Senate Report Warns Inaction Pushing US Childcare System to 'Brink of Collapse'

Already among the worst and least affordable in the developed world, the U.S. childcare system could soon be "pushed closer to the brink of collapse" if Congress doesn't act before emergency federal funding runs dry at the end of September.

That grave warning is at the heart of a report released Tuesday by Sens. Bernie Sanders (I-Vt.) and Patty Murray (D-Wash.), top members of the Senate Health, Education, Labor, and Pensions (HELP) Committee.

Sanders, the chair of the panel, summarized the report's findings during a HELP Committee hearing on Wednesday, noting that more than $37 billion in pandemic relief funding approved under the American Rescue Plan and other legislation helped keep the nation's fragmented childcare sector afloat during the deadly public health crisis.

"This funding kept over 200,000 childcare providers in business, sustained childcare for nearly 10 million kids, and prevented a million childcare workers from losing their jobs," the Vermont senator said Wednesday, referring to the $24 billion in Child Care Stabilization Grant (CCSG) funds approved under the American Rescue Plan, which Biden signed in March 2021.

All 50 states as well as Washington, D.C., Puerto Rico, Guam, Northern Mariana, and the U.S. Virgin Islands operated Child Care Stabilization programs during the pandemic, according to the Biden White House, and 90% of providers that received funding from the federal grant program said the money helped them keep their doors open during the coronavirus crisis.

"That is the good news," Sanders said Tuesday. "The bad news is that if Congress does nothing, this funding will expire on September 30th of this year, making a very bad situation even worse."

Citing survey responses from more than 12,000 early childhood educators, the new report says the end of the emergency federal funding could force many childcare providers to raise prices for families, serve fewer children, or slash wages for childcare workers who are already badly underpaid.

By law, states have until September 30 to distribute the federal money provided under the American Rescue Plan.

"Just as these grants helped to temporarily fill a gap in funding in the childcare sector," the report notes, "they will likely leave programs with a significant hole when funding runs out on September 30, 2023."

Childcare workers and advocates across the country have been bracing for the end of federal funding for months and sounding the alarm about the consequences of inaction.

In a July 2022 letter, dozens of national organizations warned congressional leaders that failure to make new investments in the nation's funding-starved childcare sector would shove the system "closer to a catastrophic funding cliff that will affect America's entire economy, resulting in higher prices and longer waitlists for families and reduced access to quality care for children, while lower wages push more early educators out of the field."

That letter was sent shortly before Congress passed the Inflation Reduction Act, legislation that was gutted by Sen. Joe Manchin (D-W.Va.) and other right-wing Democrats.

Childcare provisions were stripped out of the bill entirely.

"How can a working family, making $50,000 or $60,000 a year, afford to spend $15,000 or $30,000 on childcare?"

Murray, the former chair of the Senate HELP Committee, said in a statement Tuesday that "failing to invest in childcare means failing to invest in our economy—it means worsening an already serious workforce shortage."

"Our nation's childcare sector was hanging on by a thread before the pandemic, and it was headed straight for collapse when Covid hit our country and providers prepared to close their doors for good," she said. "The historic federal investment in our nation's childcare sector that I fought tooth and nail to deliver saved the childcare sector from collapse."

"But the funding we provided will expire this fall—which will likely force providers to lay off staff or shut down, force parents to leave work when they lose their child care, and take a wrecking ball to our economic recovery—unless we take action," the Washington Democrat added.

As of 2021, The New York Timesreported that year, the governments of rich countries spent an average of $14,000 per kid on childcare annually. The U.S., by contrast, spent just $500 per child.

During Wednesday's hearing, Sanders stressed that in addition to renewing the federal funding that is set to lapse in a matter of months, Congress needs "a vision for the future which understands that every family in America has the right to high-quality, affordable childcare."

"I think that all of us pride ourselves as a nation that loves our kids. We all understand that our children are the future of America. But, we have a funny way of showing that love," Sanders said. "Today, it costs about $15,000 a year, on average, to send an infant to childcare in our country and in D.C. it can cost, in some cases, $30,000 a year. How can a working family, making $50,000 or $60,000 a year, afford to spend $15,000 or $30,000 on childcare?"