Biden Admin Unveils New Proposals Aimed at Lowering Childcare Costs

Vice President of the United States Kamala Harris speaks onstage in Washington, on June 28, 2023. (Tasos Katopodis/Getty Images for GLAAD)

The Biden administration has introduced a series of proposed measures aimed at making childcare more affordable to some working American families.

The proposed measures, announced on July 11, are linked to an executive order President Joe Biden signed earlier this year calling on federal agencies to find ways to make childcare more affordable.

According to the administration, the proposals will help strengthen the federal Child Care & Development Block Grant (CCDBG) program, which it says helps to support childcare assistance for 1.5 million children and their families on a monthly basis.

If finalized, the new rule would cap childcare copayments for working families at 7 percent of a family’s income and encourage states to waive copayments for families at or below 150 percent of the federal poverty level.

That works out to $37,290 a year for a family of three or $45,000 a year for a family of four, according to data from the Department of Health and Human Services (HHS).

Just 14 states have set copay rates at 7 percent or lower for families participating in CCDBG. The new rule would effectively require all states to do so.

“This change could eliminate copayments entirely for these families and save a family of three more than $250 a month in Ohio, nearly $300 a month in North Carolina, and over $350 in New Hampshire,” a White House fact sheet states.

A young boy plays with toys at a preschool in this file photo. (Matt Cardy/Getty Images)

Childcare Costs Soar to Nearly $11,000

The new measures would also “improve financial stability for child care providers and incentivize their participation in the CCDBG program by ensuring they are paid on-time” and based on program enrollment as opposed to attendance, according to the fact sheet.

Nearly 200,000 providers would start getting paid on time as opposed to retrospectively, the administration said.

Additionally, the proposed rule would make it easier for families to access the CCDBG program by encouraging states to accept online applications for enrollment in the program. It would also extend presumptive eligibility to siblings of children who already receive the subsidy, as opposed to making parents apply again.

Overall, the proposed measures—part of the HHS notice of proposed rulemaking—would help nearly 80,000 families pay less for childcare, according to the administration.

The public will have 45 days to comment on the proposals.

Childcare cost an average of $10,853 per child in 2022, according to Child Care Aware of America.

However, an estimated one in four American parents struggle to pay for childcare, according to a 2022 Pew Research Center survey.

U.S. Vice President Kamala Harris speaks during National Small Business Week in the Rose Garden at the White House in Washington on May 1, 2023. (Madalina Vasiliu/The Epoch Times)

‘Too Expensive for Too Many Families’

Experts have warned the situation may get worse when pandemic-era federal funding for childcare expires in September, potentially impacting up to 3 million children.

Speaking during a press call Tuesday following the announcement of the new measures, Vice President Kamala Harris told reporters that while the CCDBG program “benefits more than 900,000 working families and one-and-a-half million children across our nation” many families still end up paying hundreds of dollars every month out-of-pocket for care.

“As we know, for millions of parents, childcare makes it possible to go to work and to be productive during the course of their day. Childcare helps these Americans stay in the workforce, go to job training, or secure a paid job and earn money for college or retirement. Childcare helps them determine their own future and live with dignity,” Ms. Harris said.

“Unfortunately, childcare, again, remains too expensive for too many families in our nation,” she continued. “In some places, childcare can cost almost $20,000 per child per year. Low-income families often spend one-third of their yearly income on childcare, more than they spend on their rent or mortgage. No family should have to choose between high-quality care for their child or to give up their career or put food on the table.”

The issue of childcare has deeply divided Congress in the past, particularly with regard to plans to keep in place an expanded child tax credit that was implemented during the COVID-19 pandemic, which some Republicans feared would be too costly amid increased government spending and skyrocketing inflation.

However, both sides of the political spectrum have agreed access to affordable childcare is a pressing issue that needs to be swiftly addressed, with Republican lawmakers from a number of states introducing legislation in recent months aimed at lowering childcare costs.