A new Biden administration order will cap child care costs for numerous low-income Americans.
According to the White House, the Biden administration issued a new rule to cap child care costs for nearly 100,000 families participating in the Child Care and Development Block Grant program.
The new rule goes into effect at the end of April.
The program is intended to help low-income families manage the cost of child care, but in 32 states, the program does not have a cap on child care costs. In those states, some families spend up to 27% of their income on child care costs.
The White House says the new rules will cap child care costs to 7% of a family's household income for those enrolled in the Child Care and Development Block Grant. As of November 2022, 1.3 million American children were in the program.
The Biden administration says this new rule will save affected families an average of $200 a month.
“President Biden and I believe that every family in our nation should be able to access affordable child care,” said Vice President Kamala Harris. “Today, we are taking another important step forward by lowering the cost of child care for more than 100,000 working families that receive federal child care assistance. President Biden and I will continue fighting to cap child care costs at $10 a day for millions of American families and make preschool free for all four-year-olds as we once again call on Congress to get it done.”
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According to the Annie E. Casey Foundation,the average cost of child care in 2021 was over $10,000 per child. For couples, child care could cost over 10% of a family's household income. For single parents, child care could take 35% of a person's income.
The Annie E. Casey Foundation said in a 2023 report that not enough eligible families are enrolled in the government program.
"Governments do little to help families afford child care," the report read. "The main federal mechanism for subsidizing care, the Child Care and Development Block Grant, partially offsets costs for only 1.3 million of the more than 12 million kids in child care. These payments also are difficult and time-consuming to access for child care businesses and for families: Of children eligible for subsidies under federal rules, only one in six receives them, and research indicates providers serving predominantly Black communities face disparities in subsidy amounts."
Although the Child Care and Development Block Grant is federally funded, it is up to states to implement eligibility criteria and administer payments.
The Biden administration also said it will begin requiring states to pay providers on time. Federal officials say 4% of home-based Child Care and Development Block Grant providers and 11% of center-based providers are paid on time.
