Today, Vice President Kamala Harris announced a new proposed rule for the Child Care & Development Block Grant (CCDBG) program, capping working parents’ copayments to no more than 7% of a family’s income. This move seems obvious given the administration’s consistency in defining affordability at the 7% threshold. This threshold was also explicitly called out in President Biden’s April executive order on care.
tl;dr
Child care costs continue to rise and limiting parent co-pays for child care assistance will be a lifesaver for many, but, there is no additional funding for CCDBG as part of the new rule, so it is possible that some families could lose access. Overall, the change would be a net positive and a big win for families who struggle with child care costs.
What is CCDBG?
CCDBG is the federal program that funds state’s child care assistance programs (like CCCAP in Colorado). This funding helps low-income working families to afford care for children birth to age 13. CCDBG has been around for about 30 years, and it came out of Clinton-era welfare reform. When work requirements for families on welfare were implemented, there became a need to support the cost of child care for these families.
Who uses CCDBG?
Nearly 2 million children receive CCDBG funds each month. States set their own income thresholds, but they cannot provide funding to any family whose income is above 85% of the state median income. Due to limited resources, most states set the income threshold well below this amount. It is estimated that only about 7% of eligible children are actually served by CCDBG.
How would this rule affect families?
Every state has their own rules and policies with regard to CCDBG funding. States are required to have sliding scales for copayments, and they can set the bottom of the scale at $0 per month. The Federal government recommends a benchmark of 7% of a family’s income for the copayment. According to the White House press release, only 14 states have set copayment rates at or below the 7% threshold and about 80,000 families across the country would see their copayments reduced with this new rule.
How will the rule affect funding?
The new rule does not authorize any new funding for CCDBG (Congress would have to do that). So there could be some challenges. Specifically, in order to meet this new requirement, states may need to decrease the number of families served by changing income thresholds or increasing the number of children on waiting lists. Some states could fill this gap by increasing the amount of their funding match. However, on the whole, it is unlikely to have a huge negative impact on a state’s CCDBG allocation, and the benefits to families struggling to afford child care far outweigh this risk.
What do you think? How will this executive order affect families’ access to child care?
