Congress is increasing child-care funding by nearly $585 million

But while the spending package provides critical funding for important federal programs that help millions of American children and families, it does not address some of President Joe Biden’s previous proposals for universal preschool, subsidized child care or training and support for early childhood educators. And the funding does not address the “overarching, systemic problems” plaguing the childcare industry, says Charlie Joughin, VFYF spokesperson.

Over the past two years, child care providers have faced increased operating costs, shrinking profit margins, unpredictable attendance, and challenges in hiring staff—and it’s taken a toll.

A recent Child Care Aware of America report found that nearly 16,000 providers across the US closed permanently between December 2019 and March 2021 in 37 states with data. But looking at all 50 states, an estimated 20,000 child care programs have ceased operations, or up to 10% of the pre-pandemic industry, according to a new report from the Century Foundation released Thursday.

“The omnibus spending package includes modest, needed increases in funding for limited and existing programs, those that serve only a portion of eligible low-income children,” said Julie Kashen, a senior fellow and director for women’s economic justice at the Century Foundation. “In other words, it provides a little extra support to a sector that teetered on the brink during COVID.”

The funding increases appropriated in the latest funding bill are also much lower than previous emergency funding provided by Congress during the pandemic. The American Rescue Act passed in 2021 provided $40 billion for the child care industry — providing stabilization grants to child care providers across the country.

That funding has saved 3.2 million childcare places and prevented 75,000 permanent childcare center closures, according to the Century Foundation’s latest report.

Similarly, a recent survey from the National Association for the Education of Young Children found 92% of child care providers who received stabilization grants reported that funding helped them stay open.

But it’s not just the childcare industry that’s hurting—a lack of childcare means many parents are still unemployed or underemployed and companies lack needed workers.

Nearly half of workers who quit last year say childcare was a factor in leaving their jobs, according to a recent report from the Pew Research Center. Women have been particularly hard hit. Indeed found around 43% of unemployed men were actively looking for a new job in February compared to 38% of women. Among those not urgently looking for a new job, unemployed women cited childcare responsibilities as a key reason nearly twice as often as men.

“Ultimately, what we really need is to finally create a comprehensive child care and universal pre-K system,” Kashen says. “This is how we serve the vast majority of families, build childcare supply to meet demand, lower costs for parents, and make early care and education a sustainable profession.”