Important child care implications of budget choices

Even in difficult fiscal times with hard budget decisions, we must consider the societal implications of these decisions.

Anna Sewell
Anna Sewell

Data consistently show that investing in child care benefits society by providing early education for children and relieving working parents of serious financial strains of child care costs.

This frees up household income, which can help to stimulate the economy through spending and investment. Also, the additional time parents are able to spend working increases the productivity of our nation’s workforce, as well as individuals’ income.

This critical support to families and the economy is part of assistance that could be dropped in the coming days for over 300,000 children and their families under HR1, which would make changes in programs under a continuing resolution that expires next Friday, March 4.

HR1 would cut funds for federal programs by over $60 billion. More specifically, the bill would cut $1 billion from Head Start and $39 million from the Child Care and Development Block Grant, which funds Iowa’s Child Care Assistance program.

For Head Start, the cuts would close 16,000 classrooms and cut jobs for 55,000 teachers, assistants and related staff. This would be the largest cut in Head Start’s 45-year history.

Alternative means for lessening the deficit could be for Congress to pursue a balanced approach of spending cuts and necessary revenue increases, while continuing to make investments in education.

Posted by Anna Sewell, IPP intern

But what have you done for me lately?

An astounding number of people have no idea what their government does for them — even as they benefit from government programs.

Source: Suzanne Mettler, "Reconstituting the Submerged State: The Challenges of Social Policy Reform in the Obama Era," via Sara Robinson, Campaign for America's Future

This NYTimes blog post is interesting enough, but what really caught my attention was a table from a recent academic political science paper that has made its way from liberal bloggers to a former Reagan economic advisor.

An astounding number of people have no idea what their government does for them, even as they benefit from government programs.

 

Posted by Andrew Cannon, Research Associate

Change Iowa’s child care landscape

Child care assistance — a smart investment for Iowa’s economy and a boost for working families.

Lily French
Lily French

In the economic crisis Iowa’s families are facing, child care assistance can help. However, Iowa’s current program does not help families enough. We have one of the highest rates of working parents in the country — and also one of the most restrictive assistance policies. We are ranked 47th in country because our income eligibility limits are so low. As a result, too few low-income families are receiving support that will help them keep working.

Our new study, Strengthening Child Care Assistance in Iowa, found:

  • • Resources used to provide child care assistance returns money to the state budget.
  • • With program improvements where Iowa has some current weaknesses, it could be self-supporting or actually generate revenue in the future.

Two major weaknesses that could be addressed:

  • • We currently reach too few working families who are struggling with child care costs (they are facing costs for child care with is higher than a year’s tuition at a regent university).
  • • The current quality of subsidized care is lower than care for children without subsidies. We would generate more money back to the state budget and potentially make money for the state by improving the quality of care that subsidized children receive.

Regarding the state’s fiscal situation:

  • • We did not make these program investments three years ago when the economy was better — we can’t count on it happening once things are better again, maybe three years from now.
  • • Our current fiscal situation demands that we keep Iowans working and make smart investments with state dollars. Child care assistance does both.
  • • Right now we have federal stimulus targeted for child care improvements and expansions. This is an opportunity for Iowa.

If Iowa policy makers seriously address the facts noted and challenges suggested by our report, they could change the landscape of child care in Iowa. This would be a big boost to working families who are struggling to get by.

Posted by Lily French, IPP Research Associate

Federal stimulus impacts on Iowa

Here is a look at some of the impacts of the American Recovery & Reinvestment Act in Iowa:

FMAP (Medicaid percentage increase) FY2009-11 — $550.0 million

State Fiscal Stabilization (Flexible block grant) — $ 86.0 million

Education/ Child Care:

State Fiscal Stabilization fund (education) FY2009-10$386.4 million

Title 1 (supplemental support) — $65.3 million

IDEA (special education state grants)—$120.9 million

Child Care & Development Block Grant FY2009-10 — $18.1 million

Child Support FY2009-10 — $27.2 million

Unemployment Insurance (UI):

UI Benefit Increase ($25/week) — 212,422 recipients

UI Emergency Extension to 12/09 — 27,600 new beneficiaries

Employment Services FY09:

Youth Services — $5.2 million

Dislocated Workers — $6.3 million

Adult Activities — $1.6 million

Making Work Pay Credit — 1,110,000 taxpayers

Food Stamps FY2009-13:

Benefit Increase — $161 million and 279,000 recipients

Administration — $2.7 million

Child Tax Credit (tax year 2009 — lowers threshold to make credit available to families at $3,000 earnings):

Number helped lowering $8,500 threshold — 133,000

Number helped lowering $12,550 threshold — 156,000

Emergency Shelter Grant Pgm FY091 Add’l Funds — $16.8 million and 4,500 households