The Delta Issue #75

Child Care Is Essential Infrastructure, Not a Discretionary Program

Hey y’all, Jessica here.

We’re at the height of what’s being described as the worst flu season in decades, which means thousands of parents are staying home from work with sick toddlers (or figuring out alternative child care). As a mom of three school-aged boys, I know my time is coming any day now…

For most families, losing access to child care, even while a child is temporarily sick, is a crisis. Without it, parents can’t go to work, keep jobs, or maintain stability week to week.

Now imagine waking up one morning to find out your child care center has closed indefinitely—no notice, no backup, and no idea when (or if) it will reopen.

That scenario is not hypothetical. It is becoming increasingly likely as intermittent freezes on federal child care funding put providers at risk of closure.

What’s happening right now

In late December, the Trump Administration halted federal child care and family assistance funding to Minnesota in response to a viral video accusing several Minneapolis child care centers of fraud. Days later, the administration expanded the freeze to four additional states—California, Colorado, Illinois, and New York—and announced that all states would have to jump through additional new administrative hoops to access their child care funds.

Meanwhile, providers are requesting reimbursement for care they have already delivered, and states do not yet have the cash in hand to pay them.

Until the federal government unfreezes these dollars, states have two options:

Cover payments using emergency or reserve funds, or
Tell providers they cannot pay them at all

Neither option is sustainable, and neither is good for kids or their families. It is undeniable that fraud happens in government programs where large amounts of money pass through many hands, and child care is no exception. The federal government and states do have a responsibility to look for fraud and eliminate it. But freezing all child care funding to root out a handful of bad actors is a sledgehammer approach to a problem that requires precision.

Here’s why these disruptions to CCDF are so dangerous.

Child care providers have no financial buffer

Child care providers are not like public K-12 schools. They do not have state-backed budgets, they do not collect property tax revenue, and they seldom have cash reserves. They are small businesses operating on extremely thin margins, often running in the red even under normal conditions.

Right now, we’re in a true perfect storm for early childhood care. Pandemic-era relief dollars have ended, stripping away the limited cushion states and providers had. And with rising costs, workforce shortages, and the loss of stabilization funds, the entire system has been strained.

Now, on top of everything, the federal government is delaying reimbursements for legitimate child care expenses.

Even when funding eventually resumes, as it has in some states, the damage doesn’t simply reverse. Child care is not a faucet that can be turned on and off. When payments are delayed or paused, providers can’t cover their overhead costs, and they close. More often than not, they stay closed. Staff, who are often low-paid themselves, move on to other jobs, licenses lapse, and classrooms go dark. Temporary disruptions can permanently shrink the child care supply families depend on.

Closures Happen Fast—and Escalate an Existing Affordability Crisis

When a child care center closes, parents are often left with nowhere to send their kids. If their lack of child care means they cannot get to work, they may lose their jobs. Even if families manage to find another option, it’s rarely a comparable one. In the best of times, open slots are scarce, waitlists are long, and prices are often higher than what families can pay.

Parents who think they won’t be affected because they pay full price for child care should think again. Many child care centers serve a mix of subsidized and full-pay families. And when a center shuts down, all families lose care. This is not somebody else’s problem—it can affect every family, everywhere, and in the middle of a much larger affordability crisis.

Most Americans say their communities are no longer affordable, and nearly half report being worse off financially than they were a year ago. Many households, struggling to keep up with rising costs, are dipping into savings, relying more on credit cards, or cutting back wherever they can.

Child care is already one of the biggest costs families bear. Research shows that one in five families faces child care hardship because of cost, meaning they’ve had to cut back on sending their kids to child care. For families who are already in a financially precarious position, taking away child care subsidies could tip them into poverty.

What needs to happen next

Though a judge’s decision has allowed federal child care dollars to begin flowing again in some states, the uncertainty alone is enough to destabilize an already fragile system. The federal government must stop treating early childhood funding like a game of freeze tag.

States and providers need certainty. Even temporary freezes and delays create instability that states and providers cannot predict or plan for. Child care providers in America are small enterprises, and uncertainty is famously bad for business.
Fraud must be addressed with precision. What happened in Minnesota reflects genuine failures of oversight that deserve scrutiny and correction, but there is a critical difference between targeted enforcement and system-wide disruption.
Child care must be treated as essential infrastructure, not as a discretionary spending that can be paused, delayed, or used as leverage in political gamesmanship. Families, employers, and schools all depend on stable access to care.