Will the sequester yank away parents’ child care?
On March 1, mandatory federal budget cuts take effect that were supposed to be so painful that Congress would take action to avoid them.
President Barack Obama has urged lawmakers to avoid the cuts, known as the sequester, and has been citing dire predictions about who might be hurt by the across-the-board reductions in a broad range of federal programs.
On Feb. 19, 2013, he warned that if Congress didn’t take action, "tens of thousands of parents will have to scramble to find child care for their kids."
The New York Times reported the next day that "day care centers are almost certainly not going to be padlocked on March 1."
But what will happen? And will it send parents scrambling?
Child care subsidies and Head Start
At least two federal programs that affect parents’ child care options face cuts under the sequester.
First, let’s recap how the sequester works. Unless a deal is struck, most types of federal spending must be cut by a uniform amount — tentatively 7.9 percent for most types of defense discretionary funding and 5.3 percent for nondefense discretionary funding. (Certain programs are shielded from sequestration cuts entirely, including Social Security, federal retirement payments, veterans compensation, Medicaid, Pell Grants, food stamps, Supplemental Security Income, and veteran's health programs. Medicare would be cut by 2 percent.)
The uniform cuts must be applied to any "program, project or activity" that isn’t otherwise exempted. However, within a given program, officials don’t have to cut every line item equally. They have discretion to move money around within a program.
The two big federal programs affecting child care are the Child Care Development Block Fund, which helps states provide child care subsidies for low-income working parents that affect more than 1.6 million kids. The second is early education program Head Start, which awards grants to public and private agencies to increase kids’ "school readiness," such as with whole or half-day programs in schools and centers. (It also includes programs that wouldn’t offset parents’ child care needs.) Head Start says it serves more than a million kids a year.
All of Head Start’s funding is open to sequester, according to the White House’s Office of Management and Budget. About half of the Child Care Development Block Fund’s program’s federal funding is mandatory — and therefore exempt from the sequester — but the other half faces cuts.
Both programs are organized under the Health and Human Services Department, which estimates that "up to 70,000 children" would lose access to Head Start and Early Head Start programs, with some centers closing their programs early this year or delaying their start in the fall. Meanwhile, budget cuts would leave "up to 30,000 children" without child care services, HHS Secretary Kathleen Sebelius wrote.
House Democrats and the White House also rely on the HHS estimates.
But the precise impact and timing of the cuts is difficult to quantify. Why? Because the programs are designed to give considerable control over spending to states and other public and private agencies.
Head Start’s rolling grant process means cuts will need to be made over the next seven months, the remainder of the current fiscal year, said Ted Froats, a spokesman for HHS’ Administration for Children and Families. But with the child care grant program, while cuts also take place over seven months, it’s harder to say when the impact may be felt.
The department reached its 30,000 estimate by reducing the amount of funding available for the year according to the rules of the sequester and comparing that with the average cost per child served, Froats said.
But states have "broad flexibility" in administering the program, which is also partly funded by the states themselves and by moving money from other federal pots, such as Temporary Assistance for Needy Families.
Parents qualify for subsidies on a sliding scale, with some paying co-pays — and rules vary state by state.
States might respond to federal cuts in a variety of ways, such as:
• Imposing stricter eligibility criteria.
• Freezing new enrollments.
• Reducing subsidy amounts.
• Increasing parental co-payment amounts.
So it’s possible currently enrolled parents may keep their care, but with a lower subsidy or a higher co-pay.
Still, it’s important to note that states are already stretched. Nearly half had waiting lists or stopped taking new families in 2012, according to a report by the Women's National Law Center, which advocates for affordable child care. Meanwhile, reimbursement amounts have lagged. Parents may not be able to keep up with yet another cut.
And the idea that states might be able to move money around and still support the same number of kids doesn’t hold up, said Karen Schulman, a senior policy analyst who co-authored the report.
"They wouldn't have waiting lists if they had other ways around," she said. "... To me, that suggests they've already looked at the 'fat.'"
(The libertarian Cato Institute in 2010 noted a 2004 report from Congress’ Government Accountability Office found HHS didn't do a sufficient job overseeing state management of the program, leading to waste and abuse. But GAO’s recommendations have since been implemented.)
The president warned that if Congress didn’t take action, "tens of thousands of parents will have to scramble to find child care for their kids."
The sequester does hit two big programs that affect parents’ child care or their need for it — a subsidy program and the early childhood education program Head Start. The government estimates up to 100,000 kids would be affected. But neither the White House nor HHS has provided sufficient evidence to establish the number of kids whose parents would need to find other child care.
Parents might be able to keep their subsidized child care with lower subsidies or higher co-pays. In the case of Head Start, it’s not clear how many of the affected kids would lose spots in the types of programs that might leave their parents in a child-care lurch. Between the two, "tens of thousands" is plausible, but unproven. We rate the claim Half True.