The Trump administration’s sudden decision to freeze $10bn worth of federal funding for childcare and needy families has not only already thrown the US childcare system into mass confusion, but could also lead to disaster for hundreds of thousands of families within weeks, experts say.
The Department of Health and Human Services (HHS) announced late on Tuesday it would block California, Colorado, Illinois, Minnesota and New York from drawing down money from three major social safety programs over “serious concerns about widespread fraud and misuse of taxpayer dollars in state-administered programs”. In order to access the funding, the Democratic-run states must provide the Trump administration with extensive documentation to allay the fears of fraud.
“The states very likely do not have that data on hand, because it is not data that the federal government has required them to report previously. If they do not have it on hand and it is not a quick, easy lift for them to get, that means they will not be able to access the funds,” Ruth Friedman, a senior fellow at the Century Foundation thinktank and the former head of HHS’s office of childcare, said in a call with reporters.
“Very, very quickly, hundreds of thousands of families across these five states will not get the childcare assistance they need,” she added. “That is going to have reverberating effects on the programs, on the families themselves, create chaos, and really, really could be absolutely catastrophic.”
The affected federal programs include the Child Care and Development Fund (CCDF), which helps pay for the care of about 1.4 million children each month; Temporary Assistance for Needy Families (TANF), which annually helps more than 2 million people pay for food, clothing, childcare and other basic needs; and the Social Service Block Grant (SSBG), which helps about 20 million people each year access a wide array of social services.
In addition to the complete freeze on the five states, the Trump administration is requiring all other states that receive money from the CCDF to submit extra records before they can receive any further funds – a move that one expert called “a de facto freeze”.
Radha Mohan, executive director of the Early Care and Education Consortium, a membership group for childcare providers, compared the Trump administration’s suspensions to a government shutdown. Childcare centers that look after children who use CCDF and other types of government assistance likely won’t close their doors immediately, because states tend to have about three to eight weeks of backup cash, Mohan said. But if that reserve runs out, the economic implications will be immense, as both childcare workers and the people they serve could lose jobs.
“Your families that rely on this care, your primarily low-income families that are eligible for CCDF funding, all of a sudden no longer have a place to drop their kids off, which means that they can’t go to work,” Mohan said.
She added: “Women will be disproportionately affected. That’s largely because women wind up being caregivers in more situations than men. We saw that during the pandemic, when there was a drop-off briefly in available childcare, it was women that quit the workforce in hordes.”
About 60% of the children who attend Christina Valdez’s childcare center in Rochester, Minnesota, rely on some kind of government assistance. If those children lose that help, she warned, it will “destabilize our entire budget”.
“Childcare is a labor-intensive business with very thin margins. Every penny counts. We literally save empty paper towel rolls for our art projects,” she said. “In many areas, there aren’t enough families that can afford childcare to take these spots and programs will have to cut staff. Cutting staff means cutting spots for kids, whether they receive assistance or not. In many cases, it means closing childcare centers altogether. It means a collapse of the childcare system in Minnesota.”
The health department first announced that it would suspend federal funding for childcare in a brief video last week, after a self-described “independent journalist” sparked massive outrage on the right by claiming, in a YouTube video, that Minnesota daycare centers operated by Somali Americans were committing mass fraud. While local and national news media have extensively covered allegations of exploitation of Minnesota’s social safety net over the last several years, the specific allegations in the YouTube video have not been verified by other news sources.
However, it was initially unclear whether the suspension applied to the entire US or only to Minnesota, as was originally reported. Now it’s unclear when or if federal funding will be restored.
“It’s just causing incredible stress for folks who are already working hard and trying to do the right things and take care of their kids and take care of their childcare business,” said Susan Gale Perry, CEO of Child Care Aware of America, a national non-profit that works to support affordable childcare. “To be in this amount of chaos for over a week feels unnecessary and punitive.”
