Child Care and Development Block Grant: A Proven Investment

What It Is:

The Child Care and Development Block Grant (CCDBG) provided approximately $5 billion in Fiscal Year 2010 to states to help low-income working parents afford child care and after-school programs for their children. States provide vouchers to eligible families to use at any legally operating child care provider or after-school program. Families earning less than 85 percent of  a state’s median income are eligible to receive subsidies for children under the age of 13. In 2008, approximately 1.6 million children in low-income families received the subsidies.

How It Works:

The U.S. Department of Health and Human Services provides CCDBG money to states in three funding streams. The first stream is a discretionary payment subject to annual appropriations ($2.127 billion in FY 2010), the second is a mandatory payment ($1.2 billion in FY 2010) not requiring a state match, and the third is a mandatory fund ($1.7 billion in FY 2010) that does require a state match.

States may also transfer up to 30% of the Temporary Assistance for Needy Families (TANF) funds to CCDBG. States provide vouchers to eligible families to use at any legally operating child care provider or after-school program.

Whom It Serves:

Families earning less than 85 percent of a stateʼs median income are eligible to receive subsidies for children under the age of 13. In 2008, approximately 1.6 million children in low-income families received the subsidies.

Why Itʼs Important:


Ensuring high-quality early care and education programs for all children in America is critical to sustaining and strengthening businesses, the economy, and your community:


  • Employers need to hire people who are motivated and have a strong work ethic, the ability to solve problems creatively, sufficient math and reading skills, and the ability to lead and work well with others. Research confirms that one of the most important factors in developing these skills is quality, early care and education programs – and the earlier we start, the better the outcomes.
  • A world-class workforce will be created through programs such as high-quality Head Start, Early Head Start, Pre-K and quality child care because they can:
    • Increase pre-math skills by as much as 21%;
    • Increase pre-reading skills by as much as 52%–74% for low-income children;
    • Cut placements in special education by as much as 43%; Increase graduation rates by as much as 44%; and
    • Increase median earnings by as much as 36%.
  • High-quality early childhood programs will strengthen the economy in the short-term with each new $1 invested in the sector generating a broader economic impact of $2.
  • Communities with these programs attract better and more qualified employees, reducing employee absenteeism and turnover, which saves business billions of dollars every year.
  • These programs will strengthen the economy in the long-term, having high returns on investment of up to $16 for every $1 spent.


Overwhelming Unmet Need:

Adequate care for two children in a child care center can cost nearly $16,000 a year—more than the annual salary of a full-time minimum wage worker. CCDBG is still so under-funded that it can help only one out of every seven eligible children.

Funding Level:

Overall funding since 2002 has not kept pace with inflation. In FY 2010, Congress provided approximately $5 billion in funding for CCDBG. The American Recovery and Reinvestment Act (ARRA) provided a temporary infusion of $2 billion total for FY 2009 and FY 2010, but that funding has since expired.

Recommendation:

Americaʼs Edge recommends that Congress provide $2.9 billion in discretionary funding for CCDBG (an increase of $800 million over FY 2010) and provide $3.4 billion for CCDBG mandatory funding (an increase of $500 million over FY 2010). We also recommend Congress enact a strong re-authorization of CCDBG to improve the quality of child care supported through the program.