASHINGTON, D.C. (WOMENSENEWS)--Ten years after the federal government overhauled the nation's welfare system, key state officials say Congress has shortchanged child care programs as low-income parents, many of whom are single mothers, have moved into the work force.

"We're being increasingly challenged to have enough money for child care," Illinois Department of Human Services Secretary Carol Adams said at a July 11 news briefing on Capitol Hill. "We're very concerned about it."

Adams' counterparts in Washington state and Nevada agreed that the federal government does not give states enough money to cover their child care needs, a problem that will be exacerbated when tougher new welfare laws take effect in October.

Don Winstead, deputy secretary of Florida's Department of Children and Families, dissented, saying his state has adequate funding for child care.

"That having been said," he added, "if anyone would like to provide us more child care funding by the federal government I would not be here to oppose that."

The four officials came to Washington, D.C., to give federal officials and news reporters the state government perspective on the controversial 1996 law that put a stop to more than 60 years of guaranteed cash assistance to low-income single parents. In exchange for benefits, the law required adult recipients to work outside the home--or participate in employment-related activities--and gave states greater discretion over their own welfare programs.

Representing the South, the Midwest, the West and the Pacific Northwest, the officials said the law has been a success because it has transformed state welfare offices into employment agencies that help low-income parents find work. Nationwide, cash welfare caseloads have plummeted, single mothers have moved in larger numbers into the work force, and child poverty rates have fallen, according to the nonpartisan Congressional Research Service in Washington, D.C.


From Welfare to Work

But many families who move from welfare to work remain poor, and the numbers of out-of-wedlock births and children living in single-parent households has not dropped, according to the Congressional Research Service.

In 2003, 35 percent of children were born out of wedlock, slightly higher than the 32 percent who were born out of wedlock in 1995, the year before welfare reform was enacted, according to a 2005 CRS report. Meanwhile, the percent of children living in married families fell just 1 percent--from 73 to 72 percent--in the same time period.

Many of those children are not receiving adequate care, three of the four state officials said at the news conference.

"We will continue to be stretched," said Robin Arnold-Williams, head of Washington state's Department of Social and Health Services.

Robin Arnold-Williams

The House Appropriations Committee voted in June to freeze the budget for the Child Care Development Block Grant at $2.1 billion for fiscal 2007. The grant goes to the states, which in turn give it to parents to pay for child care at centers or in private homes.

That is essentially the same amount the program has received every year since fiscal 2002, despite the rising costs of child care. Child care costs average between $3,000 and $13,000 per year per child, according to the National Women's Law Center in Washington, D.C.

That $2.1 billion is in actuality a budget cut, said Grace Reef, chief of policy and evaluation at the National Association of Childcare Resource and Referral Agencies, an advocacy group in Arlington, Va. "Just like college costs, just like groceries, just like gas, the cost (of child care) goes up every year. So a freeze means you're actually providing less money per year," she said.


Thousands Could Lose Care

If Congress follows the administration's budget, 400,000 fewer children will receive child care over the next five years, said Helen Blank, director of public policy at the National Women's Law Center. Those losses would come on top of the 250,000 children who have already lost child care support since 2000, she said.

The Senate Appropriations Committee is expected to take up the appropriations bill next week, but the legislation is not expected to clear Congress before the midterm elections.

Other sources of federal money for child care programs are also slated for cuts.

The House Appropriations Committee cut $100 million from the $6.9 billion budget for Head Start, the pre-kindergarten program for low-income children, and slashed the budget for the Community Services Block Grant, some of which is used to operate or house child care and Head Start programs, by 29 percent to $450,000.

The committee ignored the president's request to cut funding for the Social Services Block Grant--some of which goes toward state child care programs--by $500,000 and instead froze the grant's budget at $1.7 billion.

"Child care funding must be a higher priority for Congress or low-income women struggling to work and stay independent will risk losing their child care assistance," Blank said. That is especially true under the new welfare law, she said.

On Oct. 1, the start of fiscal 2007, states stand to lose significant portions of federal funding if they fail to enroll at least 50 percent of single-parent welfare families and 90 percent of two-parent families in federally approved employment-related activities. Those are stricter standards than standards laid out in the original 1996 welfare law.

Only four states now meet the 50 percent threshold for single-parent families, according to recent data from the child care resource agency.


Few States Meet Funding Rule

Child care grants are paid for by a combination of mandatory and discretionary funding.

While much of the discretionary child care funding is set for freezes or cuts, the president in February signed a bill that provided an additional $1 billion in mandatory money for child care over the next five years. But that amount still falls short--by about $11 billion--of what is needed nationwide to pay for child care and work support needs and allow for the cost of living, said Blank, citing a report by the Congressional Budget Office, a nonpartisan agency funded by the legislative branch.

At the same time, the administration seeks to channel $750 million over five years to marriage and fatherhood initiatives. Marriage incentive programs have drawn criticism from women's rights activists who say the programs are untested and draw money away from proven poverty programs.

"It's a waste of money knowing that what poor families need are good jobs, good wages, access to health care, access to benefits: things that a wedding ring alone is not going to provide," said Avis Jones-DeWeever at the Institute for Women's Policy Research in Washington, D.C.

Douglas Besharov, a scholar at the American Enterprise Institute, a right-of-center think tank in Washington, D.C., defended the spending on marriage promotion programs, saying experimentation in the area is worthwhile.

He conceded that low-income families will suffer from little additional spending on child care and tougher work requirements, but he said it will not bring about the kind of catastrophe that is predicted by women's rights groups.

"There were doomsday scenarios about the first welfare law," he said. "Advocates just can't cry wolf every time."

Allison Stevens is Washington bureau chief at Women's eNews.

Women's eNews welcomes your comments. E-mail us at editors@womensenews.org.

For more information:

National Association of Child Care Resource and Referral Agencies:
http://www.naccrra.org

Labor-Health and Human Services Appropriations Bill
[Adobe PDF format]:
http://appropriations.house.gov/_files/LH_Detail_SCWEB.pdf

"Study: Welfare Clock Should Stop for College Moms":
http://www.womensenews.org/article.cfm/dyn/aid/2711/



 
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