"Child Care and the American Workforce: Removing Barriers to Economic Growth”
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House Education and the Workforce Subcommittee on Early Childhood, Elementary, and Secondary Education U.S. House of Representatives
Follow its sittingsSpeaker 2
So this forces families to make impossible choices. Do they pay for rent, utilities, food, and health care? Or do they pay for childcare? And in too many cases, families settle for lower quality care or may decide to leave the workforce entirely, jeopardizing their financial stability and future opportunities for their children. This issue is especially acute in my home state of Oregon, where the hurdles are both supply and affordability.
And I speak with many Oregonians, often women, who are limited by the lack of access to childcare. But it isn't just women. It's families, and it's the business community as well. Earlier this year, I held a town hall meeting in Klatskenae, which is a rural city of about 1,700 people, very rural, where the head start center is the only childcare available in the entire city. And on Oregon's coast, the limited options for childcare prevent the coastal towns from expanding and thriving, when families have to turn down jobs there because there's no childcare available.
The Oregon legislature created a childcare infrastructure fund in 2023 to help expand childcare options, but the funding is just a drop in the bucket compared to what is truly needed to meet the demand. The lack of affordable care limits opportunities, creates stress for families, and holds back the economy. Childcare challenges for parents and caregivers in the workforce cost the economy an estimated $122,000,000,000 each year in lost earnings, productivity, and revenue. Oregon alone loses about $1,400,000,000 each year. And these numbers reflect the missed economic potential, as parents, and particularly mothers, are forced to leave their jobs or reduce their working hours.
When parents cannot work because they do not have reliable childcare, businesses lose skilled workers, and the economy suffers. And despite the high cost of childcare, care providers are also struggling. The early care and education workforce is overwhelmingly composed of women, particularly women of color. Child care workers are among the lowest paid sectors, and many child care providers have little or no access to other workplace benefits, like health care. It's unacceptable that the people who are caring for our nation's youngest barely make a living wage and have stability in their own lives.
And I've spoken with childcare workers who can't afford childcare for their own children. The childcare workforce is essential to our society, yet their compensation does not reflect the importance of their work. As doctor Friedman included in her testimony, the root of the child care crisis is that we are relying on the private market to solve a problem it cannot. And I know the chairman mentioned public-private partnerships, and that's gonna be part of the testimony today. That might work in some communities, but there are many communities in Oregon and across the country where these do not have the ability or resources to do that.
Without bold and sustained federal investment, childcare costs will continue to rise, and the workforce that provides the care will continue to struggle. We know that investing in child care helps address the needs of children, families, and providers, and we also know that it is a good investment. Thank you, miss Codella Lowe, who you wrote in your testimony that for every $1 invested in early childhood programs, the return is up to $17 in reduced need for public assistance, increased earnings, and better educational outcomes. We know these programs work, yet we still struggle to fund them. I'm grateful that solving the child care crisis is a bipartisan issue.
Democrats and Republicans alike understand the importance of caring for our nation's children. We have bipartisan support for a 12,400,000,000 investment in the child care development block grant. I've been working for years on a bipartisan basis. I don't think Miss Stefanik is here yet. We started working on the child and adult care food program years ago to streamline it and to update it.
But I do need to point out that many of the policies that my colleagues in the majority are still supporting will make life harder, including policies in the big, ugly bill that will cut crucial programs like SNAP and Medicaid. These are programs that support children, families, child care centers, and the child care workforce. Thousands, millions of children in this country get their health benefits from Medicaid and rely on SNAP. So let's acknowledge that hurdles to fully fund childcare limits economic growth, threatens employers and small businesses, hurts working families and the early educator workforce. And because their early years are so critical to development, it hinders the ability of children to meet their full potential.
Again, it is a good investment to invest in early childhood education. It's undeniable that care is necessary for parents, the economy, and the workforce, but it is also important for children. Quality childcare means not just having a place to park your kids during the day, so you can go to work. Childcare is early learning, and social and emotional development. It sets kids up for success for the rest of their lives.
Frankly, childcare is the best investment we can make in our future. We should invest in childcare. We have the Childcare for Working Families Act, and that would cap the cost of childcare at 7% of income, making it affordable for all parents, and also provide historic investments in the childcare workforce, including higher pay, better benefits, and improved training opportunities. This workforce is critical to doing the important work. Again, investing in childcare is an investment in our nation's future.
We can and must enact policies that make childcare accessible, affordable, and high-quality for every family. The cost of inaction is great, and families, workers, and the economy cannot wait any longer. Thank you, Mr. Chairman. I look forward to the discussion, and I yield back.
Speaker 1
Pursuant to committee rule eight, see all members who wish to insert written statements into the record may do so by submitting them to the committee clerk electronically in Microsoft Word format by 5PM 14 days after this hearing. And without objection, the hearing record will remain open for 14 days to allow such statements and other extraneous material noted during the hearing to be submitted for the official hearing record. I know that some of our colleagues who are not permanent members of this subcommittee may be waving on for the purpose of today's hearing. I will now introduce our witnesses. Our first witness is Missus Caitlin Codella Lowe, the managing director of human capital for the Bipartisan Policy Center here in Washington, DC.
And to introduce our second witness, I'd like to recognize the gentleman from Indiana, Representative Messmer. Well, thank you, Chairman Kiley. It's my honor and privilege to introduce the honorable Todd D. Barton, mayor of the city of Crawfordsville in the great state of Indiana. Mayor Barton has been an excellent leader of his community, and I'm eager for him to share how they can apply these successes in Crawfordsville on a larger scale. And with that, Mr. Chairman, I yield back.
Thank you, Mr. Messmer. Our third witness is doctor Ruth Friedman, a senior fellow for the Century Foundation, also here in D.C. And our fourth witness is Miss Celia Hartman Sims, the president and founder of the ABC Darien Group in Houston, Texas. We thank the witnesses for being here today, and we look forward to your testimony. Pursuant to committee rules, I would ask that you each limit your oral presentation to a three-minute summary of your written statement, as committee members have many questions for you.
The clock will count down from 3 minutes. However, pursuant to committee rule eight d and committee practice, we will not cut you off your testimony until you reach five minute mark. I'd also like to remind the witnesses to be aware of your responsibility to provide accurate information to the subcommittee. I'll first recognize Missus Codella Lowe for your testimony.
Speaker 3
Chairman Kiley, ranking member Banamichi, and members of the committee, thank you for the opportunity to testify today. My name is Caitlin Caudela Lowe, and I serve as managing director of the human capital program at the Bipartisan Policy Center. Child care is more than a family issue. It's a foundational component of our economic infrastructure. Yet providers are stretched thin, operating on razor-thin margins with limited capacity to grow or improve quality without raising prices.
Two thirds of families, according to BPC polling, are already paying the most they can afford. This broken market as a whole is holding back families, businesses, and our broader economy. Addressing it is a necessary step towards building a stronger, more competitive workforce. American families are not a one-size-fits-all. They differ in geography, schedule, culture, income, and every day, parents navigate complex decisions to do what's best for their children.
As a working mom of two small children, I know firsthand that there is no more personal or critical choice than deciding how and with whom your child will be cared for. At BPC, our national survey consistently shows that parents prioritize trust and flexibility when choosing childcare. For some, that means center-based care. For others, it's a neighbor, a relative, a home-based provider. Another seeing at home with their child is the right decision for them.
Federal policy should support, not limit, the choices parents must make. Child care is not just a family issue. Child care is a workforce issue and a critical component of our economic infrastructure. Our economy loses more than $120,000,000,000 every year due to breakdowns in the child care system from lost earnings, missed work, and reduced productivity. Approximately 71 percent of all children under the age of five in the US live in a household where all parents work.
58% of parents report major disruptions in work because they couldn't find affordable, reliable childcare. And today, the average cost of childcare exceeds $10,000 per child, and it's more than public college tuition in most states, more than the cost of rent in all 50. Employers are paying the price. Child care challenges lead to higher absenteeism, lower retention, and difficulty in recruiting talent. For small business and frontline industries, in particular, child care is no longer a nice-to-have.
It's a competitive necessity. If we wanna grow our labor force, close talent gaps, and build the best economy in the world, then childcare is not optional. It's essential. The federal government has provided support for families through CCDBG, and that funding is the cornerstone of our nation's childcare system. This program has helped ensure parents are able to make ends meet and access the child care that meets their needs.
However, the system was last updated more than a decade ago, and that system must be modernized to meet the needs of today's families. BPC has long advocated for smart policy updates that can make the system stronger and drive innovation. We believe targeted reforms can expand access, improve affordability, preserve family choice, while also strengthening the workforce and the economy. Modernization should focus on enabling more parents to work and support multiple care options, and recognize that childcare is essential infrastructure that underpins both today's labor force and the development of tomorrow's workforce. It's through that lens that BPC has launched the commission on the American workforce to create a bipartisan strategy to strengthen the workforce, expand economic opportunity, and ensure the United States remains competitive.
Childcare is a critical component of the commission's work because, as we've stated, without stable childcare for families, our workforce and thus our economy breaks. Childcare is not just a personal decision. It's a national priority. It touches every part of our economy. And yet, for far too many families, our current system makes us feel like we are being asked to solve an impossible equation.
I often describe childcare as a three-legged stool: access, quality, and affordability. Each leg is essential, and yet achieving all three at once remains elusive for most parents and equally challenging for policymakers. When one leg is missing, the whole system becomes unstable. Families, employers, and the broader economy are paying the price. We have a responsibility to steady that stool, and through smart policy and targeted reforms and bipartisan cooperation, we can build a system that supports the workforce of today and the workforce of tomorrow.
And the good news is there is bipartisan momentum, and I wanna thank you all for your leadership on that. The bipartisan policy center stands ready to support the committee in advancing practical, lasting solutions that reflect the needs of the workforce and the economic demands. We look forward to working with you. Thank you very much.
Speaker 4
Chairman Kylee, ranking member Bonaccini. Bonamici, and members of the committee. I wanna thank you for inviting me to testify here today. My name is Todd Barton, and I serve as the mayor of Crawfordsville, Indiana. Today, I'm here to share our community's journey in addressing the critical shortage of affordable, high-quality child care, a challenge that has deeply affected our workforce and economic potential.
Early in my tenure, through annual visits with local employers, we heard the same concern. A lack of childcare was keeping people out of the workforce or reducing their productivity. We confirmed this through local and statewide studies, one of which showed our community was losing nearly $8,000,000 annually in business impact alone due to childcare related issues. It was clear childcare wasn't just a family issue, it was an economic issue. In response, we formed a childcare task force in collaboration with county leaders, employers, and the Montgomery County Community Foundation.
That task force evolved into the Montgomery County early childhood coalition, which now leads our efforts to create an accessible, high quality early education system. The coalition's five strategic goals are to improve education, accessibility, affordability, program quality, and support for child-care providers. Our initiatives have been wide-ranging. We launched Camp Milligan, a full-day summer program for school-aged children. We hired a full-time early learning director to support child care providers, created professional development opportunities for educators, and improved affordability for working parents by building sustainability and sustainability funding into our model.
A centerpiece of our effort is the Montgomery County early learning center, which opened earlier this year with 124 new child care seats. This $5,000,000 project was made possible by an unprecedented partnership of 16 entities across government, business, and philanthropy. It has already increased our childcare capacity by over 30%, and is helping us recruit and retain workers in an era of strong local economic growth. Ultimately, we've come to understand that early learning is not only critical for today's workforce, but is essential for shaping the workforce of tomorrow. We are proud of the model we build in Crawfordsville, a data-driven, community-led, and fully collaborative approach that we believe can serve as a template for other rural communities.
But to sustain this scale of work, we need strong federal support. Programs like the Child Care Development Block Grant and employer-provided child care credit are essential tools that we need at our disposal. These programs will help working families stabilize the workforce and invest in the next generation. Thank you for the opportunity to share our story, and I look forward to your questions.
Speaker 5
Thank you. Thank you for inviting me to testify today. I spent 25 years working to increase the high quality early learning programs and access to them. Most recently, as director of the HHS office of child care for the Biden Harris administration, I oversaw the $12,000,000,000 federal child care program known as CCDBG or CCDF, as well as overseeing the $53,000,000,000 in child care COVID relief funding. As director, I spoke regularly with providers, state agencies, tribes, and territories about their child care challenges.
I heard about the CCDF program and how important it was, and the successes of the pandemic relief funding in stabilizing a child care sector and lowering family costs during a very turbulent time. But they also made clear we have a much bigger nationwide child-care crisis. Put simply, parents can't find or afford the childcare they need, and providers can't charge high enough fees to stay afloat. There are three main interrelated problems fueling this crisis. First, there isn't enough childcare to meet the demand, so families struggle to find care that fits their work hours and their family needs.
Childcare for infants and toddlers, care for children with disabilities, care during nontraditional work hours, and in rural areas is particularly scarce. Second, childcare is a major financial strain for families. In almost all states, families pay more for childcare than for housing or food, and the cost of childcare is rising faster than inflation. The high prices hurt family budgets, make family life harder, and cause underemployment and unstable employment. And third, providers, most of whom are small businesses, are struggling to stay afloat and stay staffed because they can't afford to meet the rising costs of labor, rent, insurance, and everyday goods.
In most communities, the business model only works at all by paying childcare staff very low wages with few benefits, and problems recruiting and retaining childcare workers have become particularly acute. Families, businesses, and America's economy are paying the price of this reality to the tune of billions of dollars in lost wages, productivity, and growth every year. The root of the child care crisis is that we are relying on the private market to solve a problem it cannot. The market doesn't provide enough child care to meet family needs because the true cost of care is greater than the prices parents can pay. Providers can't address the workforce shortage without improving compensation, and better compensation and stable operations aren't possible without significant tuition hikes, and parents are already maxed out.
The CCDF program, while absolutely critical for the 900,000 families who get assistance and the millions more who benefit from its quality initiatives, is neither funded nor designed to fix the scope of the childcare problems we're discussing today. Likewise, the Head Start program and the Preschool Development Grant program help with the situation, but they also aren't intended to address the scope of the problem. Solving the childcare crisis requires significant new federal and state investments, comprehensively directed at staff compensation and building a stable supply with a range of childcare options, without the cost falling to parents. Ranking member Scott and Senator Murray have led the way with a transformative plan for the type of childcare reform American families really need. An approach like the Child Care for Working Families Act would address supply issues and reduce costs for millions of families, while building on the flexibility of the current system.
It would eliminate child care as a barrier to parents' stable employment, families' economic stability, and parent and child well-being, giving parents much more freedom to raise strong families. Recent federal proposals to child care and the tax code will not solve the child care crisis because they do little about parent costs or supply issues and do nothing for the child care workforce shortage. Worse, we're going in the wrong direction in three important ways. First, the reconciliation bill is going to exacerbate the childcare workforce shortage, reduce supply, and make it harder for many families to afford childcare. Second, political leadership at HHS has indicated to some stakeholders they intend to get rid of the 2024 rule that finally aligned the CCDF program with federal statute to pay providers on time and more fairly, and when implemented would improve parent choice and help stabilize provider operations.
And third, Doge pushed out half of the federal office of child care staff this spring. Without adequate staffing, federal funds will not go as far, and ultimately, child care will be less safe, harder to find, and more expensive. Our country's approach of relying primarily on a parent-funded broken market fails families, hurts businesses, and harms America's economy. This is a solvable problem but will require transformative investment for America's families. Thank you.
Speaker 6
Chairman Kiley, ranking member Bonamici and members of the subcommittee, thank you so much for the opportunity to speak with you all today. To get straight to the point, as you've heard from the other witnesses, parents of young children can't work without childcare. And because childcare is directly tied to the ability of parents to work, childcare is inextricably tied to employers being able to hire, and communities being able to thrive. Breakdowns in childcare result in parents missing out on income, and lost productivity for employers. K-12 school closures during COVID made clear that parents with young children need childcare to work.
The childcare sector, unlike K-12, understood this, kept its doors open for families, and demonstrated the truly essential service that childcare provides for workers, employers, and the broader economy. Child care access creates economic opportunity at the individual level and economic development at the local level. With limited availability of child care, towns lose residents and businesses. A rural North Carolina county I recently visited described how, for multiple reasons post COVID, it lost over half of its center-based care and 80% of its family child care homes. With so little care now available, residents are having to find childcare in a more populous neighboring county.
If people feel they have to go to another county for childcare, they may decide it better all around to seek work in that neighboring county. Small communities can't survive, let alone grow, without accessible childcare. Nothing, however, is more personal to parents than deciding with whom to leave their child when they go to work. And without a doubt, as others have said, the number one criterion for parents in choosing a child-care provider is trust. Parents aren't simply looking for the cheapest child care arrangement.
They will sacrifice time, convenience, and money to ensure their children are in quality, safe environments. Given the very personal nature of making a childcare decision, parents have varying childcare preferences, indicating strong support for our nation's mixed delivery system of childcare, one that is inclusive of centers, family childcare homes, faith-based providers, for-profit, nonprofit, public, and private providers. No two families or children are alike. What is best for one family will not be best for another family. Parents, not the government, are and should remain the ones who choose what is best for their child.
Respecting parent choice in child care is the core tenet of the federal child care and development block grant and the reason the program has garnered such strong bipartisan support over the years. CCDBG should remain the federal government's hallmark child care program to support America's working families. Affordability, however, is the greatest barrier for working families to access child care they need and want. But why do people ask, is child care so expensive? People, plain and simple.
Staff salaries are by far the greatest budget line item for a child care provider. Yes. A provider might reduce the number of teachers in classrooms, but fewer teachers in classrooms is bad for child safety. To be sure, there are, as in any regulated sector, rules and regulations that can and should be either cut or streamlined to reduce costs, but teachers cannot be reduced. Tackling child care affordability for working families is a public-private endeavor, including government, federal, state, and local, parents, businesses, and religious and other community organizations.
As others have discussed, local communities are addressing the child care access and affordability problem in varying ways, and designing solutions for their local contexts. At the federal government level, parents and businesses show support for a multipronged federal strategy to assist working parents afford child care. The good news is that all of these solutions, all these solutions they support, are existing federal programs. Thus, we don't need new federal programs to address child-care affordability. We need to continue to support and promote the programs we presently have, including child care vouchers provided under CCDBG, the federal government's hallmark federal child care program, federal tax credits, including the employer provided child tax credit, the child independent care tax credit, and dependent care assistant programs, all of which are presently included for enhancement under the House and Senate reconciliation bills. And, three, a host of current federal programs under numerous agencies, including the agricultural department, SBA, that can be used to expand childcare in underserved communities.
In closing, for working families, childcare is a must-have, not a nice-to-have. It is a service that pays immediate economic benefit for individuals being able to work, employers being able to hire, and communities being able to grow. Thank you for the opportunity to speak with you today, and I look forward to your questions.
Speaker 1
Thank you very much. Under committee rule nine, we will now question witnesses under the five-minute rule. The representative from Guam, Mister Moylan, is recognized first.
Speaker 7
Thank you, mister chairman and ranking member, for hosting this important hearing today, and access to high quality, affordable child care is important to many parents and provides the flexibility needed to participate in the workforce. Child care benefits families and communities alike, boosting local economies and empowering parents. Block grant approval is hard to receive because the threshold is so low. Working-class families make too much money to qualify. Even if slightly above the minimum wage, you're disqualified.
Households of two is at 62,711 and $84, and this forces parents to quit their jobs to access CCDBG payments. Miss Sims, something I've heard several times from my constituents is that the current system is broken and encourages reliance on public assistance more than uplifting families. Thresholds for assistance relative to incomes on Guam sometimes incentivize working parents to lead the workforce rather than to participate in it. So how can Congress reform these systems so that public assistance goes hand in hand with social mobility and not against it? And Miss Cardella Lowe, you'll follow the same question, please.
Miss Simp.
Speaker 6
Thank you for the question. We, as you mentioned, the income eligibility, the federal statute limits that to a state. You can't make more than 75% of a state's median income. What's important is to continue, I think, the long bipartisan investments in the child care and development block grant, is that funding has increased. It first doubled under the first Trump administration.
It's continued to double, I mean, to continue to increase ever since. As more funds are in there, it has allowed states to increase their eligibility up to that cap. What's also important, we made some significant changes in the last reauthorization of CCDBG, was to ensure that there was a graduated phase out so that you're not creating a cliff effect, so that if a parent who is presently receiving childcare assistance makes a dollar more, then all of a sudden they automatically lose their assistance. We want that to stay or step downwards. That encourages families to stay in the workforce, but not just stay in the workforce, but to feel like they can take a, you know, a promotion and a raise, and continue to move forward.
Speaker 3
Yeah. I would say what Celia said is absolutely correct. There has been increased funding. Bipartisan Policy Center has supported funding increases for the CCDBG. I think one of the major factors of this is allowing for parents to make choices that are right for them, and also, allow for parents to matriculate in and out of the economy in a way that allows them to get the training necessary to get on to the new jobs or to, continue in, you know, any manner that allows them to have stability in the system.
Speaker 7
Thank you both. Mayor Burton, your city is similar in size to some of Guam's villages, and I think our weather might be a bit different, though. In your testimony, you talked about how operating a childcare business is not economically feasible in smaller communities. Based on your experience and success, how can Congress empower working families and small communities across America?
Speaker 4
Thank you for the question, and I think you're correct. The weather is probably not similar. Yeah. I think, you know, for us, it's figuring out how to bridge those gaps and understanding that in a rural community, the economies of scale are not in our favor. And that's the biggest challenge that we faced in operating child care centers in our community.
And it's finding ways for everyone to come together. You face the reality that government can't solve this alone, private operators can't solve this alone, and in most cases, philanthropy or nonprofits can't solve this. So it's really laying out that business model and looking for those gaps and plugging sustainability into the model.
Speaker 7
Thank you. And finally, Miss Lowe, you began your testimony with the importance of parental choice. I think it's important to remember that although we are one nation, we have many cultures in the country. That's especially true in places like the US territories. Can you elaborate more on how parental choice benefits communities across the country?
Speaker 3
Yeah. I think the reality is that parents are living very different lives from their neighbors, and they need to be able to plug into a child care system that works for the needs that they have. My neighbor works overnights, and, you know, there are very few child care centers that can help to deal with that challenge. Right? And so if we are only thinking about a one-size-fits-all solution, we are not thinking about the vast majority of our economy and the needs that each individual might have.
Speaker 2
Thank you, mister chairman, and thank you all for your excellent testimony. Across Oregon, like most of the country, there's an inadequate supply of appropriately regulated childcare, especially for infants and toddlers. I have a friend who has twin grandbabies. Can you imagine? I mean, it's like, automatically doubles the cost and the challenge.
And I mentioned even before the pandemic, the Oregon Child Care Research Partnership found that all of our 36 counties were childcare deserts, meaning there are three or more children for every available slot. And the demand is far greater than the supply, as we all recognize. Now approximately half of the families in this country live in childcare deserts, and there simply isn't enough to meet the demand, and what exists is unaffordable. That we've established. Nationwide childcare costs have risen about 214% since my daughter was born in 1990.
I'm surprised it's not more than that, from what I'm hearing. And as I mentioned, to help address this, Oregon's legislature created the child care infrastructure fund in 2023. But, again, just a drop in the bucket. At the federal level, we do not have a similar program dedicated to building out the supply of child care. So doctor Friedman, welcome back to the committee.
What policies have shown promise in increasing the supply of affordable childcare?
Speaker 5
Thank you very much for the question. So, you know, interestingly, we have seen just in the past year a slight tick up in supply for the first time. Interestingly, a decent tick up in family child care in a few different states: California, Massachusetts, and Virginia. I don't think it's an accident. I think this is a combination of a few different things.
One is, states use some of their COVID relief money to increase supply. They made start-up grants, expansion grants. They created family child care support networks to try to make the business side easier for family child care. California, for the first time, made health care and retirement benefits available for family child care. And we have seen some investments by states specifically aimed at trying to increase supply, because they've recognized it is such a problem.
In addition, one of the things we did in the administration that I think was very important is with CCDBG, we decided to enforce one of its very important tenets, which requires reimbursement rates to not be so low that parents don't have access to care. And states reacted by increasing their reimbursement rates. Their rates for family child care were particularly low. In addition, we have seen more states try grants and contracts to try to address supply. Supply is a priority.
And I think what we see is when there are investments in increasing supply, they are effective. What makes me nervous is some of the state investments are already being zeroed out. There were some private investments I know in some states where we saw increases that are not part of their next year budgets, and, you know, it needs sustained investment.
Speaker 2
I appreciate that. I know recruitment and retention are huge concerns. Doctor Freedman, again, immigrants make up about 20% of the child care workforce nationwide, and in some urban areas, up to 50% of the workforce. And I'm hearing from constituents in Oregon who have significant concerns about immigration enforcement as it relates to childcare, particularly with, for example, TPS workers, DREAMers. The Trump administration as well as some of my colleagues across the aisle have demonized immigrants even though they contribute greatly to our economy, and our child care system relies on immigrant workers in many places.
And, unfortunately, we have not been able to pass Humane Immigration Reform or even the DREAM Act to give these hardworking, aspiring Americans a path to citizenship. And since 2011, child care programs were considered off-limits for immigration enforcement. But the president ended this policy on day one, meaning that US Immigration and Customs Enforcement can now enter schools, daycare centers, and other locations where children spend their days. So doctor Friedman, I know you're not an immigration expert, but do you agree that immigrants play an important role in the child care sector? And if child care workers do not feel safe working in the sector, what would it take to prepare and educate thousands of new child care providers in a short period of time?
Speaker 5
Yeah. Thank you. There's no doubt that immigrants play a large part in providing child care in this country. And if that important provider population were to disappear, we would be in real trouble. Child care would go away.
We already are seeing that there aren't enough child care staff to keep all of the classrooms open, in existing programs, and programs are closing down because of lack of staff. So if the childcare worker crisis increases, we will see childcare close and become less available and more expensive.
Speaker 9
Thank you, mister chairman, and thank you to all of our testifiers here today. It's great to be talking about such an important issue for working families and, also, the way that it impacts our economic growth here in America. It's also great to see that there is broad bipartisan recognition of the problem. I think everybody is recognizing the problem for working families to access quality and affordable childcare. The barrier that it creates for people going back into the workforce after they have their child, and also the challenges that we face with child care providers.
We see this problem in my district in Pennsylvania, where there is this mismatch in our local marketplace of the quality, affordable, accessible childcare the people are looking for and what's available for working families as they try to reenter that market. So, great to see that. Now my questions, I'm gonna go to Ms. Sims first. I have legislation, House Resolution 1426, which would expand the child independent care tax credit so parents can afford a broader range of child options.
And I would love to hear your perspective as to why it's important that the federal policies that we actually put out give families the flexibility to choose the child care arrangements that best meet their individual needs.
Speaker 6
Sure. As I mentioned in my testimony, when I think, you know, the tax credits and CCDBG, it's all of the above. There's not gonna be one singular program that can solve everything. And similarly, that is the same thing with a child care provider. There is not one same provider for every parent or for every child.
There are a number of parents who have two children, and one child, they will put in a child care center because they understand that child will thrive there, but they may take the other child and want to enroll them in a family child care home because that smaller setting is best for them. Similar faith-based providers, you know, again, trust is the number one criterion. And so if that is your faith community, that is where you're gonna seek, and we want to have all of those solutions available for our parents. But, yes, it's all of the above in terms of the types of programs we need. Tax, there's tax relief.
There is a voucher program. And on the parents, there's not one singular solution, so we don't want to prejudice one provider over another.
Speaker 9
Well, I appreciate that, and I agree that the importance of choice is so paramount across all educational opportunities, and that extends to childcare and early learning as well. So appreciate your thoughts there. Mayor Barton, I'll go to you next. You've shown great local leadership on this topic, and I wanna commend you for everything that you've done in your local community so far. How could policies, like you've put in place there, actually reflect this choice and the individuals from the families and employers in your local community?
How did you work that into your solutions? All of these different thoughts from local stakeholders into what you've put together, just a really terrific solution.
Speaker 4
I think we acknowledged, you know, from the very beginning that choice had to be a part of what we were offering. And we were very aware that as we were in the fundraising phase and creating our early learning center, we didn't want to create a situation where it was the government-sanctioned child care option for our community. We wanted people to have a choice. So, additionally, we didn't want to lose existing child care capacity in our community. So we built into our system to not only expand capacity, but to support the existing capacity, which is very diverse.
It's a combination of home-based, center-based, know, faith-based, all those pieces coming together. And we knew that we needed that variety and those options in our community. So we deliberately incorporated that into our model.
Speaker 9
Thank you. And I think it is a model that what we've heard so far really could be replicated and expanded elsewhere. So thank you for your leadership on this topic. Thank you. Finally, I'll go to Ms.
Lowe talking about access to quality, affordable child care. We've talked a little bit so far about the challenges that providers face in increasing supply of child care providers, not only in terms of the facilities, but also the workers there, getting them into those positions, making sure that they're earning a wage that they can actually sustain their own families in these roles. So tell me about your thoughts on what we should be doing to increase supply and make it more likely that we get more child care providers online and operational.
Speaker 3
Yeah. Thank you for the question. I think providers, as you know, typically are operating on razor-thin margins. As we know, staff is the highest cost that they are paying out. And we know that in order to make any changes to the system, they almost are always faced with raising tuition rates, and we know that parents most likely just cannot afford more.
And so they are sort of put into an impossible equation. And in a lot of cases, any increased costs obviously are put to families. And so there is, opportunities to think about what we're doing in CCDBG and allow for federal capital investments to, excuse me, for the providers to help to, sorry, help to invest in their facilities and meet the needs that each of these facilities need in order to grow and expand.
Speaker 9
Great. Well, thank you. Again, I wanna thank all of you for being here today. Just a terrific topic. I'm glad we're focusing on it.
On this subcommittee, I'd like to thank the leadership of our chairman. Look forward to working with everybody on this problem that we all recognize, to find some great bipartisan solutions, to address these challenges and help working families across the country. Thank you, and I yield back.
Speaker 10
Thank you, Mr. Chairman. I appreciate that we all understand and agree that there is a childcare crisis in this country. The cost of childcare, if you could even find it, pushes thousands of families into poverty every year. In Pennsylvania, infant and toddler care costs an average of $14,000 per year. That's more than some college tuition.
We need childcare in this country. We need it so that all parents and caregivers have the option to participate in the workforce and provide for their families. We need it to support children's early cognitive, social, and emotional development, which we know has lasting effects into adulthood. We need it because, as human beings, it's our moral obligation to care for one another, which some consider a radical stance. I don't, of course.
We need more federal investment in child care because existing programs are, quite frankly, not cutting it. Less than a third of children in my district receive subsidies that they're eligible for. That leaves almost 7,000 children in my district, whose families cannot afford childcare and who cannot access subsidies. Meanwhile, the average childcare worker in my district makes less than $30,000 per year. That's almost $40,000 less than the average kindergarten teacher, who is also obviously grossly underpaid as a profession.
Childcare workers are overwhelmingly women, disproportionately women of color, of course. Yet black early childhood educators still make less than 80% of what their white counterparts made. So this is a crisis from every single angle. This is especially insulting considering how much of today's childcare infrastructure we owe to black communities in the civil rights movement when Head Start was first founded. RID states like Mississippi refused federal HIT Start grants, arguing that benefits to Black children discriminated against white children, an argument that is eerily similar to the current administration's rhetoric.
But groups like Child Development Group of Mississippi, run by civil rights leaders and black mothers, persisted to ensure that his start was successful. When school superintendents refused to run out buildings, school buildings are blessed to His Start programs. Communities came together to make sure that children had a place to go and a way to get there. So we have models of success. Since then, His Start has served over 40,000,000 people, including me and over, you know, 2,500 children in my district who are enrolled right now.
His Start success turned into a program supported across political and geographic lines. So when a leaked proposal from the Department of Health and Human Services earlier this year threatened to eliminate his start. This broad support is why it was, ultimately, still included in administration's budget request. So doctor Freeman, briefly, what would happen if families and children, including the 2,500 children in my district, what would happen if his start were cut?
Speaker 5
So if a head start were cut or eliminated, it would have a number of really devastating consequences in this country. First, for the families who would be receiving Head Start, they would lose out on that very important early childhood programming. And the families who receive very important wraparound services, help finding jobs, help receiving various sources of social services, would lose out on that as well. In addition, it would absolutely and immediately expand the childcare crisis.
Speaker 5
That we have in this country. And so you would have 750,000 families who suddenly did not have childcare and would need to find it, and it would have huge economic impacts as well.
Speaker 10
Real quickly, earlier this year, the administration closed five regional historic offices and did fire hundreds of employees within the administration for children and families. How do those office closures and employee firings impact the program?
Speaker 5
Yeah. We are already seeing very bad impacts from those closings. Local programs are not getting the support and the answers they need. Grants are coming slowly to them, which is very, very problematic in Head Start because they really work month to month with their budget and lost an enormous amount of expertise on the local needs those programs serve.
Speaker 10
Thank you. So even if the Historat is ultimately funded, if the office of Head Start and its regional offices are not staffed, it's still set up to fail. As you pointed out in your testimony, Doctor Friedman, even at its best, Historic can't address the full scope of the child care crisis. In order to do that and remove barriers to economic growth, we have to address the persistent racial and gender wage gaps within the childcare industry. We need to invest in programs like SNAP and Medicaid that over 20% of Pennsylvania's early childhood educators rely on, and that House Republicans just cut in the reconciliation bill they passed.
We need much more federal investment in childcare. We know that for every dollar we invest in early childhood education, we save substantially more on services that children won't need as they grow up. This is why we need to pass a Democrat legislation like the Child Care for Every Community Act and Child Care for Working Families Act, which I'm looking forward to introducing with ranking member Scott in the near future. These bills would help put an end to this crisis by making sure families actually have access to child care slots, that no family spends more than 7% of their income on child care, and that all early childhood educators make a livable wage. Thank you so much for the time, and I yield back.
Speaker 12
Well, thank you, mister chairman, and for the subject matter we have today and for this hearing. And to all of you on the panel who have shared your time and your expertise. This is a very relevant subject I think all of us are dealing with. Mayor Barton, do you think the federal government on its own has the ability to simply spend or regulate its way out of the childcare crisis that we're discussing today?
Speaker 4
That's a good question to ask somebody in local government, guess. But, I appreciate the question. No. I don't think so. I think it takes all of us coming together.
And, you know, from the local rural perspective, right, and I'm in a rural community, I think there's an understanding that the current system is broken, and we talk about that a lot. We talk about, you know, the business model is broken, but also, on the funding side. And I won't pretend to know what funding is available or isn't available on the federal side. But I will tell you that, you know, the current system, the CDBG funding with its focus on vouchers, that's fantastic if you have seats. And in the rural communities, you can have a voucher.
There are vouchers out there, but there are no seats. Right? So we have to really focus on the side of this, helps us incentivize the business model to get the seats, so that they exist, so that people can even use the vouchers that are out there. So, you know, it's not possible to spend our way out of this, but it's gonna take a combination of federal spending and federal focus, along with states, local governments, and businesses ultimately. And I think that's the unique aspect of our model was engaging the businesses in this discussion because, you know, a reality in a rural community, they are competing for workforce.
And everything they can do to make themselves more competitive with the business down the road, they need to be doing. And we saw that with, you know, near-site wellness clinics on the health side, and that has now spilled over to the child care side as well.
Speaker 12
Well, thank you for your answer. The fact is contrary to the beliefs of those on the other side of the aisle, simply spending more federal tax dollars or increasing federal regulations won't solve this issue. And as a representative of a largely rural district myself, I've also seen firsthand the outsized effects that accessible child care can have on rural communities. And quite frankly, that was one reason I was greatly encouraged by your testimony, Mayor, detailing the actions that you and other community leaders took in Montgomery County, Indiana, to establish a coalition to tackle the problem. So I wanna give you a chance for in the few minutes we have left, as legislators, what can we do in our capacity to help communities like yours meet today's childcare challenges at the local level?
Speaker 4
I think the most important thing is to create an environment where we can innovate. Every community is different, and giving us the flexibility to come up with new solutions like we've done. You know, sadly, we have at times said we're going to solve this problem on our own because we just realized that the help's not coming from above. Right? And so giving communities the ability to do that, and that flexibility is probably the single most important thing you can do.
Then becoming a partner and looking at the model we've created, the model we've created can be applied, you know, more globally across the nation if we so choose to do, but you have to create the environment that allows that, and that doesn't exist in a lot of areas.
Speaker 12
And on that same note, I'll ask from your perspective. Conversely, what is Washington doing that could hinder the growth in the child care space? Another good question.
Speaker 4
Know, I don't know that I can really answer what they're doing that's hindering it other than, you know, when you create situations where that wage pressure keeps people out of this workforce, you know, childcare is gonna be the first place we're gonna see that. Right? And so we have to find ways to fill in those gaps and address that piece of it. I think the other piece, you know, from the federal side is, you know, the more of these solutions that are driven through state governments, and I'm speaking totally from the local level here, the more of those solutions that are driven through state governments, the more levels of confusion that, you know, develops. So anything you can do to streamline that process and, again, give those local governments the flexibility and the communities the chance to innovate and come up with different solutions would be great.
Speaker 12
Thank you, sir. Miss Sims, real quickly, in the seconds I have left, in your testimony, you mentioned the varying child care preferences parents could have for their kids, including faith-based providers. In your view, what role can faith-based providers play in increasing access to child care services?
Speaker 6
I think primarily it's to continue to participate in the program. And, also, I think there's much more we can do to advertise to the faith community that CCDBG is a very unique program. You can participate in the program and not have to check your faith at the door. And that is a crucial piece of what makes CCDBG such a unique program, is that they can fully participate. But often, we have put roadblocks up for faith providers, and they need to understand that this is a completely inclusive program for them.
Speaker 12
And I appreciate that because in the past, the proposals on the other side have tried to force faith-based institutions to choose between operating according to their sincerely held beliefs or maintaining access to federal funds. And I think you make an excellent point. Mister chairman, I yield back.
Speaker 13
Thank you, mister chairman, and thank you to the witnesses for being here today and for your testimony. After years of working families struggling to afford the cost of childcare, I'm glad to see that this committee has finally decided to hold a meeting, a hearing on this subject because childcare is hard to find, and it's even harder for working families to afford. This is a crisis, and congress needs to work tirelessly to ensure that our children are cared for. What sort of solutions are Republicans bringing to the table? Well, the Department of Labor cut childcare for its employees, and the president isn't requesting any additional funding for Head Start.
As Maya Angelou reminded us, when someone shows you who they are, believe them. House Democrats are working to make childcare more affordable and to ensure that childcare workers can make ends meet. We're introducing legislation, as you've heard, like the Child Care for Working Families Act, because we understand that as Marion Wright Elderman said, the future which we hold and trust for our own children will be shaped by our fairness to other people's children as well. Doctor Freedman, child care professionals in a center earn an average of $33,140 per year, and that puts many child care workers in the position of not being able to afford child care for their children. So can you tell us more about the child care workers in this country and whether most of them can make ends meet based only on the money that they make from working in a childcare center.
And how do these wages impact the childcare workforce?
Speaker 5
Thank you. So, as you said, the childcare workforce is one of the lowest-paid professions in this country despite the very essential and important work that they do every day for families and for this country. The real problem is that parents can't pay higher fees, and providers can barely keep the staff that we have. In talking to providers over the past few years, you know, what I heard over and over again is they continue to lose staff to places like fast food or Costco because those places pay better and have better benefits. And unless we address the wages of the child care workforce, we will not have enough child care in this country.
Speaker 13
Thank you. So because of low wages, many care workers rely on public assistance in order to survive. And researchers at Berkeley estimate that 43% of the childcare workers, the families rely on some kind of public assistance like SNAP or Medicaid to survive on these insufficient wages. Some of my colleagues across the aisle might be under the impression that recipients of Medicare or SNAP do not work, but that's just not true. Doctor Freeman, if cuts to Medicaid or SNAP made it impossible for child care workers to make ends meet, what would you expect to happen, and would they be able to keep working?
And now if those workers didn't keep working, what would the impact be on child care costs and availability for other families?
Speaker 5
I think the cuts, the proposed cuts to Medicaid and SNAP are very dangerous for the childcare workforce. About 30% of childcare workers account on Medicaid. In expansion states, childcare workforce has health insurance at four times the rate of states who did not expand. And so if those cuts go through, you're gonna see that the workforce cannot make ends meet, and they will leave their childcare jobs for other jobs. And as a result, we will see the childcare supply in this country go down.
Speaker 13
Thank you, ma'am. In your testimony, doctor Freeman, you mentioned the department of government efficiency cuts at the office of childcare. So could you provide more details about what those employees did to support the child care development fund, and how these firings will impact the administration of the child care development fund?
Speaker 5
Absolutely. So Congress just recently gave the Office of Child Care the resources it needed to support implementation of CCDF. And those staff were doing a variety of things. One of the things that we heard from states is that the Office of Child Care was not responsive enough quickly with state questions, and that we needed more timely responses. We needed more timely monitoring so that they knew what they were doing, and what they could be doing better.
In addition, the five regional offices that closed, those experts very closely worked with state agencies to maximize the state flexibility and state dollars. So we lost all of that expertise. And by cutting the staff by 50%, everyone has to do another job. You can't do the same job. You can't support the program.
You can't oversee the program correctly.
Speaker 1
I'll now recognize myself for five minutes. Miss, missus, Cudela Lowe, we've been talking today a lot about how about the economic consequences of parents having to drop out of the workforce because of the unaffordability of childcare. And then, because you're not in the workforce, you become even more unable to afford child care, and it's this sort of vicious, vicious cycle. Conversely, I'd have to imagine it's also true that there are families who actually delay having children because of the unaffordability of access to care. And we know that this is a general trend in this country, is delaying having. There's a lot of reasons for it, but I have to imagine this is one of them.
Is there evidence for that this is one of the factors that's causing families to delay, like, expanding their family?
Speaker 6
I've seen some news reports, but I've not read any of the research to validate that one way or another.
Speaker 1
Yeah. So it seems that the goal is to be able to give people all of the options they can in order to have to plan their families, in the way that they'd like and to balance that with their careers. And so that strikes me as what should be the goal when it comes to these issues of affordability. Another issue we've touched on repeatedly is the workforce challenges faced by childcare providers. And, you know, we're in this period of great transition in many industries, which is likely to accelerate in the next few years with advancements in AI and other technology that will likely lead to the need for people to have career transitions.
The childcare industry is probably one that is gonna be among the least affected because of the highly human and personal nature of the work. So, is there an opportunity here to have job retraining type programs that will move people into the childcare industry? I'll give that to you as well.
Speaker 3
Sure. And thank you for the question. I will say that, personally, being a mom of two, childcare is a major factor, in affordability of childcare is a major factor. And in most urban areas, it is extremely challenging. But, in terms of workforce, this is, I have to say that the Bipartisan Policy Center launched a commission on the American workforce earlier this year.
Getting at exactly that, we are in a moment of great transition, and the skills necessary to take on any job require a lot of time and attention at a federal level and also at a state and local level. And these are some of the issues that we are tackling right now, thinking about how do you use opportunities to train and retain, retrain workers to put them into or provide opportunities for them to matriculate into jobs that we know the economy will be able to sustain and also sustain them?
Speaker 1
Great. Yeah. I think this is just a huge opportunity that could really help with a big element of this problem. Finally, Mayor Barton. Very inspiring to see the work that you've done in your community.
I'm curious. You mentioned that the center that's been started as a collaboration among the private sector philanthropy and the local government. So what is sort of the role of the business community here? In that case, it seems you kind of came together around a center that could be used by multiple families. Some employers provide sort of in-house services to employees if they're big enough.
So how can we really create the right incentives for the business community to help with this problem?
Speaker 4
Well, this was born out of our annual visits with those businesses, and we repeatedly heard that the child care issue was keeping people out of the workforce. There was also the realization that they were willing to invest in the health side with the near site wellness clinics. So that was a moment for us to understand that maybe we could translate that to the child care side. Their involvement in this has been really on the fundraising and the sustainability side. So each of those businesses has committed at different levels to the initial construction and the sustainability model.
We sustain our center with ongoing funding. It's not a one-time. And that's something we were very aware of as we created this model. We didn't wanna open a center and have it closed two years later, because it wasn't sustainable. So that piece is in there as well.
That's the role of the businesses there. In exchange, their employees get priority seating, so they get to move to the top of the list, you know, because sometimes we have more requests than seats. They also get a seat on the governing board that oversees the center. We give them some say in how we operate it, but, you know, we really rely on the professional input of the operator, and then the governing board there is really looking after the financial side of it. But businesses have to have a stake in this.
They have to be involved. And it's about, you know, their success in our community as an employer, being able to attract and retain employees. And, you know, as we move forward, there's no single greater factor for these businesses to succeed than to think about the pipeline for tomorrow. And I think they're investing in what's gonna happen in 20 years.
Speaker 14
Thank you. Thank you so much to our witnesses for being here today. Very helpful testimonies. It's no question that the cost of living has gone up much faster than wages over the years. Having one source of income is often extremely unrealistic.
So for many families with young children, they have to choose between a second income or paying up for childcare. I represent Phoenix, Arizona. And in Arizona, the price of center-based childcare for two children is over $27,000 annually, according to recent research by Child Care Aware of America. That's higher than the average cost of housing, and completely unrealistic in districts like mine where the average household income is only $87,000 per year and much lower in many parts of the district. Family child care, on the other hand, is significantly less expensive than center-based care.
In Arizona, it's about $10,000 annually per child versus $15,000 for center-based care. Doctor Freedman, can you talk about how those two types of care differ, and why a parent might choose one over the other? And why is family child care important in this sector?
Speaker 5
So as I think all the panelists have said, I think it is really important that there are a lot of choices in the childcare market for families to choose between. It is a very personal decision where you put your baby while you are at work. And what might feel right to one parent feels very different to another. And for some, the smaller size of a family child care feels much more comfortable. For others, they really like the structure of the center.
And I think it is really important that our child care policies support both, all of these different models so that parents continue to have those choices. I, you know, one of the reasons family child care, us, is because the person running it usually is doing multiple jobs. And so they're not taking a salary for themselves. So, you know, that is not necessarily a highlight of the model. And what we need to be doing is making sure that all of these different childcare settings are available for families, so they can make those decisions.
Speaker 14
Thank you. And Missus Codella Lowe, how can Congress help sustain and grow family childcare through existing programs or new federal investments?
Speaker 3
Yeah. I think that, as the panel has said today, choices are important for parents as well as affordability. Right? Both of these things go hand in hand. When any parent is looking at a center or, excuse me, an option for their child, they're looking at a lot of really important factors.
Mhmm. And, you know, affordability lives in that. The other thing that doctor Friedman just expanded on is that a lot of parents feel really excited about the opportunity to be able to go to a neighbor or go to a family child care center. And giving the flexibility and allowing for parental choice in all of our methods. Right?
Like, this mixed delivery system is so important to our ability to provide the necessary care for all Americans. What we have right now in center-based care does not fit the need. What we have right now in chat in family base doesn't fit the need. What we have in family, friend, and neighbor. All of these things together need to be a core component in thinking about choice and flexibility for parents to make the decisions that make the most sense for them.
Speaker 14
Thank you. And, you know, we know from 2023 to 2024 that the number of licensed family child care homes increased by 4.3%, again according to Child Care Aware of America. This marks the first time in several years that we have saw an upward trend in the number of licensed family child care homes. I've also heard concerns that licensing standards, including those that are meant to ensure the health and safety of all involved, negatively impact those providers and their ability to actually provide these child care services. Doctor Friedman, one more question for you.
Can you talk a little bit more about this impact? How can policymakers balance the need for health and safety without negatively impacting our child care providers?
Speaker 5
So to be clear, I do not think it is the federal regulations that are causing problems for family child care providers in places. The federal regulations very much support and promote family child care. I think states, it is always worth taking a look at regulations and making sure that they are right-sized, in particular, making sure there are not barriers to business operation. That is different than deregulating for child health and safety, which is something that should not happen. One of the conversations I had with a family child care provider as director of the office of child care is she was gonna lose her business because of HOA policies.
And that is the type of thing that I do think that states need to be taking a look at and making sure that those barriers are out of the way for family child care, so that they can operate. And with investments, supply can grow.
Speaker 14
Thank you so much. I know I'm a little over time. I really appreciate it. I just, mister chair, I would like to ask unanimous consent to enter the following Marshall Plan for Moms report into the record. It's titled, the business case for child care, how parent-focused employee value propositions help companies win the war for talent.
Speaker 15
General Lee's time has expired. Now recognize General Lee from Illinois, Congresswoman Miller, for five minutes.
Speaker 16
Thank you, chairman, and thank you to all of our witnesses for being here today. I'm so happy that I've been able to be a mom and a grandma, and I had the privilege of being able to, between my husband and me, be a caregiver for our children. And, unfortunately, this has become more of a luxury today, and I think young families are finding themselves in quite a predicament here. They have to find work outside the home to support the growing families, forcing them to secure childcare options during the day. Other families do have to make the difficult decision to forego the extra income so one parent can stay home, because childcare is simply too expensive.
In my district, the median household income is just over $70,000, and childcare costs between 8,000 and 10,000 per child. In many cases, the average income can't sustain two children in childcare. It's just not feasible. Republicans are working with President Trump to create a more affordable health child care system, specifically by creating more options for parents to use vouchers. Unfortunately, the Biden-Harris administration had a long record of discriminating against faith-based organizations.
Many child care agencies are also local, and many parents choose to send their children to these organizations because they have a personal connection. Ultimately, our goal should be to make childcare so affordable that parents don't have to decide between caring for their children or working multiple jobs. So, Missus Lowe, in 2021, your organization released a report entitled Examining the Role of Faith-Based Childcare. Could you talk more about the importance of faith-based childcare and why parents should have it as a choice?
Speaker 3
Yeah. And I think what we found is that parents use faith-based providers. Often, we know that they are part of a working, mixed delivery system. And I think that is, you know, the crux of the report shows that parents are making choices, making choices that work best for them and for their families. And, we also know that access, affordability, reliability, and high quality are all factors that parents are looking at in order to make these decisions.
And faith-based providers only add to a mixed delivery system that we know is necessary to provide the seats for the kids that need spots.
Speaker 16
Absolutely. And I'm a firm believer that competition drives quality up and prices down. So, Miss Sims, could you explain how applying this principle to childcare will benefit parents, children, and local economies?
Speaker 6
Well, I think just choice in general is always, you know, a good driver towards competition and choice because if I can't find it here, I will go look elsewhere. You know, I guess, the faith-based providers are there, family childcare providers there. Think with everyone, though, as we've talked about, it's all looking at how do we support all of these boats to float and to support them and that we're not prejudicing one over the other. And that's gonna be a variety, a variety of techniques that we look at.
Speaker 16
Right. And children are unique. Families are unique. And I think it was a shame that faith-based childcare was discriminated against. So Mayor Barton, in my district is quite rural, much like your town of Crawfordsville.
We're kind of close, actually. What's your message to policymakers who underestimate the economic consequences of ignoring rural child care access?
Speaker 4
Well, we are in a battle for population, in a battle for population to maintain our workforce that is the tax base for these rural communities, whether that's agriculture, manufacturing, or whatever it might be. And without the childcare piece, rural America starts to suffer, and we are already going through that. We have been in my community for a number of years. I think we've turned the corner, but it has a profound economic impact, and the data has shown it time and time again. You lose business, you lose industry, you lose productivity, and then ultimately you lose, you know, spending power in your community and your tax base.
And so it's a vicious cycle once you start down that path. As I said earlier, it's all about the economies of scale, and rural communities are at such a disadvantage when it comes to standing up child care providers or centers, that we really struggle.
Speaker 16
Right. And rural communities are a wonderful places to raise children. I so enjoyed your biography, and I appreciate that you're a problem solver, and you're looking outside the box, and doing great things in your community.
Speaker 17
Thank you. Good morning, and thank you to our witnesses for testifying today. Access to child care is essential for parents to get an education or to enter the workforce. The child care industry was dramatically impacted by the pandemic, as we all know. Between February and April 2020, the number of employees in child care centers abruptly dropped from just over 1,000,000 workers to around 670,000.
Democrats tried to shield the industry from the worst economic impacts, including a supplemental injection of 15,000,000,000 in discretionary dollars into the Child Care and Development Fund, and 24,000,000,000 for child care stabilization grants, which allowed child care providers to stay afloat. When we were debating the Build Back Better reconciliation package, I was someone who strongly supported the expansion of universal pre-k, and child care was central to that conversation. Addressing the high cost of child care has consistently been a top priority for me. I introduced the PROSPECT Act, which expanded child care in community colleges and brought back CPF funds to my district for child care incubators to develop and train business owners. So addressing this issue is something that I've tried to approach from every angle.
But today, I want to talk about some of those grants. According to an article published in The New Republic, the top 11 chains, almost all of which are backed by private equity or publicly traded, serve only about 12% of the 7,500,000 children who attend child care centers every day. As we know, these firms have an obligation to their stakeholders and have to generate revenue. For example, disclosures reveal that between 2012 and 2017, Kindercare, which is one example, closed 380, quote, underperforming centers to increase revenue and enrollment at its remaining centers. For this reason, I believe that additional investments in the private child care sector must come with some type of guardrails.
Doctor Freedman, why is it important that these centers, which are often labeled underperforming in terms of revenue, are located in low-income neighborhoods?
Speaker 5
So I think we are just beginning to understand what this type of for-profit program, how it is operating in various communities. Some states are trying to look at some guardrails. I think there are concerns that a program might be answering to stakeholders instead of to families, and what that might mean for the services that they are delivering. So I think states are beginning to experiment with those guardrails that you are speaking of, and I think there are important lessons to be learned there.
Speaker 17
And how does consolidation within the market impact the availability of childcare slots in these communities?
Speaker 5
I think we see quite clearly that what we need to be doing across this country in every single community is growing the supply, and anything that is reducing the supply takes us farther away from what families need.
Speaker 17
Thank you. In 2024, the Biden administration finalized a rule to update the Child Care and Development Fund, CCDF, those regulations, and support child care quality and accessibility in communities all across the country. The biggest changes in the final rule included capping family copayments at 70.7% of family income, but allowing states to eliminate copayments for more families, improving payment practices by ensuring providers are paid upfront, requiring states and territories to provide at least some child care services through grants or contracts, and streamlining family eligibility. Doctor Freeman, what would repealing the 2024 rule mean for most child care operations during this crisis?
Speaker 5
So repealing that rule is going to mean less stable child care operations, which is going to mean a less supply, which means less availability for child care. It's also gonna mean increased prices for the parents. It would be a tragic mistake to repeal that rule.
Speaker 17
Thank you. I know we've heard a lot about parents having a choice in childcare, and I think that's absolutely what we want. But I know personally that for many of those parents, that choice comes down to quality and affordability. And that is the biggest thing that we need to address. I think that availability of more locations, whether they be private centers, community based, family based, whatever, if there are available slots and that they have the ability to pay for that care because no parent wants to think that they are compromising care for their child because they had to opt for something just because of the cost.
And with that, I yield back.
Speaker 1
The chairman of the full committee, Representative Wahlberg of Michigan, is recognized.
Speaker 8
Thank you, Mister Chair, and thanks to the panel for being here. This is a crucial topic. This is not the same issue as when I was a boy back in the last century. This is something that is extremely important for all that we do in education, as well as in the workforce. And so thank you for your written testimonies that were very helpful.
Missus, Codella Lowe, you know, in times now that we, you know, are seriously looking here in this congress with the debt, increasing debt, deficits that are going on, it forced us to consider everything in light of that. So I guess I'd ask the question, how can taxpayer funds at the federal level be used more effectively, not just more extensively, to promote innovative child care solutions?
Speaker 3
Yeah. And thank you for the question. I think that one thing that I think every single panelist stated and every member stated was how important childcare is to our economic infrastructure. And thinking about childcare is a real economic mobility. And, you know, of course, any investment of funds requires the need for us to think about these efficiently and think about how we can create innovative solutions.
I think, you know, even sitting next to Mayor Barton here who has looked at a problem in his city and figured out a way to braid funding both from the federal, from the state, and from the local level to create a sustainable solution for his community and to really meet the need of his workforce is a great example, and one that is unique to Crawfordsville, is not unique to the United States. There are so many examples in states like Michigan, the Tri Share program that exists where they are braiding, they are finding opportunities to braid funding and create not only access, but affordability for kids.
Speaker 8
Okay. I appreciate that. Miss Hartman Sims, do you believe the current child care landscape offers sufficient room for parental choice, which is big in my book? And if not, how can policy improve that in the area of parental choice?
Speaker 6
At the federal level, the child care and a moment block grant is incredibly inclusive of a variety of providers, as I mentioned earlier, including faith-based providers who do not have to check their faith at the door. I think the area we need to be most cautious of on limiting choice, and this is really a state issue. The expansion of universal pre-k, which can sound lovely in concept. What a lot of the states are doing is limiting choice. They are pulling threes and fours out of this mixed delivery system, that is inclusive of family child care and homes and faith-based providers and all of that, and pulling them into a public school setting without the option of that parent having that choice.
The other issue with that, with universal pre-k, is by pulling threes and fours out of community settings, we are disrupting and actually making infant and toddler care more expensive for parents versus less expensive.
Speaker 8
Okay. Okay. Thank you. Mayor Barton, we'll move on from our discussion about motocross of nations and get on to this issue here, though I'd love to discuss more. Crawfordsville has successfully collaborated with philanthropy, local and state government resources, and businesses as well.
Very creative. How are you able to solicit this type of multifaceted commitment?
Speaker 4
You know, the first step was getting everyone to understand that this was a significant problem, and the data showed that. And once that data was available, I think we had everyone's attention. You know, the second piece was, you know, for everyone to understand, they had a stake in this, and they had something to lose if we don't solve this. Businesses had something to lose. Philanthropy, you know, if you don't spend on early childhood education, you know, spends many times more dollars down the road trying to solve problems with our young people.
So really convincing everybody, that they had a stake in this and that, you know, there was a cost for them if we didn't do something, and that they would be money ahead to address this early. So I think it's putting all that together and getting that buy-in. And then, ultimately, you know, I think what we've done so well in our community is we come together collaboratively. It's bipartisan. It reaches across every sector of our community to really address these things.
And as I tell everybody when we get involved in this, you absolutely have to check your ego at the door. And we require that, and we work under that concept, and it gets us there.
Speaker 1
The ranking member of the full committee, Representative Scott. Oh, well, I stand corrected. We're gonna go to Representative Thompson of Pennsylvania, who will now have five minutes.
Speaker 15
Alright, chairman. Thank you, and thank you, you and a ranking member, for this hearing. Thanks to all the witnesses who are here. Incredibly important topic. Mayor Barton, proud to welcome a fellow former firefighter to the dais.
I'm not surprised at your leadership skills. Having that shared value and experience. The rural areas share a level playing field with urban areas in terms of addressing the childcare needs. What are some of the pronounced differences?
Speaker 4
Well, I can obviously, can't speak to the urban, you know, situation, but I will tell you from the rural perspective. We have a couple of challenges, and the first I touched on earlier, which is the economy of scale. As I mentioned in my written testimony, I initially thought this would be a pretty easy problem to solve. We'll just recruit child care providers to come to our community, and you quickly discover the numbers just aren't there. So that's probably the big thing that we face.
I think the other reality is that for most rural communities, we don't have the resources to pursue all of the funding options. And we've talked a lot about grant funding and different types of funding. You have to have the human resources and the time and the ability to seek that out and successfully apply and then administer it if you're successful. So rural communities don't always have that. They often just leave it alone, and they don't even pursue those funding options.
So both of those things work really against us in the rural communities. And I think to a large extent we feel like we have to solve this alone because we're kinda forgotten out there.
Speaker 15
Well, as someone who represents a third of the landmass of Pennsylvania, very rural counties, 18 counties, I mean, I think transportation for parents to get to childcare is an issue as well. Is the childcare the direction of where the work setting is? Just the math of various rural areas. You know, is there enough, I mean, there's kids that we need childcare for, but is there enough kids for someone in order to be able to form a to successfully and financially, you know, put together a childcare operation that works as well? I think those are also things in very rural areas that we that we obviously face as well.
Can you speak to the link between child care access and population retention or growth in rural communities like yours? You did that a little bit. If you wanna just expound on that a little bit because we, I mean, we all, you know, we're always those of us from rural America, we wanna be able to grow our population, right, to stop that export of young people. And yeah. And what role does childcare play in that?
Speaker 4
Well, you know, I've said it several times today, but we are in a battle for the population. And what we've seen in Indiana, at least, is we see people moving from the more rural areas to the urban areas. And there are several factors, I think, involved in their decision to do so. But the reality is we're an industrial community. We're a manufacturing community.
And to meet the workforce needs of my current employers, I have to grow the population at least modestly. And if I'm gonna meet the needs of future employers, I have to add even additional growth there. So I need to do two things. I need to attract new residents, and most importantly, I need to retain the next generation. We spend a lot of time in our community talking about that.
And if you want 20-year-olds starting careers and starting families in your community, childcare is absolutely at the top of the list of needs in your community.
Speaker 15
Yeah. Child care, rural broadband, housing. I mean, because you need that workforce to be able to grow businesses and attract new ones. Miss Sims, what are some examples where federal rules or mandates have actually made it harder for families to access care, particularly for rural families?
Speaker 6
Either within, like, the programs that are under your committee's purview, I don't think there are. As others have said, the CCDBG program is predominantly a state administered and locally implemented program. There are things in rural America that have been problematic. It is my understanding, I am not an ag expert, but there are some rules within USDA home loans, which is a predominant lender of home lending in rural America, that you're not allowed to have a business inside, have a USA rural home, or mortgage if you're operating a business within that home, which if you're a family child care home, you're invariably operating a business. And there has been legislation in past congresses introduced to have USAA undo that rule.
I know that's not this committee's jurisdiction, but I definitely think I've heard that in rural America that is something that needs to be looked at.
Speaker 15
Well, as chairman of the House Agriculture Committee, I will take that back and look at that.
Speaker 15
There are a few archaic things I have found similar to that that we're trying to fix with this next farm bill. Chairman, thank you so much.
Speaker 18
Thank you, Mr. Chairman. I am holding this hearing. I wanna thank a witness for coming to testify on how access to affordable childcare is giving parents the flexibility they need to participate in the workforce. For several years, I've been a champion of the child care and development block grant and the flexibility that it provides. I look forward to speaking to our witnesses and understanding how to better leverage our policy and support our parents and children.
This is Cotehel Lowe. We have acknowledged a nationwide deficit in the workforce participation. Based on your research, what's at stake for local economies and workforce participation when childcare is unavailable or unaffordable? I'm sure you've probably answered that already, but I wouldn't mind if you just extend yourself.
Speaker 3
No. Absolutely. I think, you know, there is a lot at stake when we don't have access to affordable, reliable, high-quality child care. But, you know, the things that come to mind are reduction in workforce participation, loss of income, business disruptions. And I think this is something that has really rippled through the system in the last couple of years.
Certainly, previous to my role at BPC, I worked at the US Chamber of Commerce Foundation and spent a lot of time on child care issues there. And previous to the pandemic, you didn't hear a lot of business, you know, leaders talk about childcare as an issue that they were thinking about. And then all of a sudden, the pandemic hit, and we were talking about childcare often. And so business disruptions are real, decreased tax revenue in every single city, but certainly also in states. And then, I think as Mayor Barton has also alluded to,
Speaker 18
Okay. Thank you so much. Mayor Barton, what is, what was your catalyst for engaging businesses to help solve the childcare problem across Crawfordville?
Speaker 4
Well, they were the first to illuminate the problem for us. They were the first to bring this to our attention. We were hearing this every year in our meetings with them. And then, you know, as the data became available, that I think was able to really bring it to the forefront of the conversation. And then really bringing them in as part of the solution was centered on those earlier conversations about the problem.
So it's much easier to walk in the door with a proposed solution and ask for assistance when they have been telling you year after year that a problem exists. So it's really through what I call our business retention and expansion program, which we focus on, you know, a great deal in our community. We visit every business annually. We visit our corporate headquarters, which are generally located in other cities, every two or three years. And it's through those candid conversations where they really share what's working in our community and what's not working in our community, and where they're seeing issues, and that really opened the door for this discussion and eventual solution.
Speaker 18
Yeah. This is something nationwide we're seeing, this workforce deficit. So this is such a great conversation to have. Miss Sims, how can federal child care policy ensure parental choice without picking winners or losing losers among providers?
Speaker 6
I'm sure. So I think the current, Chakra Envelopment Block Grant program, the federal tax credits, as they are currently done, do not discriminate based on type of provider. Faith-based, for-profit, nonprofit, you know, family, center-based. I think, you know, places you want to be concerned, and I, you know, there's I can misfrievement and I've known each other for a number of years. There are times that we're gonna agree, and a lot of times, sometimes we don't, you know, we would disagree. I am concerned about a provision that was included in the CCDF regulations requiring states to use some portion on grants or contracts.
If you know, I understand trying to deal with the lack of care in other, you know, in some areas. But when government is going into a grant or contract versus a voucher certificate to parents, it inevitably tends to prioritize one type of private provider over another. And I think, you know, since CCDBG has been in existence, it has always been about parent choice. And I am concerned about that provision in the current final regulations that I believe will limit choice, not increase choice.
Speaker 18
Okay. We'll make sure we take a good look at that, because choice is really what it's all about, parents' choice. So thank you so much. What a timely conversation, and looking forward to being part of the solution. So thank you so much.
Chairman, I yield back.
Speaker 11
Thank you, Mr. Chairman. Mayor Barton, you had a lot of success in expanding capacity. You said a 30% increase. I think one of the successes was Camp Milligan. Can you tell us a little bit about that, the age of the children, how many children were in the program, and how much it costs?
Speaker 4
Yes. So Camp Milligan is a summer day camp, and one of the things that we had noticed is that we were dealing with the early learning piece of this, the preschool type, you know, piece of this. And we really realized at some point that we had a big issue with school-aged children in the summer and on breaks. And so we started Camp Milligan to help address that. We've also helped support other programs in our community.
And you're talking about those children that, you know, aren't able to care for themselves safely, but still need care in the summer and are out of school. Camp Milligan is a combination, funded by the city. Our Montgomery County Community Foundation, we operate it through our parks and rec department. They have since expanded. We have a program over winter break, over Christmas break, to help with childcare then for school-aged children.
So it's really pulling all that together to create that, while in addition, we are supporting other programs such as the Boys and Girls Club.
Speaker 4
I don't have those numbers in front of me. I would say, you know, probably in the neighborhood of $10,000 for the summer. It's pretty affordable. We're paying the staff.
Speaker 4
I don't have the numbers in front of me. I'm gonna guess probably about 40 students.
Speaker 4
What we've done is participate in the hiring of the early learning director to support the other programs. So that director is out there every day helping them with the business model, with personnel matters, with regulatory issues, and so on. We participate in that through the Montgomery County Community Foundation. So no direct funding has gone to any other providers, just channeled through the foundation.
Speaker 11
Doctor Freeman, we've heard a lot about the faith-based organizations. From my understanding, that faith-based providers have always been a major participant in child care programs, including Head Start and CCDDBG. Is that true?
Speaker 11
So when you talk about them not participating or being barred, that's just not true?
Speaker 11
Okay. Can you tell us why subsidies are necessary for childcare to be affordable?
Speaker 5
Subsidies are necessary because the math does not work in childcare. Parents cannot cover what providers actually need to pay their staff. And so if there is not child care assistance, we are never gonna have the child care we need in this country.
Speaker 11
And if for infants, the ratio of teachers to students is four to one. So, essentially, each student has to support a fourth of the teacher's salary before you get to the other expenses.
Speaker 5
That's right. So states set teacher-child ratios, not the federal government. Many states set it at one to four, and infant care is more expensive because, inherently, it is more labor-intensive.
Speaker 11
We've heard a lot about deregulation. What happens to the safety of childcare if deregulated?
Speaker 5
So health and safety regulations are extremely important. Children need a lot of care and attention, and parents do not want their children warehoused by untrained individuals.
Speaker 11
And what happens if you don't have those regulations, what happens to the children?
Speaker 1
Thank you very much. The ranking member is now recognized for our closing statement.
Speaker 2
Thank you, mister chairman, and thank you to the witnesses. I think this is an excellent discussion and a place where we all acknowledge that there is a challenge. We all agree, mister chairman, and colleagues that parental choice is important. There is no question here that Democrats are pro-choice. As we heard today, families across the country are struggling to find high-quality, affordable childcare.
This is not a new challenge or a new problem. Think back to the pandemic, bring back a lot of bad memories. But during the first eight months of the pandemic alone, 166,000 child care jobs were simply lost across the country. Child care employment is now slightly above pre-pandemic levels, which is great, but we know that the child care crisis still remains as families struggle to find and afford care. It's acutely felt by families and is growing more urgent by the day.
And it's not just families, as we heard in the testimony. Not just families feeling the impact, as childcare workers who are overwhelmingly women, women of color, and immigrants, they make poverty-level wages. And the US economy loses $122,000,000,000 every year as a direct result of the scarcity of affordable child care. And as Doctor Freedman testified, there simply is no market solution. We know that without robust federal investment, the cost of care will keep rising, and workers who provide the essential care will continue to be among the lowest-paid workers.
These are the same caregivers who help shape the future of our children. They deserve better, and until wages are increased, the recruitment and retention challenges will remain. Unfortunately, instead of addressing this crisis directly, many congressional Republican proposals, combined with the harmful policies from the Trump administration, are going to make things worse. Since the beginning of the year, Head Start in particular has faced numerous challenges, from being unable to use federal funds, the closure of five of the 12 Head Start regional offices that provide crucial support to programs across the country. These actions have made life more challenging for families with young children.
And I note that anybody who's ever been in a Head Start program knows that they also involve families. It is a very good investment. I also wanna note Missus Codela Lowe recommended improving data collection. I think that would be wonderful, but, unfortunately, the Trump administration and the Department of Labor are trying to eliminate completely the Women's Bureau at the Department of Labor where they do the data collection. The National Database of Child Care Prices, that is critical information that we need.
So some colleagues have turned to deregulation as a solution. As we just heard, that is not an answer. Plus, importantly, research shows that there is no correlation between state regulation and child-care supply. We even have bipartisan support for strong standards in child-care settings. I'm a mom.
This is important. The last Child Care and Development Block Grant reauthorization included updated health and safety standards for child care centers. We need to continue focusing on what we know works. Increasing investment in child care is the key to building quality, a child care supply, and improving affordability. We should take action.
I'm glad that we talked about this, but we should take action about the need for greater investments. For years, we've had bipartisan support for funding the child care and development block grant at 12,400,000,000. Yet Congress has not funded the program at this level. Congress must also pass legislation, for example, the Child Care for Working Families Act, that would cap child care costs for working families at 7% of income and make the investments we need. I also want to note that there are other policies that would address this issue, like joining the rest of the world and offering paid family leave.
When we hear the statistics about the ink, the additional cost for infant care, and look at the numbers. I don't have the exact numbers, but the number of women who go back to work within weeks of having a child, not because they want to or feel up to it, but because they have to. The rest of the world offers paid family leave. That makes a tremendous difference. Also, I have a bill called build housing with care act that would give grants to affordable housing so we could build the child care center at the affordable housing, again, reducing costs and stress for families.
So there's a lot of policies we could look at, to address this challenge. We have the opportunity, and we have the responsibility to act for families, for children, for workers, and for the economy. The time to invest in childcare is now. Thank you again for the excellent discussion, and I yield back.
Speaker 1
Compelling testimony. I think that we can all agree that the ability to start your family and pursue your career on your own terms is central to the American dream. But because of the cost of childcare and limited accessibility, too many parents are faced with wrenching dilemmas. And to the extent that we can find solutions that will ease those dilemmas, will therefore make the American dream more of a reality for more families. And at the same time, as we've heard throughout today's testimony, this is an issue that is very much connected to the success of local economies and our broader national economy.
Miss, missus, Codella Lowe used the term essential infrastructure to describe childcare, which at first glance, you don't really think of childcare the same way you think about roads or power lines or something like that. But I think that it actually is an apt term because, it's just as foundational, in a sense, to being able to have a functioning and flourishing economy. So I think a few takeaways from today's hearing based on all the questions and the testimony from the witnesses are, number one, that choice and flexibility must remain the central pillars of the system, this mixed delivery model that Ms. Sims talked about. And in a similar vein, federal support ought to give local communities and governments flexibility in terms of what form that support takes.
As mayor Barton has testified, for example, rural community like his may not have the same economy of scale to support the same options as an urban community. We also discussed the workforce challenges that are faced by child care providers, and there may be room here for things like licensing reform, credentialing reform. And, certainly, with economic dislocations affecting some sectors, in the years ahead, I think there will be an opportunity to utilize job retraining as well, to assist with recruitment for that sector. I think that we also have come to some agreement that the solutions here really need to be multifaceted, and draw upon support from local communities, from state governments, from philanthropy, and from the business community. I think in many cases, the business community is very much interested in collaborating, and finding solutions in order to allow their employees to balance work and family life.
And then finally, I think it's really important that this be an issue we approach from a bipartisan perspective. This affects millions of families. It doesn't matter, their political views, and I think there is really a lot of common ground here. So I look forward to working with my colleagues on both sides of the aisle to find solutions, the rest of this congress. Thanks very much.
With there being no further business, the subcommittee stands adjourned.
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