Tens of thousands of Massachusetts children could lose access to child care coverage by week’s end if Congress, which is already scrambling to avert a government shutdown, fails to take action, a loss that could send ripple effects across the economy as families try to find care.
More than 56,000 children could lose care, and more than 1,800 child care centers could close, as pandemic-era funding expires by Jan. 30, according to an analysis by the Century Foundation.
That could amount to as much as $219 million in lost earnings for parents, $252 million less in employer productivity, and $9.4 million in vanished tax revenue for the commonwealth, according to the foundation’s analysis. In addition, a minimum of 5,813 child care jobs could be lost as funding expires, the think-tank warned.
The “funding cliff” for child care, as it’s become widely known, also comes as lawmakers on Capitol Hill work to avoid what now appears to be an inevitable government shutdown later this week. That shutdown is expected to bring with it equally damaging consequences as key programs funded by the federal government close their doors until the impasse is resolved.
“For decades, the economics of child care in America have been broken. Care is hard to find — especially for babies too young to enter kindergarten,” U.S. Sen. Elizabeth Warren, D-Mass., posted to X, formerly Twitter, on Sept. 24. “And even when families are lucky enough to score a spot, the costs are crushing. Congress needs to invest in affordable child care.”
The American Rescue Plan, passed in 2021 during the first year of President Joe Biden’s administration, provided $39 billion in funding for child care, according to U.S. Dept. of Health and Human Services data.
That money was divided between two programs: Child Care Stabilization grants ($24 billion) and $15 billion in supplemental money for the the Child Care and Development Fund, federal data showed.
Of that, Massachusetts received $314.2 million for the Child Care Stabilization program, according to Administration for Children and Families data. Companion U.S. House and Senate bills would reauthorize the program for another five years, providing $16 billion in funding.
“Our nation is facing a child care crisis. Child care has long been unaffordable and hard to find for working families,” the lawmakers, U.S. Rep. Katherine Clark, D-5th District, among them, wrote in a fact sheet supporting the legislation.
“Many child care programs struggle to stay in business and can only afford to pay their early childhood educators poverty-level wages. The COVID-19 pandemic pushed the already fragile child care sector to the brink of collapse,” the lawmakers wrote.
In a statement posted to her website, Clark, the House Democratic whip, underscored the “vital role” that child care “plays in our communities and economy.” Despite that, she said, the sector “has long been underfunded and undervalued, and this has only been exacerbated by the pandemic.”
“Just like roads and bridges, child care is fundamental infrastructure to our economy. We must finally start treating it that way – for our kids, families and our economy,” Clark said.
In Massachusetts, the $56 billion budget that Democratic Gov. Maura Healey signed into law in August includes a $475 million appropriation to underwrite Commonwealth Cares for Children (C3) grants to early education providers, WBUR reported.
Healey, who ran for office in 2022 vowing to expand access to affordable child care, noted in a February post on X that “some of the highest child care costs in the country are right here in Massachusetts. We’re reaching a crisis point.”
Meanwhile, lawmakers in the state House and Senate this week are expected to take up a long-awaited tax relief bill that could provide a break to parents struggling with the high cost of care.
In an analysis released last week, the Massachusetts Budget & Policy Center emphasized the key role that such refundable tax credits, as the child care tax credit and earned income tax credit, play in keeping families out of poverty.
State lawmakers are debating two competing proposals to create the Child and Family Tax Credit (CFTC), which is aa refundable tax credit for families with children and adult dependents, according to the think-tank’s analysis.
This new credit would combine two smaller credits, which families must now choose between, and raise the cap on the number of eligible dependents, the analysis indicated. Under one of the proposals, the maximum credit for each dependent would rise to $600 over three years, and then would be indexed to inflation.
“Choosing this more generous option will provide more adequate relief as several other states have done this year,” analysts wrote.
