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Child Care in the December 2020 COVID-19 Relief Package

In December 2020, Congress approved its second largest COVID-19 relief package to address the ongoing economic and societal impacts of the pandemic. The legislation included $10 billion through the Child Care and Development Block Grant (CCDBG) to support the child care needs of working families and stabilize child care providers. Congress recognized the importance of offering this much needed aid through CCDBG, in a flexible manner, much in the way the CARES Act emergency funds were allocated early in 2020. The flexible CCDBG funding included in the CARES Act proved successful over the last nine months, and the continuation of this structure will provide a much-needed lifeline to struggling child care providers and working families, ultimately helping our nation on its path to recovery in 2021.

In March 2020, the CARES Act was signed into law, which included $3.5 billion in emergency funding through CCDBG to help states provide child care assistance to frontline workers and to stabilize the child care market. Congress included flexibilities to regular CCDBG requirements to ensure states could distribute funds to families and programs in greatest need in an efficient and effective manner, and to meet the unique circumstances of the pandemic. These provisions are described in greater detail here.

The December relief and recovery legislation provided $10 billion through CCDBG to supplement—not supplant—state general revenue funds used to provide child care assistance to low-income working families. While the legislation retained most of the flexibilities within the CARES Act, there were several new provisions that clarified congressional intent for how the supplemental funds could be spent.

New language allows states to use the $10 billion in emergency funds to:

  • Support the stability of the child care sector, including by requiring states to widely publicize the availability of funding available for such purposes and provide technical assistance to help providers apply for funding.
  • Implement enrollment and eligibility policies that support fixed costs of providing child care, including by delinking reimbursement rates from child absences or provider closures.
  • Provide families relief from copayments and tuition payments, including by paying these portions directly to child care providers.
  • Cover providers’ fixed costs and increased operating expenses.
  • Provide technical assistance to providers regarding the safe provision of child care services while there is community transition of COVID-19.

Additionally, the legislation established reporting requirements for how states spend the $10 billion. The following requirements are associated with the funds provided in December (not the CARES Act funding):

  • States, territories, and tribes receiving funds must submit a report to the Secretary of Health and Human Services by February 25, 2021, describing how their funds will be spent, and no later than October 31, 2022, submit a report describing how the funds were spent.
  • The Secretary shall submit to Congress a report summarizing the information submitted above. These reports are due March 27, 2021, and December 21, 2022, respectively.

Also, of note, the legislation removed a requirement that accompanied the CARES Act resources, which specified the funds would be available through September 30, 2021 and must be obligated by states within three fiscal years. Lastly, HHS may reserve no more than $15 million of the $10 billion for administrative expenses.

By distributing the supplemental funding through CCDBG, Congress ensured this critical aid would be allocated quickly and efficiently, without the need to set up a lengthy new grant process at the federal level, which would delay the funds getting to states and programs at a time when they need them immediately. Further, the provisions established within the CARES Act are critical for allowing states to spend their supplemental CCDBG funds in a way that will help child care providers stay in business. Without such flexibilities to the CCDBG Act, states would not be able to efficiently address the distinct needs of child care providers and working parents during the COVID-19 pandemic.

BPC will continue tracking how states allocate their emergency CCDBG funds throughout the remainder of the pandemic.

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