The Child Care and Development Block Grant

The Child Care and Development Block Grant (CCDBG) provides subsidies to assist low-income families in obtaining child care so that parents can work or participate in education or training activities. Discretionary funding for this program is authorized by the Child Care and Development Block Grant Act of 1990 (as amended), which is currently due for reauthorization. Mandatory funding for child care subsidies authorized in Section 418 of the Social Security Act (sometimes referred to as the "Child Care Entitlement to States") is also due for reauthorization. In combination, these two funding streams are commonly referred to as the Child Care and Development Fund (CCDF). The CCDF is the primary source of federal funding dedicated solely to child care subsidies for low-income working and welfare families. The CCDF is administered by the Office of Child Care at the U.S. Department of Health and Human Services (HHS), and provides block grants to states, according to a formula, which are used to subsidize the child care expenses of working families with children under age 13. In addition to providing funding for child care services, funds are also used for activities intended to improve the overall quality and supply of child care for families in general. In recent years, both Congress and the Obama Administration have demonstrated an interest in reauthorizing or otherwise reforming the CCDF. On September 15, 2014, the House approved, by voice vote, the Child Care and Development Block Grant Act of 2014 (S. 1086, as amended). This bill would reauthorize the CCDBG Act through FY2020. It is an amended version of the CCDBG reauthorization bill (S. 1086, S.Rept. 113-138) that was approved by the Senate last March, by a vote of 96-2. Previously, in May 2013, HHS issued a proposed rule intended to overhaul existing regulations on the CCDF. A final rule has not yet been published. Discretionary child care funds are subject to the annual appropriations process. Congress did not enact FY2014 appropriations prior to the start of the fiscal year on October 1, 2013. This resulted in a funding gap and 16-day shutdown of the federal government. Subsequently, two short-term continuing resolutions (P.L. 113-46, P.L. 113-73) provided discretionary funding for the CCDBG until January 17, when the President signed into law a full-year consolidated appropriations act (P.L. 113-76). This law provided $2.360 billion in discretionary CCDBG funding for FY2014, which was reduced to $2.358 billion due to transfers within HHS. This funding level is about 7% more than the discretionary CCDBG's post-sequester FY2013 operating level of $2.206 billion and nearly 5% less than the FY2014 President's Budget request of $2.478 billion. Mandatory child care funds are not typically included in annual appropriation bills. Mandatory funds were directly appropriated (or pre-appropriated) for fiscal years 1997 through 2002 by the 1996 welfare reform law (P.L. 104-193), which created the mandatory component of the CCDF. Temporary extensions provided mandatory CCDF funding into FY2006. On February 8, 2006, a budget reconciliation bill was enacted into law (P.L. 109-171), increasing mandatory child care funding by $1 billion over five years (for a total of $2.917 billion for each of FY2006-FY2010). The authorization and pre-appropriations for mandatory child care funding were set to expire at the end of FY2010, but a series of six short-term extensions maintained mandatory child care funding at the same level ($2.917 billion) for FY2011-FY2013. Congress did not extend mandatory child care funding prior to the 16-day federal shutdown at the beginning of FY2014. However, mandatory child care funding has since been restored at the $2.917 billion level via temporary extensions, the most recent of which (in P.L. 113-76) provides mandatory child care funding through the end of FY2014.