Early Childhood Education

Child Care Development Block Grant (CCDBG)

When Congress passed the 1996 Personal Responsibility and Work Reconciliation Act (PRWORA), replacing Aid to Families with Dependent Children (AFDC) with Temporary Assistance for Needy Families (TANF), thousands of low-income families receiving public assistance were required to participate in the work force. Because of the expected increase in parental employment, especially among single mothers, Congress also raised the federal government’s support of nonparental care by expanding the Child Care Development Block Grant (CCDBG). This expansion gave money to the states to provide vouchers for some welfare recipients and child care providers for care of children under age 13 years. The United States Department of Health and Human Services administers the block grant under the name Child Care Development Fund (CCDF).

Originally created in 1990, CCDBG was designed to assist low-income working families that did not usually receive public assistance. The goal of the block grant was to increase child care availability, affordability, and quality and to enable low- income working families to participate in education and training programs. The expanded CCDBG replaced three federal child care programs: AFDC Child Care (geared to AFDC recipient families enrolled in education or training programs), Transitional Child Care (which helped families moving from AFDC to work), and At Risk Child Care (a program for families “at risk” of AFDC).

CCDBG gives states greater flexibility in allocating child care dollars, allowing them to set their own income limits, copayments, work requirements, and other procedures. There are, however, some federally imposed limitations. CCDBG funds can be used for care that is family-, home- or center-based, public or private, or religious or secular. Funding is available for families with incomes up to 85 percent of the state median for its size. Since CCDBG is not an entitlement program, not every family that is income-eligible receives it. According to the Administration for Children and Families, states generally give priority to several groups: teenage parents, especially those without high-school diplomas or GEDs, families on TANF or those transitioning off, families experiencing medical emergencies, parents enrolled in postsecondary education, families in homeless or spousal abuse shelters, children in foster care or protective services, and low- income parents with children seeking before- and after-school care. Further, states must use at least 4 percent of their allocated funds to improve child care quality.

Eligible families usually receive a child care voucher that they may use with any state-regulated provider. Some states, however, contract directly with providers for a limited number of slots; the provider then receives the payment for that slot from the government, up to a state maximum. Families pay a monthly copayment that is established by the government based on factors such as family size and income. Providers accept the voucher (or contracted government rate) as full payment, though these payments do not always cover the total cost of care. When the vouchers do not cover the full cost, some states allow providers to charge the family a fee in addition to their copayment to make up the differences.

While the CCDBG has been helpful to many low-income families, experts suggest that only 15-20 percent of those eligible for the fund receive it, for various reasons. Some families need the services but are unaware that the vouchers are available; others qualify according to the federal regulations, but do not meet the more stringent state policies; for some states funding is inadequate to meet the increasing need for subsidized care; and still others, particularly those living in expensive areas, have a difficult time finding a provider who will accept the vouchers. In an attempt to address these problems and to respond to increases in work requirements for TANF, welfare reform reauthorization has requested an increase in CCDBG of $1 billion over five years. Some policy experts. however, including the Congressional Budget, estimate that in order to cover most of the eligible families under welfare reform reauthorization, states would need an additional $6.1 billion over a five-year span. CCDBG was due to be reauthorized in July 2002, along with PRWORA, but to date, only the House has passed a reauthorization plan, with no Senate action.

Further Readings: The Child Care and Development Block Grant Act of 1990 (42 USC 9801 et seq.), as amended by the Personal Responsibility and Work Opportunity Act of 1996 (Public Law 104-193) and the Balanced Budget Act of 1997 (Public Law PL 105-33); Collins, A. M., J. I. Layzer, J. L. Kreader, A. Werner, and F. B. Glantz (2002). National study of child care for low-income families: State and community Sub study interim report. U.S. Department of Health and Human Services, Cambridge, MA: Abt Associates; Gish, M. (2002). Child care: Funding and spending under federal block grants. U.S. Department of Health and Human Services. Administration for Children and Families. Available online at http://www.nccic.org/pubs/crsreport.html#2; Long, S. K., and S. J. Clark, S. J. (1997). The new child care development block grant: State funding choices and their implications. Number A-12 in Series, “New Federalism: Issues and Options for States.” Washington, DC: Urban Institute. Available online at http://www.urban.org/url.cfm?ID=307043; Schumacher, R. (2003). Increasing the ability to transfer TANF to CCDF in House Welfare Bill (H.R.4) is still not the answer to unmet child care needs. Washington, DC: Center for Law and Social Policy. Available online at http://www.clasp.org/DMS/Documents/1045149164.99/CCTransfer.pdf.

Robert Leibson Hawkins