Freedom To Learn

During pregnancy and early childhood, a person’s brain architecture—the foundation for perception, learning, communication, movement and behavior—is built, with more than 1 million new neural connections formed every second in infancy. Research shows that high quality early care and education activities improve children’s capacity to learn and succeed in school, their emotional development and their ability to succeed in jobs and careers. Such early care and education narrows achievement gaps and allows parents to succeed at work or in training; an estimated 60 percent of employee turnover could be reduced with access to affordable child care. 

Policy: Increase Funding for the Child Care Entitlement to States and Head Start

Background on Policy 

On average, America’s poorest children are unprepared for school when they first walk through the classroom door. Research has shown that at age four, children living below the poverty line are 18 months below the developmental norm for their age. In addition, these children score significantly lower on cognitive tests than children from the wealthiest families before entering kindergarten. Investing in early childhood education is a cost-effective strategy that will help improve economic growth in the long run. In fact, research has found the return on investment of high-quality early childhood programs to be up to $16 for every $1 invested.

Head Start has a particularly strong track record of helping lift children and families out of poverty. A study of Head Start children in Harrisburg, Pennsylvania found that they had higher scores in the fifth grade than a control group on all academic and executive functioning outcomes. These benefits stay with the children into adulthood. Research shows Head Start children have a higher likelihood of graduating high school, attending college and receiving a post-secondary degree, license or certification. Moreover, children of Head Start graduates are significantly more likely to finish high school and enroll in college and they are significantly less likely to become teen parents or to be involved in the criminal justice system.

Unfortunately, high quality early childhood programs currently reach just a fraction of the children and families who stand to benefit. Only one in six eligible children receives federal child care assistance,and Head Start programs currently serve just 36 percent of eligible children ages 3-5. At the same time, the cost of child care has increased by 25 percent over the past decade. According to data from Child Care Aware, in Pennsylvania the average cost of full-time center-based daycare is $11,560 for an infant. This is about 12 percent of annual income for married couples, and nearly 44 percent of annual income for single parents.

Increasing mandatory funding for the Child Care and Development Fund (CCDF) would allow states to provide a child care subsidy to more families, giving more children access to critical early learning opportunities. 

Policy Description 

Increase the Child Care Entitlement to States (CCES), the mandatory portion of the CCDF. CCES funds are integrated, at the state level, with discretionary allotments from the Child Care and Development Block Grant (CCDBG) and the funds must be spent according to CCDBG Act rules. While historically, CCES funds were the largest portion of the CCDF, CCDBG funds now make up the largest share due to much needed significant increases in FY 2018 and FY 2019. Currently, annual CCES (mandatory) appropriations are about $2.9 billion, while CCDBG (discretionary) appropriations are around $5.2 billion. Increasing the CCES will help to keep pace with discretionary gains and ensure states continue their investments in child care. This would be a stepping-stone towards enacting Senator Patty Murray’s Child Care for Working Families Act.  

Increase Head Start funding by $18 billion annually. Head Start received about $10 billion in FY 2019. The increased funds should be used to serve all eligible 3- and 4-year olds in full day, full year programs (1,020 hours per year).

Expected Impact of Policy 

According to the Center for Law and Social Policy, if there were a $7.1 billion (for a total of $10 billion) increase in mandatory child care funding and the state match remained the same, an estimated 1.57 million additional children could be served with the federal mandatory and state match dollars annually. This estimate includes the cost of inflation to maintain the children who are currently served, and the current provider rates. This would more than double the number of children who are currently served through CCDBG. Increasing mandatory funding would also provide states with a more robust source of funding that would not be dependent on annual appropriations, providing more stability in the program.

Increasing Head Start funding would ensure all eligible 3- and 4-year olds could be served in high-quality programs for at least 1,020 hours per year. Approximately 1.56 million eligible 3–5 year olds would gain access to a Head Start program. The whole child, family-centered approach of Head Start has impacts that stretch beyond improving kindergarten readiness and health outcomes for children served. Head Start helps to lift families by providing parents with needed supports, such as opportunities to increase their advanced education and receive job training. 

Policy: Child Care and Dependent Tax Credit Enhancement Act

Background on Policy 

The cost of child care has increased by 25 percent over the past decade, creating significant financial strain for middle class families. In fact, child care is one of the largest expenses for parents, and especially for single parents. Parents should not be thrust into poverty for having a child. A robust Child Care and Dependent Care Tax Credit supports working parents, and increases labor force participation. This bill would provide significant support to help all working families cover the cost of child care. 

The Child Care and Dependent Tax Credit Enhancement Act enjoys broad support from the Democratic Caucus.

Policy Description 

The Child Care and Dependent Tax Credit Enhancement Act would:

  • Make the full Child Care Tax Credit available to most working families: This bill would make the full credit available to families with income under $120,000. The current phase-down of the credit begins at $15,000 of income.
  • Put more money into a family’s pockets: The bill would increase the maximum credit from $1,050 to $3,000 per child (age 0–13), up to $6,000 per family.  
  • Ensure lower income families see a benefit: The bill would make the credit fully refundable to make sure those with the greatest need benefit.  
  • Retain the value over time: The bill would index benefits to inflation to ensure they keep up with ever-growing costs. 

Expected Impact of Policy 

According to the NASEM report, A Roadmap to Reducing Child Poverty, a robust Child and Dependent Care Tax Credit would: 

  • Raise 872,000 children out of poverty;
  • Increase net employment by more than 500,000 jobs; and
  • Raise aggregate earnings by more than $9 billion.

The NASEM study also found that a robust Child and Dependent Care Tax Credit would be particularly effective in reducing poverty for African Americans, single parents and mothers younger than 25.