Building an Economy that Works for Everyone

As federal stimulus money dries up, child care costs poised to increase

Thrive By Five Washington blogger and dad Paul Nyhan also reports that federal stimulus funds for state child care programs are running out. That means deep cuts this coming budget cycle – and spells bad news for many working families:

The federal stimulus package’s economic cycle is running out, and the end may well usher in an era of deeper cuts in state child care spending.

The federal stimulus package helped states preserve child care aid, CLASP reported this month, with total funding falling slightly to $12.4 billion in 2009 from $12.6 billion in 2008.

The Governor’s budget recommended deep cuts to the state Early Leaning budget (a 28% reduction) by ending the Career and Wage Ladder, which creates incentives for teachers to advance their education and professional development, as well as reducing preschool access for 3-year-olds.

Without those federal funds, those cuts are poised to increase costs for everyone. For example:

1) Lower income families are typically living paycheck to paycheck. If low-income parents decide to keep working and pay for high quality child care, they will likely fall deeper into debt and experience a major financial crisis.

2) Some parents will chose to leave their jobs and use the Temporary Assistance to Needy Families (TANF) program – which is more expensive than providing the child care subsidy.

3) Other parents will keep their jobs and take their kids out of licensed child care. We’ll see younger children left at home alone or in a patchwork of care from neighbors, relatives and friends.

That means higher costs, both in the short- and long-term. Preserving programs that lower costs and promote the common good by investing in people, programs and infrastructure will help get us out of this budget mess — and help prevent future budget woes.

Read more from Paul Nyhan: Federal Stimulus Money Drying Up, Child Care Spending Could Drop Lower

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