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Early Childhood Care and Education Programs: Background and Funding

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. Early Childhood Care and Education Programs: Background and Funding Karen E. Lynch AnalystSpecialist in Social Policy Gail McCallion Specialist in Social Policy March 18, 2010January 9, 2013 Congressional Research Service 7-5700 www.crs.gov R40212 CRS Report for Congress Prepared for Members and Committees of Congress . Early Childhood Care and Education Programs: Background and Funding Summary Federal support for child care and education comes in many forms, ranging from grant programs to tax provisions. Some programs serve as specifically dedicated funding sources for child care services (e.g., the Child Care and Development Block Grant, or CCDBG) or education programs (e.g., the Preschool Grants Program and Infants and Toddlers Program funded under the Individuals with Disabilities Education Act, or IDEA). For other programs (e.g., Temporary Assistance for Needy Families, or TANF), child care is just one of many purposes for which funds may be used. In many cases, federal programs target low-income families in need of child care, but in the case of certain tax provisions, the benefits reach middle- and upper-income families as well. This This report provides an overview ofa funding overview and brief background information on federal child care, early education, and related programs, and their current funding statuses (and tax provisions). The report begins with an update on funding developments for FY2013 (including congressional actions on annual and supplemental appropriations, possible sequestration, and the President’s budget request) and a summary of final funding levels for FY2012. The report concludes with a six-year funding history and brief descriptions for each of the early childhood programs and tax provisions discussed throughout. Funding for many child care, early education, and related programs is provided each year as part of the annual appropriations process for the Departments of Health and Human Services (HHS), and Education (ED). This report briefly summarizes funding requests for a selection of early childhood care and education programs in the Obama Administration’s FY2011 President’s Budget, which was released on February 1, 2010. In addition, this report reviews funding developments in FY2010 and provides a six-year funding history for select early childhood care and education programs and tax provisions that are discussed throughout this report and Education (ED). (Note that certain early childhood programs and tax provisions receive funding separate from the annual appropriations process.) For FY2013, funding for annually appropriated programs has been provided—through March 27, 2013—by a government-wide continuing resolution (P.L. 112-175), which generally maintains funding for discretionary programs at their FY2012 rates, plus 0.612%. For FY2012, funding for most of these programs was included in the Consolidated Appropriations Act, 2012 (P.L. 112-74). Compared to FY2011, the FY2012 appropriations law provided increases for some early childhood programs, such as the discretionary CCDBG, Head Start, and IDEA Grants for Infants and Families. Several early childhood care and education programs have funding authorizations that have already expired or are due to expire soon. The Child Care and Development Block Grant Act, for instance, expired in FY2002. However, itthe discretionary CCDBG has continued to be funded through appropriations legislation. Authorization through annual appropriations laws. The authorization for many programs underin the No Child Left Behind Act expired at the end of FY2008, though they have alsobut these programs have likewise continued to receive funding. Head Start, however, was reauthorized by the 110th Congress in legislation that was signed into law (P.L. 110-134) by the President on December 12, 2007 funding. Mandatory child care and basic TANF grants are also due for reauthorization in the 113th Congress, but have been temporarily extended through March 2013 by P.L. 112-175. Congressional Research Service . Early Childhood Care and Education Programs: Background and Funding Contents Introduction .................................................................................................................................1 FY2011 President’s Budget ..... 1 FY2013 Funding ...................................................................................................................1 FY2010 Funding Developments........... 1 Proposed Supplemental Appropriations .................................................................................... 1 Continuing Resolution ............................................................................................................... 2 Preliminary Congressional Action on Full-Year Appropriations ............................................... 2 Possible FY2013 Sequestration ................................................................................................. 2 FY2013 President’s Budget ....................................................................................................... 3 FY2012 Funding .............................................................................................................................. 5 FY2012 Appropriations ............................................................................................................. 5 FY2012 President’s Budget ...................3 FY2010 Appropriations.........................................................................................................3 FY2010 Budget Resolution ...................................................................................................4 Obama Administration FY2010 Budget.................................................................................4................. 6 Overview of Federal Early Childhood Care and Education Programs and Related Tax Provisions ..................................................................................................................................... 7 Current Programs ..................................................................................................................9... 10 Child Care and Development Block Grant (CCDBG) ......................................................9 10 Temporary Assistance for Needy Families (TANF) .......................................................... 11 Child and Adult Care Food Program (CACFP) ................................................................. 1112 Social Services Block Grant (SSBG) .............................................................................. 12.. 13 Head Start ...................................................................................................................... 13 Elementary and Secondary Education Act (ESEA) Title I, Part A.... 13 Maternal, Infant, and Early Childhood Home Visiting Program.................................... 13 The William F. Goodling Even Start Family Literacy Programs (Even Start) ................. 14... 14 Elementary and Secondary Education Act (ESEA) Title I, Part A .................................... 15 Individuals with Disabilities Education Act (IDEA) Programs ....................................... 14. 15 Child Care Access Means Parents in School (CAMPIS) .................................................. 16 Promise Neighborhoods .................................................................................................... 16 Race to the Top .................................................................................................................. 17 15 Tax Provisions ......................................................................................................................... 17 16 Dependent Care Tax Credit (DCTC) ................................................................................ 16. 17 Dependent Care Assistance Program (DCAP) .................................................................. 1618 Programs Funded in Recent Years, But Not Currently Funded ............................................... 18 The William F. Goodling Even Start Family Literacy Programs (Even Start) .................. 18 17 Early Reading First ....................................................................................................... 17..... 19 Early Childhood Educator Professional Development ..................................................... 17. 20 Early Learning Fund/Early Learning Opportunities Act Program .................................... 1720 Tables Table 1. Obama Administration’s FY2011 Budget Request for SelectStatus of FY2013 Appropriations for Selected Early Childhood Care and Education Programs, Compared to FY2010 Enacted Funding Levels and the the Obama Administration’s FY2010 Budget Request FY2013 Budget Request and FY2012 Enacted Funding Levels .........................................................................2.... 4 Table 2. FY2010 Appropriations for FY2012 Funding for Selected Early Childhood Care and Education Programs: Funding Levels in President Obama’s Budget Request, as well as the House-Passed and Senate Appropriations Committee-Passed L-HHS-ED Appropriations Bills, and the FY2010 Consolidated Appropriations Act (P.L. 111-117), Compared to FY2011 Funding Levels.......................................................................................... 6 Table 3. Funding for Selected Federal Early Childhood Care, Education, and Related Programs, FY2005-FY2010............. Programs, FY2007-FY2012 ......................................................................................................... 7 Congressional Research Service Early Childhood Care and Education Programs: Background and Funding 7 Contacts Author Contact Information ...................................................................................................... 18..... 20 Congressional Research Service . Early Childhood Care and Education Programs: Background and Funding Introduction Several federal programs support child care, education, or related services, primarily for lowincome working families. In addition, the tax code includes provisions specifically targeteddesigned to assist families with child care expenses. This report includes an overview of the Obama Administration’s FY2011 Budget request (see Table 1) and an update on FY2010 funding developments (see Table 2) for update on funding developments for FY2013 (see Table 1) and a summary of final FY2012 funding levels (see Table 2) for a selection of these early childhood care and education programs. ThisThe report also provides a six-yearsixyear funding history (see Table 3) and brief descriptions of the various early childhood-relatedfor these programs and tax related tax provisions. In many cases, other Congressional Research Service (CRS) reports are referenced as sources for more detailed information about individual programs. Early childhood care and education programs due to be reauthorized in the 111th113th Congress include the Child Care and Development Block Grant (CCDBG) and programs Head Start, as well as programs under the No Child Left Behind Act (NCLBA). All of these programs have continued to receive funding. The NCLBA Behind Act (NCLB) and the Individuals with Disabilities Education Act (IDEA). The NCLB programs include those funded under the Elementary and Secondary Education Act (ESEA) Title I, Part A, as well as Early Reading First and Even Start. Programs for young children contained in the Individuals with Disabilities Education Act (IDEA) (i.e., the Preschool Grants program and the Infants and Toddlers program) are not up for reauthorization in the 111th Congress. This report does not attempt to cover all issues connected with each of those reauthorizations. FY2011 President’s Budget The Obama Administration released its FY2011 Budget on February 1, 2010. As displayed in Table 1, the FY2011 President’s Budget calls for significant increases compared to FY2010 for two existing programs: Head Start (+$989 million) and the CCDBG (+$1.6 billion total, of which half is mandatory and half is discretionary funding). The FY2011 Budget also calls for an increase in the Dependent Care Tax Credit for families earning up to $113,000, though the effects of this would likely not be seen until FY2012. The FY2011 Budget proposes to maintain funding for certain early childhood programs administered by the U.S. Department of Education (including both early childhood components of IDEA) and to redirect funding from other programs (including Even Start/Striving Readers and Early Reading First) into a broader literacy initiative, titled Effective Teaching and Learning: Literacy. The literacy initiative would operate as a competitive grant program with grants awarded by the U.S. Department of Education. The FY2011 Budget does not explicitly re-propose the early childhood home visitation grant program that was included in the Obama Administration’s FY2010 Budget.1 However, the Obama Administration has issued Statements of Administration Policy (SAP) 2 that “strongly support” passage of the House-passed (H.R. 3962) and the Senate-passed (H.R. 3590) health care reform 1 U.S. Department of Health and Human Services, Administration for Children and Families, FY2010 Justifications of Estimates for Appropriations Committees, May 2009, p. 122. 2 The Statements of Administration Policy on the House-Passed bill (H.R. 3962) and the Senate-passed bill (H.R. 3590) are both available on the White House website at http://www.whitehouse.gov/omb/111/legislative_sap_date_first/. Congressional Research Service 1 . Early Childhood Care and Education Programs: Background and Funding bills, both of which would establish a state grant program to support evidence-based home visiting programs for low-income families with young children and those expecting children. 3 Table 1 displays the funding requested in the FY2011 President’s Budget for a selection of early childhood care and education programs compared to the funding levels that were requested by the President and enacted by Congress for FY2010. Table 1. Obama Administration’s FY2011 Budget Request for Select Early Childhood Care and Education Programs Compared to FY2010 Enacted Funding Levels and the Obama Administration’s FY2010 Budget Request ($ in millions) FY2010 President’s Budget FY2010 Enacted FY2011 President's Budget CCDBG—discretionary portion (HHS) 2,127 2,127 2,927 CCDBG—mandatory portion (HHS) 2,917 2,917 3,717 b b b Social Services Block Grant (HHS) 1,700 1,700 1,700 Head Start (HHS) 7,235 7,235 8,224 163 0c 0d 0 66 0d Individuals with Disabilities Education Act (IDEA)—Infants and Families (ED) 439 439 439 Individuals with Disabilities Education Act (IDEA)—Preschool Grants (ED) 374 374 374 16 16 16 Home Visitation—mandatory (HHS) 124 0 Title I Early Childhood Grants (ED) 500 0 0 Early Learning Challenge Fund— discretionary/mandatorye (ED) 300 0 625 Program/Provision (Federal Admin. Agency) Existing Programs TANF (HHS) Early Reading First (ED) Even Start (ED) Child Care Access Means Parents in School (ED) Proposed Programs Not Specifiedf Source: Prepared by the Congressional Research Service (CRS). Notes: This table does not include estimates for related early childhood tax provisions. For these, see Table 3 or the sections summarizing the “Dependent Care Tax Credit (DCTC)” and the “Dependent Care Assistance Program (DCAP)” later in this report. Note also that the Elementary and Secondary Education Act (ESEA) Title I, Part A (ED) is not included here because it primarily serves school-age disadvantaged children, and because reliable data on expenditures for preschoolers are not available. However, the U.S. Department of Education has estimated that approximately 2% of Title I, Part A funds are used to support preschool services. These preschool services are not separately funded under Title I, Part A, but rather are spent for this purpose at the discretion of local educational agencies (LEAs). Preschool spending data are not collected. The Obama Administration’s 3 For additional information, see CRS Report R40705, Home Visitation for Families with Young Children, by Emilie Stoltzfus and Karen E. Lynch. Congressional Research Service 2 . Early Childhood Care and Education Programs: Background and Funding FY2011 Budget requests a total of $14.49 billion for ESEA, Title I, Part A funding in FY2011, the same level of funding the program received under the FY2010 Consolidated Appropriations Act (P.L. 111-117). a. The FY2011 President’s Budget also calls for an increase of $800 million in mandatory child care funding. This increase is not displayed here because mandatory child care funds are typically pre-appropriated and are thus not subject to the annual appropriations process. b. P.L. 109-171 pre-appropriated mandatory TANF funding for each of FY2006-FY2010. TANF funds ($16.5 billion annually) may be used for child care, but are not specifically appropriated as such. HHS reports that states spent $1.6 billion in federal TANF funds for child care within the TANF program in FY2008 (the most recent data available). The authorization and pre-appropriated funding for TANF will expire at the end of FY2010. The FY2011 President’s Budget proposes to extend basic TANF funding for one year, FY2011. For more information on TANF in the FY2011 Budget, see CRS Report RL32760, The Temporary Assistance for Needy Families (TANF) Block Grant: Responses to Frequently Asked Questions, by Gene Falk. c. The FY2010 Consolidated Appropriations Act (P.L. 111-117) provided no funding for Early Reading First. Instead, Congress incorporated Early Reading First funding into an Expanded Striving Readers Program, which is intended to serve children from preschool through high school. The FY2010 Consolidated Appropriations Act funded Striving Readers at $250 million (an increase of about $215 million from FY2009) and reserved about 15% (or $37.5 million) for children ages 0-5. d. These programs would be included under the Administration’s proposal for a new competitive grant program titled “Effective Teaching and Learning: Literacy.” Under this proposal, there is no separate funding provided for Early Reading First or Even Start. e. Under the FY2010 President’s Budget, funding for the Early Learning Challenge Fund would have been discretionary. The FY2011 President’s Budget proposes mandatory funding for this program. f. The FY2011 President’s Budget does not specify a funding level for this proposed program, but the Obama Administration continues to support legislative action to create such a program. FY2010 Funding Developments FY2010 Appropriations On December 16, 2009, President Obama signed the Consolidated Appropriations Act, 2010, into law as P.L. 111-117. The measure provided funding for six of the 12 regular appropriations acts for FY2010, including appropriations for the Departments of Labor, Health and Human Services, and Education (L-HHS-ED). On December 8, 2009, a conference report (H.Rept. 111-366) was filed on the bill, H.R. 3288. The House and Senate agreed to the conference report on December 10 and December 13, respectively. The FY2010 Consolidated Appropriations Act (see Table 2) maintained level funding for early childhood care and education programs compared to funding in the FY2009 Omnibus, with two exceptions. It provided an increase of $122 million for Head Start in order to maintain the number of children served, and it eliminated funding for the Early Reading First program (-$113 million) to instead focus on expanding the Striving Readers program to serve children from preschool through high school. The FY2010 Consolidated Appropriations Act provided $250 million for the expanded Striving Readers program, an increase of roughly $215 million compared to FY2009. Of the total appropriated, about 15% (or $37.5 million) will be devoted to children from birth to age five. Finally, the FY2010 Consolidated Appropriations Act rejected the Obama Administration’s proposal to eliminate funding for Even Start ($66 million). Prior to the passage of H.R. 3288, both the House and Senate had initiated the L-HHS-ED appropriations process for FY2010. Although the full Senate did not pass a bill to provide LHHS-ED appropriations for FY2010, the Senate Appropriations Committee did report such a bill (S.Rept. 111-66, H.R. 3293) on August 4, 2009 (see Table 2). The Senate Appropriations Congressional Research Service 3 . Early Childhood Care and Education Programs: Background and Funding Committee-passed bill sought to maintain level funding for most early childhood care and education programs compared to the funding they received under the FY2009 Omnibus Appropriations Act (P.L. 111-8). However, compared to FY2009 Omnibus funding levels, the bill sought a modest increase for Head Start (+$122 million) and proposed to eliminate funding for Even Start (-$66 million). Both the increase to Head Start and the elimination of Even Start aligned with the Obama Administration’s FY2010 budget request. The Senate Appropriations Committee-passed bill also sought to eliminate a separate authorization for the Early Reading First program; instead, it added early reading programs to an expanded Striving Readers Program, which would serve children from preschool through high school. This provision was included in the conference bill, though at a different level of funding. The Senate Appropriations Committee recommended funding of $262.9 million for the program in FY2010, an increase of $227.5 million over FY2009 Omnibus funding levels, while the conference bill ultimately funded the Striving Readers program at $250 million. On July 24, 2009, the House passed its FY2010 L-HHS-ED appropriations bill, H.R. 3293 (see Table 2). The House-passed bill sought to maintain level funding for most early childhood care and education programs compared to the funding they received under the FY2009 Omnibus Appropriations Act (P.L. 111-8), but sought to provide modest increases to three programs compared to their FY2009 Omnibus funding levels: Head Start (+$122 million), Early Reading First (+$15 million), and Child Care Access Means Parents in School (+$1 million). In contrast to the Administration and Senate Appropriations Committee’s proposal to eliminate the Even Start Program, the House-passed bill sought to continue the program with level funding ($66 million) for FY2010. Prior to consideration by the full House, this bill was reported by the House Committee on Appropriations on July 22, 2009 (H.Rept. 111-220). FY2010 Budget Resolution On April 2, 2009, the House and Senate each passed versions of a concurrent resolution on the FY2010 budget (H.Con.Res. 85 and S.Con.Res. 13). After resolving the differences between their respective versions, the House and Senate agreed on a conference report to accompany the FY2010 budget resolution (S.Con.Res. 13, H.Rept. 111-89) on April 29. The conference agreement on the budget resolution did not specify funding levels for early childhood care and education programs. However, it did include deficit neutral reserve funds for home visiting programs in both the House and the Senate, and a deficit neutral reserve fund for the enhancement of the dependent care tax credit in the Senate only.4 Obama Administration FY2010 Budget Prior to Congress’ work on the FY2010 budget resolution, the Obama Administration released an outline of its FY2010 budget on February 26, 2009.5 More detailed budget proposals were later released by the Obama Administration on May 7 and 12. As displayed in Table 2, the FY2010 President’s Budget called for most of the existing early childhood programs to maintain the same level of funding that they received in FY2009; only three of the existing discretionary programs 4 For more information on how deficit neutral reserve funds operate, see CRS Report RL33122, Congressional Budget Resolutions: Revisions and Adjustments, by Robert Keith. 5 For more information about the FY2010 budget cycle, see CRS Report R40558, Major FY2010 Budget Proposals, by D. Andrew Austin. Congressional Research Service 4 . Early Childhood Care and Education Programs: Background and Funding were expected to receive an increase or decrease in funding levels under the President’s FY2010 request. Specifically, the budget proposed to eliminate funding for Even Start (-$66 million) and to increase funding for Head Start (+$122 million) and Early Reading First (+$50 million). In addition, the FY2010 President’s Budget called for the creation of several new programs to support the Obama Administration’s “Zero to Five” agenda for early childhood care and education. These newly proposed programs included: • Home Visitation: Capped mandatory funds would provide matching formula grants to states, territories, and tribes to support the establishment and expansion of evidence-based home visitation services for low-income mothers and pregnant women. The initiative would give priority to models that have been rigorously evaluated and shown to have positive effects on critical outcomes for families and children. The program would also include a set-aside of not less than 5% for training and technical assistance, research and evaluation, monitoring, and administrative support. Both the House and Senate have passed legislation that would fund home visitation programs for families with young children. For a more detailed discussion, see CRS Report R40705, Home Visitation for Families with Young Children, by Emilie Stoltzfus and Karen E. Lynch. • Title I Early Childhood Grants: Discretionary funds would be awarded by formula to states, who would use funds to provide matching grants to Title I Local Education Agencies (LEAs) that agree to invest American Recovery and Reinvestment Act (P.L. 111-5) funds in early childhood education. This program would provide one year of funding to support the planning and implementation of early childhood education initiatives. The Administration proposed to continue funding these initiatives in subsequent years through the Early Learning Challenge Fund. No legislation has been introduced in the 111th Congress to enact this proposal. • Early Learning Challenge Fund: Discretionary funds would provide competitive grants to states for development of state plans and statewide infrastructure of integrated early learning supports and services for children from birth through age five in order to raise the quality of publicly funded early learning programs and improve school readiness among children. The House has passed legislation in H.R. 3221, The Student Aid and Fiscal Responsibility Act, that would enact this proposal; the Senate has not yet acted. In addition, the Obama Administration’s FY2010 Budget called for discretionary funds to support a new Promise Neighborhoods initiative to support competitive grants to community-based organizations in developing comprehensive neighborhood programs to combat the effects of poverty and improve educational and life outcomes for children and youth, from birth through college and to career. 6 Although this initiative was not designed to focus solely on the early childhood issues, it is likely that programs funded through this initiative would support at least some activities related to early childhood care and education. 6 This initiative was funded at $10 million through the FY2010 Consolidated Appropriations Act (P.L. 111-117). The FY2011 President’s Budget calls for an increase of $200 million (for a total funding level of $210 million) in FY2011. Given the vast scope of Promise Neighborhoods, this report does not discuss them in great detail. For more information, see pp. G-15 to G-18 of the U.S. Department of Education’s FY2011 Justification of Appropriation Estimates to the Congress, http://www2.ed.gov/about/overview/budget/budget11/justifications/g-sss.pdf. Congressional Research Service 5 . Early Childhood Care and Education Programs: Background and Funding Table 2 displays the status of FY2010 appropriations, including the FY2010 budget request from the Obama Administration, the funding levels included in the House-passed and Senate Appropriations Committee-Passed appropriations bills for FY2010, and the final appropriation levels provided in the FY2010 Consolidated Appropriations Act (P.L. 111-117). Table 2. FY2010 Appropriations for Early Childhood Care and Education Programs: Funding Levels in President Obama’s Budget Request, as well as the House-Passed and Senate Appropriations Committee-Passed L-HHS-ED Appropriations Bills, and the FY2010 Consolidated Appropriations Act (P.L. 111-117) ($ in millions) FY2010 President’s Request H.R. 3293 HousePassed Bill H.R. 3293 Senate Appropriations CommitteePassed Bill Child Care and Development Block Grant— discretionary portion (HHS) 2,127 2,127 2,127 2,127 Social Services Block Grant (HHS) 1,700 1,700 1,700 1,700 Head Start (HHS) 7,235 7,235 7,235 7,235 163 128 0 0 0 66 0 66 Individuals with Disabilities Education Act (IDEA)—Infants and Families (ED) 439 439 439 439 Individuals with Disabilities Education Act (IDEA)—Preschool Grants (ED) 374 374 374 374 16 17 16 16 Home Visitation—mandatory funding (HHS) 124 0 0 0 Title I Early Childhood Grants (ED) 500 0 0 0 Early Learning Challenge Fund (ED) 300 0 0 0 Program/Provision (Federal Admin. Agency) FY2010 Consolidated Appropriations Act (P.L. 111-117) Existing Programs Early Reading First (ED) Even Start (ED) Child Care Access Means Parents in School (ED) Newly Proposed Programs for FY2010 Source: Prepared by the Congressional Research Service (CRS). Notes: This table only includes programs that are subject to the annual appropriations process (or programs newly proposed in the FY2010 President’s Budget). The Elementary and Secondary Education Act (ESEA) Title I, Part A (ED) is not included here because it primarily serves school-age disadvantaged children, and because reliable data on expenditures for preschoolers are not available. However, the U.S. Department of Education has estimated that approximately 2% of Title I, Part A funds are used to support preschool services. These preschool services are not separately funded under Title I, Part A, but rather are spent for this purpose at the discretion of local educational agencies (LEAs). Preschool spending data are not collected. The Obama Administration’s FY2010 Budget requested a total of $12.992 billion for ESEA, Title I, Part A funding in FY2010. The Housepassed appropriations bill, H.R. 3293, would fund ESEA, Title I, Part A at $14.5 billion. The Senate Appropriations Committee-passed bill, H.R. 3293, would fund ESEA, Title I, Part A at $13.792 billion. Ultimately, P.L. 111-117, the Consolidated Appropriations Act, 2010, provided $25 billion in funding for the ESEA, of which $14.49 billion is for Title I, Part A. Congressional Research Service 6 . Early Childhood Care and Education Programs: Background and Funding Overview of Federal Early Childhood Care and Education Programs and Related Tax Provisions Table 3 provides historical funding levels for current early childhood care and education programs (and related tax provisions) from FY2005 through FY2010. Brief descriptions of the programs and provisions highlight the breadth of variation in purpose, target population, and funding for these many early childhood initiatives. Table 3. Funding for Federal Early Childhood Care, Education, and Related Programs, FY2005-FY2010 (nominal dollars in millions) Program/Provision (Federal Admin. Agency) FY2005 FY2006 CCDBG— discretionary portion (HHS) 2,083a 2,062b CCDBG— mandatory portion (HHS) 2,717e FY2007 FY2008 FY2009 FY2010 2,062 2,062c 2,127d 2,127 2,917f 2,917f 2,917f 2,917f 2,917f g g g g g Programs TANF (HHS) eg Child and Adult Care Food (USDA) 2,134h 2,141h 2,172h 2,245h 2,452i 2,616i Social Services Block Grant (HHS) 1,700j 1,700jk 1,700j 1,700jl 1,700j 1,700 Head Start (HHS) 6,843am 6,786bn 6,888o 6,878cp 7,113q 7,235 Early Reading First (ED) 104a 103b 118r 113c 113 0 Even Start (ED) 225a 99b 82s 66c 66 66 IDEA Infants and Families (ED) 441a 436b 436s 436c 439t 439 IDEA Preschool Grants (ED) 385a 381b 381s 374c 374u 374 16a 16b 16s 16c 16 16 3,462v 3,487v 3,020w 4,330x 3,750x 600v 1,170z 940w 770x 1,210x Child Care Access Means Parents in School (ED) Tax Provisions Dependent Care Tax Credit (Treasury) Dependent Care Assistance Program (Treasury) 3,338v y Source: Prepared by the Congressional Research Service (CRS). Congressional Research Service 7 . Early Childhood Care and Education Programs: Background and Funding Notes: This table displays currently funded federal programs and tax provisions only. Programs that were funded in recent years but no longer receive funding are not shown. Two such programs include the U.S. Department of Education’s Early Childhood Educator Professional Development Program (funded at roughly $15 million from FY2004 to FY2007, but not funded since) and the Early Learning Fund from the Early Learning Opportunities Act, administered by the U.S. Department of Health and Human Services (funded at $34 million in FY2004, $36 million in FY2005, and not funded since). Also of note, the Elementary and Secondary Education Act (ESEA) Title I, Part A (ED) is not included here because it primarily serves school-age disadvantaged children, and because reliable data on expenditures for preschoolers are not available. However, the U.S. Department of Education has estimated that approximately 2% of Title I, Part A funds are used to support preschool services. These preschool services are not separately funded under Title I, Part A, but rather are spent for this purpose at the discretion of local educational agencies (LEAs). Preschool spending data are not collected. Total ESEA Title I, Part A funding is $14.49 billion in FY2010. It was $14.49 billion in FY2009, $14.03 billion in FY2008, $12.84 billion in FY2007, $12.74 billion in FY2006, and $12.74 billion in FY2005. a. The omnibus appropriations law (P.L. 108-447) included an across-the-board rescission of 0.8% for the discretionary programs included in Table 3. The numbers in the table reflect the offset. (For the smaller programs, the use of rounding in the table masks the decrease in the actual appropriation.) b. This amount reflects the 1% across-the-board rescission that applies to discretionary programs included in this appropriations act (P.L. 109-149). c. This amount reflects the 1.747% across-the-board rescission that applies under P.L. 110-161. d. In addition to the $2.127 billion appropriated in the FY2009 Omnibus Appropriations Act (P.L. 111-8), the American Recovery and Reinvestment Act (P.L. 111-5) provided an additional $2.0 billion in discretionary funding for the CCDBG. Further, states transferred over $1.7 billion of their FY2008 TANF allotments to the CCDBG, representing about 10% of the total FY2008 TANF allotment. e. Funding for TANF and the mandatory portion of CCDBG funding for FY2004 and FY2005 was provided (at the FY2002 rates) through a series of temporary extensions. f. P.L. 109-171 provides $2.917 billion for mandatory child care funding in each of FY2006-FY2010. g. TANF funds ($16.5 billion annually) may be used for child care, but are not specifically appropriated as such. HHS reports that states spent $1.6 billion in federal TANF funds for child care within the TANF program in FY2008 (the most recent data available). h. Obligations (actual for 2002-2008), Department of Agriculture. i. Numbers represent estimated obligations as reported in the Obama Administration’s FY2011 Budget and may be subject to change. j. Total SSBG appropriation amount shown (excluding supplementals), though not all SSBG funds go toward early childhood care and education activities. In FY2007 (the most recent expenditure data available), $389 million in SSBG expenditures went toward child care services. In FY2006, the comparable figure was $220 million; in FY2005, it was $241 million; and in FY2004, it was $254 million. k. In addition to the $1.7 billion appropriated in the Labor, HHS, Education law (P.L. 109-149), the Defense Appropriations Act (P.L. 109-148) provided $550 million in supplemental SSBG funds, specifically targeted for needs arising from the Gulf Coast Hurricanes of 2005. l. In addition to the $1.7 billion appropriated in the Consolidated Appropriations Act of 2008 (P.L. 110-161), the Consolidated Security, Disaster Assistance, and Continuing Appropriations Act of 2009 (P.L. 110-329) provided $600 million in supplemental SSBG funds, specifically targeted toward needs arising from major disasters of 2008 as well as Hurricanes Katrina and Rita. m. In FY2004, $1.4 billion was advance appropriated for the following year. In FY2005, $1.386 billion of the $6.843 billion was advance appropriated for FY2006. n. Of the $6.786 billion (post-rescission), $1.389 billion became available in FY2007. In addition to the amount shown in the table, the Defense Appropriations Act (P.L. 109-148) provided $90 million in additional funding for Head Start, to be used specifically for grantees serving children displaced by Gulf Coast hurricanes of 2005, and to help with costs of renovating Head Start facilities affected by the storms. o. Of the $6.888 billion, $1.365 billion became available in FY2008. p. Of the $6.878, $1.389 billion became available in FY2009. Congressional Research Service 8 . Early Childhood Care and Education Programs: Background and Funding q. In addition to the $7.113 billion appropriated in the FY2009 Omnibus Appropriations Act (P.L. 111-8), the American Recovery and Reinvestment Act (P.L. 111-5) provided an additional $2.1 billion for Head Start (of which $1.1 billion was explicitly directed toward Early Head Start expansion). Notably, the FY2009 Omnibus (P.L. 111-8) did not continue the previous practice of providing advance appropriations for the next fiscal year in the Head Start appropriation. As a result, the full $7.113 billion included in the Omnibus must be obligated in FY2009. In addition to funds from the Omnibus, FY2009 funding for Head Start also includes $1.389 billion in funds that were advance appropriated to this account by the Consolidated Appropriations Act of 2008 (P.L. 110-161). r. Figures taken from the Department of Education table showing “FY2007 CR Operating levels.” The fourth and final continuing resolution (CR) making appropriations for FY2007 was enacted February 15, 2007 (P.L. 110-5). s. Figure taken from the Department of Education FY2008 Budget Justification. t. In addition to the $439 million appropriated in the FY2009 Omnibus Appropriations Act (P.L. 111-8), the American Recovery and Reinvestment Act (P.L. 111-5) provided an additional $500 million for IDEA programs for infants and toddlers. u. In addition to the $374 million appropriated in the FY2009 Omnibus Appropriations Act (P.L. 111-8), the American Recovery and Reinvestment Act (P.L. 111-5) provided an additional $400 million for IDEA preschool grants. v. Prior tax year actual expenditures reported in (Internal Revenue Service) IRS publication 1304 Table 3.3—in other words, $3.338 billion in tax credit claimed in tax year 2004. w. Amounts reflect estimates for tax year 2007 (FY2008), taken from the FY2010 President’s Budget. x. Amounts reflect estimates for tax years 2008 (FY2009) and 2009 (FY2010), taken from the FY2011 President’s Budget, and may be subject to change. y. Actual tax expenditures associated with DCAP are not reported/collected on/from tax returns. z. Amount reflects estimate for the prior tax year, taken from the FY2009 President’s Budget. Current Programs Child Care and Development Block Grant (CCDBG) The primary federal grant program funding child care is the CCDBG, which was created in 1990 and reauthorized (through FY2002) and substantially expanded in 1996, as part of welfare reform.7 The CCDBG is overdue for reauthorization, and may be considered for reauthorization by the 111th Congress. (Although the 109th Congress completed legislation to provide the mandatory funding portion for the CCDBG through FY2010, the CCDBG Act itself, which outlines the rules of the program, and includes the authorization level for discretionary funding, awaits reauthorization. In the meantime, discretionary funding has been provided via the appropriations process.) The CCDBG is administered by the Department of Health and Human Services (HHS), and provides formula block grants to states, which use the grants to subsidize the child care expenses of families with children under age 13, if the parents are working or in school, and family income is less than 85% of the state median. (In practice, most states establish income eligibility levels that are lower than this federal threshold.) Child care services are provided on a sliding fee scale 7 For more information, see CRS Report RL30785, The Child Care and Development Block Grant: Background and Funding, by Karen E. Lynch. Congressional Research Service 9 . Early Childhood Care and Education Programs: Background and Funding basis, and parents may choose to receive assistance through vouchers or certificates, which can be used with a provider of the parents’ choice, including religious providers and relatives. States receiving CCDBG funds must establish child care licensing standards, although federal law does not dictate what these standards should be or what types of providers must be covered. In addition, states must have health and safety requirements applicable to all providers receiving CCDBG subsidies that address prevention and control of infectious diseases, building physical premises safety, and health and safety training for care givers. However, federal law does not dictate the specific contents of these requirements. The CCDBG is funded through both discretionary and capped entitlement (mandatory) grants (referred to in combination as the Child Care and Development Fund, or CCDF). State maintenance-of-effort (MOE) and matching requirements apply to part of the entitlement funds.8 States must use at least 4% of their total funds to improve the quality and availability of child care, and according to statute, must target 70% of entitlement funds on welfare recipients working toward self-sufficiency or families at risk of welfare dependency. However, because all families falling below the 85% of state median income requirement can be categorized as “at risk,” the 70% targeting of the welfare or at-risk population does not necessarily mean welfare families must be served. In theory, all funds may be used for low-income, non-welfare, working families. However, state plans indicate that many states guarantee child care to welfare families. No more than 5% of state allotments may be used for state administrative costs. The FY2009 Omnibus (P.L. 111-8) provided $2.127 billion in discretionary funding for the CCDBG, representing an increase of about $65 million above the FY2008 funding level. The ARRA (P.L. 111-5) provided an additional $2.0 billion in discretionary funds to the CCDBG in FY2009.9 These funds were made available for obligation through the end of FY2010, though HHS elected to allocate all funds to states during FY2009. The ARRA specified that a sum of approximately $255 million be reserved, out of the total appropriated to CCDBG, for quality activities; this sum augments the 4% that states are already required to use for such activities. Of the $255 million, nearly $94 million is reserved for activities designed to improve the quality of infant and toddler care. The Obama Administration’s FY2010 Budget proposed to maintain the FY2009 Omnibus level of $2.127 billion in discretionary CCDBG funds for FY2010. Congress provided the requested funding, $2.127 billion, in the FY2010 Consolidated Appropriations Act (P.L. 111-117). The FY2011 President’s Budget calls for $2.927 billion in discretionary CCDBG funding for FY2011, an increase of $800 million over the FY2010 funding level. The Budget also proposes to reauthorize the CCDBG based on five principles: (1) serving more low-income children in child care programs that promote child development and school readiness; (2) supporting parent employment and expanding access to high-quality care across child care settings; (3) promoting continuity of care; (4) strengthening program accountability; and (5) improving coordination across federal early childhood care and education programs. Mandatory (or “entitlement”) CCDBG funding is pre-appropriated, and does not occur through the annual appropriations process. Beginning in FY2003 through FY2005, a series of funding extensions maintained mandatory child care funding at the FY2002 rate of $2.717 billion 8 For more detailed information on the CCDF financing structure and early spending trends (through FY2000), see CRS Report RL31274, Child Care: Funding and Spending under Federal Block Grants, by Melinda Gish. 9 For more information, see CRS Report R40211, Human Services Provisions of the American Recovery and Reinvestment Act, by Gene Falk et al. Congressional Research Service 10 . Early Childhood Care and Education Programs: Background and Funding annually. Funding for a longer, five-year period (FY2006-FY2010) was included in the Deficit Reduction Act of 2005, a budget spending reconciliation bill (S. 1932), which was signed into law (P.L. 109-171) on February 8, 2006. This law provided $2.917 billion annually for each of FY2006-FY2010. The Obama Administration’s FY2011 Budget requests $3.717 billion in mandatory child care funds for FY2011, an increase of $800 million over the FY2010 funding level. When combining this mandatory increase with the proposed increase in discretionary funding, the FY2011 President’s Budget calls for a total funding level of over $6.6 billion in FY2011, an increase of $1.6 billion over the FY2010 funding level for these combined funding streams. In addition, the FY2011 President’s Budget calls for annual indexing of all mandatory child care funds for inflation, beginning in FY2012. Temporary Assistance for Needy Families (TANF) TANF, created in the 1996 welfare reform law (P.L. 104-193), provides fixed block grants for state-designed programs of time-limited and work-conditioned aid to needy families with children. 10 The original legislation provided $16.5 billion annually through FY2002, and after a series of twelve temporary extensions, Congress included several welfare provisions (and mandatory child care funding) in its spending budget reconciliation bill (S. 1932), which was signed into law (P.L. 109-171) on February 8, 2006. The law maintains the TANF block grant at $16.5 billion for FY2006-FY2010. The Obama Administration’s FY2011 President’s Budget calls for a one-year extension of basic TANF funding.11 Child care is one of many services for which states may use TANF funding. In FY2008 (the most recent year for which data are available), HHS reports that states spent about $1.6 billion in federal TANF funds for child care within the TANF program, and $2.6 billion in state TANF and separate state program (SSP) MOE funds.12 In addition, states may transfer up to 30% of their TANF allotments to CCDF, to be spent according to the rules of the child care program (as opposed to TANF rules). The transfer from the FY2008 TANF allotment to the CCDF totaled over $1.7 billion, representing about 10% of the FY2008 TANF allotment. Child and Adult Care Food Program (CACFP) The CACFP provides federal funds (in some case commodities) for meals and snacks served in licensed child care centers, family and group day care homes, and Head Start centers. 13 Child care providers that are exempt from state licensing requirements must comply with alternative state or federal standards. Children under 12, migrant children under 15, and children with disabilities of any age may participate, although most are preschoolers.14 Subsidies provided to day care centers, including Head Start centers, vary according to the child’s family income. Subsidies provided to family and group day care homes vary according to average income of the community in which the home is located. The CACFP is an open-ended entitlement, administered 10 For more information, see CRS Report R40946, The Temporary Assistance for Needy Families Block Grant: An Introduction, by Gene Falk. 11 Ibid. 12 For more information on states’ use of TANF funds, see CRS Report RL32748, The Temporary Assistance for Needy Families (TANF) Block Grant: A Primer on TANF Financing and Federal Requirements, by Gene Falk. 13 For more information, see CRS Report RL33307, Child Nutrition and WIC Programs: Background and Recent Funding, by Joe Richardson. 14 On average, less than 2% of total funding has gone toward adult food projects. Congressional Research Service 11 . Early Childhood Care and Education Programs: Background and Funding by the Department of Agriculture. Actual obligations came to $2.452 billion in FY2009. The Obama Administration’s FY2011 Budget estimates that CACFP obligations will reach $2.616 billion in FY2010 and $2.729 billion in FY2011. Social Services Block Grant (SSBG) The SSBG is an annually appropriated entitlement to states. Permanently authorized by Title XX of the Social Security Act, the SSBG is a flexible source of funding that states may use to support a wide variety of social services activities. States have broad discretion over the use of these funds. There are no federal income eligibility requirements, targeting provisions, service mandates, or matching requirements. In FY2007, the most recent year for which expenditure data are available, the largest expenditures for services under the SSBG were for foster care services, child care, and special services for the disabled. Approximately 13.7% of total SSBG expenditures ($389 million) were for child care services in that year, an increase from those made for child care in FY2006 ($220 million). Title XX is a capped entitlement, and state allocations are based on relative population size.15 It should be noted that although the SSBG has an entitlement ceiling, appropriations may not always abide by it. For example, the ceiling in FY2001 was $1.7 billion; however, Congress appropriated $1.725 billion for that year, despite the ceiling. Base funding for the SSBG has been held steady at $1.7 billion for the past eight years (most recently, under the FY2010 Consolidated Appropriations Act, P.L. 111-117), with states retaining authority to transfer up to 10% of their TANF block grants to the SSBG.16 However, during these years, Congress has twice provided supplemental funding to the SSBG to support states in responding to significant natural disasters. For instance, Congress appropriated $600 million in supplemental SSBG funding for necessary expenses resulting from major disasters of 2008 as part of the disaster relief and recovery component of the Consolidated Security, Disaster Assistance, and Continuing Appropriations Act of 2009 (P.L. 110-329). In FY2006, Congress provided an additional $550 million to the SSBG as part of the Defense Appropriations Act (P.L. 109-148), targeting these supplemental funds toward needs arising from the Gulf Coast Hurricanes of 2005. P.L. 110-28, signed into law on May 25, 2007, extended the availability of these funds for expenditure through the end of FY2009, as a good portion remained unspent prior to the end of FY2007, and without legislative action, would have been returned to the Treasury.17 The Obama Administration’s FY2011 Budget proposes to maintain funding for the SSBG at the $1.7 billion level, which is the amount Congress appropriated in the FY2010 Consolidated Appropriation Act (P.L. 111-117). 15 Grants to Puerto Rico, Guam, the Virgin Islands, and Northern Marianas are based on their share of Title XX funds in FY1981. 16 Funds transferred from TANF to SSBG can be used only for children and families whose income is less than 200% of the federal poverty guidelines. Under welfare reform law, states also may use SSBG funds for vouchers for families that are not eligible for cash assistance because of time limits under the welfare reform program, or for children who are denied cash assistance because they were born into families already receiving benefits for another child. 17 For more information, see CRS Report 94-953, Social Services Block Grant (Title XX of the Social Security Act), by Karen E. Lynch. Congressional Research Service 12 . Early Childhood Care and Education Programs: Background and Funding Head Start Head Start provides comprehensive early childhood education and development services to lowincome preschool children, on a part- or full-day basis.18 After unsuccessful attempts in the 109th Congress to reauthorize the Head Start program (whose authorization had expired with FY2003), legislation reauthorizing the program through FY2012 was passed by the 110th Congress in November 2007. That bill, H.R. 1429/H.Rept. 110-439, was signed into law (P.L. 110-134) by President Bush on December 12, 2007.19 While the program was awaiting reauthorization, funding continued to be provided through the appropriations process. Under current law, Head Start funds are provided directly by HHS to local grantees, who must comply with detailed federal performance standards. The available data show funded enrollment for Head Start in FY2007 to have totaled 908,412 children (10% of whom were under age 3, and participated in Early Head Start). The FY2009 Omnibus (P.L. 111-8) provided Head Start with an increase of nearly $235 million over FY2008, resulting in an FY2009 funding level of almost $7.113 billion, including $2 million reserved for Centers of Excellence in Early Childhood. In addition, Head Start received $2.1 billion from the ARRA (P.L. 111-5) in FY2009.20 These funds were made available for obligation through the end of FY2010. The ARRA specified that $1.0 billion be distributed through the regular Head Start formula (which covers increases for cost-of-living adjustments, quality activities, state advisory councils, and expansions for Head Start and Early Head Start programs). The remaining $1.1 billion was explicitly directed toward the expansion of Early Head Start programs. The FY2010 Consolidated Appropriations Act (P.L. 111-117) provided $7.235 billion for Head Start, an increase of $122 million over the FY2009 Omnibus funding level. For FY2011, the Obama Administration’s Budget calls for an increase of $989 million for Head Start, which would fund the program at $8.224 billion. The increase in funding is intended to ensure that Head Start programs are able to sustain services to the approximately 64,000 children estimated to be served by ARRA funds in FY2010. The FY2011 Budget also proposes language to override the statutory allocation formula for Head Start in order to target funds toward specific activities.21 Elementary and Secondary Education Act (ESEA) Title I, Part A ESEA Title I, Part A, is the largest federal education program serving disadvantaged children, particularly school-age children. After Head Start, it is the largest program providing early education and care to young children. The U.S. Department of Education estimates that approximately 2% of children served by Title I each year are preschoolers. Preschool services are not separately funded under Title I, Part A—such spending occurs if local educational agencies (LEAs) choose to use some of their Title I funds for this purpose. The FY2009 Omnibus (P.L. 111-8) provided $14.49 billion for Title I, Part A, an increase of $46 million over the FY2008 funding level of $14.03 billion. The ARRA provided an additional $10 billion for ESEA Title I, 18 For more information, see CRS Report RL30952, Head Start: Background and Issues, by Karen E. Lynch. For more information on the history of House and Senate provisions leading up to the conference-approved version, see CRS Report RL33968, Head Start Reauthorization: A Side-by-Side Comparison of House- and Senate-Passed Versions of H.R. 1429 and Current Law, by Melinda Gish. 20 For more information, see CRS Report R40211, Human Services Provisions of the American Recovery and Reinvestment Act, by Gene Falk et al. 21 For more information, see CRS Report RL30952, Head Start: Background and Issues, by Karen E. Lynch. 19 Congressional Research Service 13 . Early Childhood Care and Education Programs: Background and Funding Part A in FY2009. President Obama’s FY2010 Budget requested $13.0 billion for ESEA Title I, Part A, a decrease of about $1.5 billion from the FY2009 Omnibus funding level. However, the FY2010 Consolidated Appropriations Act (P.L. 111-117) maintained the same level of funding provided in the FY2009 Omnibus, $14.49 billion, for ESEA Title I, Part A. The FY2011 President’s Budget calls for ESEA Title I, Part A funding to remain level at $14.49 billion. The William F. Goodling Even Start Family Literacy Programs (Even Start) Even Start programs are authorized by ESEA Title I, Part B, Subpart 3, and are intended to integrate early childhood education, adult basic education, and parenting skills education into a unified family literacy program. 22 These programs provide grants to states which then distribute them to eligible entities (consisting of a local education agency (LEA) in collaboration with a community based organization). Even Start services generally serve children aged 0-7 and their parents. Even Start services must include adult literacy instruction, early childhood education, instruction to help parents support their child’s education, participant recruitment, screening of parents, staff training, and home-based instruction. Even Start, first authorized in 1989, grew rapidly in its first years, but has been subject to increasing criticism in recent years and has seen its funding decline in each year from FY2003 through FY2008, when the Consolidated Appropriations Act of 2008 (P.L. 110-161) provided $66 million for Even Start. Both the FY2009 Omnibus (P.L. 111-8) and the FY2010 Consolidated Appropriations Act (P.L. 111-117) maintained the FY2008 funding level of $66 million for Even Start, though President Obama’s FY2010 Budget requested no funding for the program. For FY2011, the President’s Budget once again requests no funding for Even Start. In advocating for the elimination of Even Start, the Obama Administration contends that this program has not demonstrated effectiveness in improving child and adult learning outcomes through the integration of the four core services of adult education, parenting education, parentchild activities, and early childhood education. The Administration argues that these conclusions are supported by data from three national evaluations of Even Start. Advocates of continuing Even Start programs argue that the goal of providing integrated family literacy services to an extremely disadvantaged population is so important that these programs should not be eliminated. Furthermore, they argue that a thorough study of the impact of legislatively mandated quality improvements to Even Start is needed, as well as a concerted effort to improve Even Start through implementation of model programs and technical assistance. Individuals with Disabilities Education Act (IDEA) Programs The majority of IDEA funding for special education and related services (approximately 90%) goes to school-age children via grants to states. However, IDEA also authorizes two state grant programs for young children: an early intervention program for infants and toddlers with disabilities (IDEA, Part C) and a preschool program for children with disabilities (IDEA, Part 22 For more information, see CRS Report RL30448, Even Start Family Literacy Programs: An Overview, by Gail McCallion, and CRS Report RL33071, Even Start: Funding Controversy, by Gail McCallion. Congressional Research Service 14 . Early Childhood Care and Education Programs: Background and Funding 619).23 The Infants and Toddlers Program serves disabled children from birth to two years of age, and the Preschool Program generally serves children ages 3 to 5. The Infants and Toddlers Program requires that states receiving grants create and maintain a “statewide, comprehensive, coordinated, multidisciplinary, interagency system that provides early intervention services for infants and toddlers with disabilities and their families.” Services focus on children experiencing “developmental delay” with respect to physical, mental, or other capacities, and their families. Services are detailed for each child and his or her family in an Individualized Family Service Plan. Services are to be provided, to the maximum extent feasible, in “natural environments,” including the home, with other infants and toddlers who are not disabled. States are eligible for Preschool Program grants under Section 619 of IDEA if they are eligible for grants under IDEA, Part B, grants to states, and they make available free appropriate public education to all disabled children 3 to 5 in the state. In recent years, all states qualified for and received preschool grants under this section. Since Part B grants to states are used to serve children with disabilities as young as three years of age (as well as school-age children), Section 619 is not so much a separate program as it is supplementary funding for services to this age group. In general, the provisions, requirements, and guarantees under the grants to states program that apply to school-age children with disabilities also apply to children in this age group. As a result, Section 619 is a relatively brief section of the law, which deals mostly with the state and substate funding formulas for the grants and state-level activities. IDEA was reauthorized during the 108th Congress. IDEA, Part C, received $439 million in funding for FY2009, an increase from FY2008 funding of $436 million. In addition, IDEA, Part C, received $500 million in funding from the ARRA in FY2009. Meanwhile, IDEA, Section 619 was funded at a level of $374 million for FY2009, the same level it received in FY2008, and it received $400 million in funding from the ARRA in that year. The FY2010 Consolidated Appropriations Act (P.L. 111-117) maintained FY2009 Omnibus funding levels for both IDEA, Part C ($439 million) and IDEA, Section 619 ($374 million). The FY2011 President’s Budget proposes that funding for both programs be maintained at the same level in FY2011. Child Care Access Means Parents in School (CAMPIS) Authorized under the Higher Education Act amendments of 1998, and first funded in FY1999 at $5 million, the CAMPIS program is designed to support the participation of low-income parents in post-secondary education through campus-based child care services. Discretionary grants of up to four years in duration are awarded competitively to institutions of higher education, to either supplement existing child care services, or to start a new program. Funding for FY2009 was $16 million, compared to $15.5 million in FY2008. The FY2010 Consolidated Appropriations Act (P.L. 111-117) provided level funding of $16 million for the CAMPIS program in FY2010, and the FY2011 President’s Budget proposes keeping funding level again in FY2011. 23 For more information, see CRS Report RL31273, Individuals with Disabilities Education Act (IDEA): Early Childhood Programs (Section 619 and Part C), by Richard N. Apling. Congressional Research Service 15 . Early Childhood Care and Education Programs: Background and Funding Tax Provisions Dependent Care Tax Credit (DCTC) The DCTC is a non-refundable tax credit for employment-related expenses incurred for the care of a dependent child under 13 or a disabled dependent or spouse, under Section 21 of the tax code. 24 Beginning in tax year 2003, the Economic Growth and Tax Relief Reconciliation Act of 2001 (P.L. 107-16) increased the maximum credit rate to 35% of expenses up to $3,000 for one child (for a credit of $1,050), and up to $6,000 for two or more children (for a credit of $2,100). The 35% rate applies to taxpayers with adjusted gross incomes of $15,000 or less. The rate decreases by 1% for each additional $2,000 increment (or portion thereof) in income until the rate reaches 20% for taxpayers with incomes over $43,000.25 Under the FY2011 Budget released by the Obama Administration in February 2010, DCTC expenditures were estimated to be $4.330 billion for tax year 2008 (FY2009), $3.750 billion for tax year 2009 (FY2010), and $2.200 billion for tax year 2010 (FY2011).26 Included in the FY2011 Budget is a proposal to increase the DCTC for all families earning up to $113,000 a year, and to nearly double it for families making under $85,000.27 The Budget proposes to make this provision effective for taxable years beginning after December 31, 2010, which means that the results of increasing the credit would likely not be seen until FY2012. Dependent Care Assistance Program (DCAP) Under Section 129 of the tax code, payments made by a taxpayer’s employer for dependent care assistance may be excluded from the employee’s income and, therefore, not be subject to federal income tax or employment taxes. 28 The maximum exclusion is $5,000. Section 125 of the tax code allows employers to include dependent care assistance, along with other fringe benefits, in nontaxable flexible benefit or “cafeteria” plans. Under the FY2011 Budget released by the Obama Administration in February 2010, DCAP expenditures were estimated to be $770 million for tax year 2008 (FY2009), $1.210 billion for tax year 2009 (FY2010), and $1.370 billion for tax year 2010 (FY2011).29 24 For more information, see CRS Report RS21466, Dependent Care: Current Tax Benefits and Legislative Issues, by Janemarie Mulvey and Christine Scott. 25 These provisions are currently schedule to expire on December 31, 2010. 26 Office of Management and Budget, Analytical Perspectives, Budget of the U.S. Government, Fiscal Year 2011, February 2010, p. 211, http://www.whitehouse.gov/omb/budget/fy2011/assets/spec.pdf. 27 U.S. Department of the Treasury, General Explanations of the Administration’s FY2011 Revenue Proposals, p. 15, http://www.treas.gov/offices/tax-policy/library/greenbk10.pdf. Specifically, the FY2011 President’s Budget proposes to permanently increase, from $15,000 to $85,000, the income level at which the credit begins to phase out. The rate would then decrease by 1% for every $2,000 increment (or part thereof) in income until reaching 20% for taxpayers with incomes above $113,000. 28 For more information, see CRS Report RS21466, Dependent Care: Current Tax Benefits and Legislative Issues, by Janemarie Mulvey and Christine Scott. 29 Office of Management and Budget, Analytical Perspectives, Budget of the U.S. Government, Fiscal Year 2011, February 2010, p. 211, http://www.whitehouse.gov/omb/budget/fy2011/assets/spec.pdf. Congressional Research Service 16 . Early Childhood Care and Education Programs: Background and Funding Programs Funded in Recent Years, But Not Currently Funded Early Reading First The Early Reading First program, authorized by ESEA Title I, Part B, Subpart 2, supported local efforts to enhance the school readiness of young children—particularly those from low-income families—through scientific research-based strategies and professional development that are designed to enhance the verbal skills, phonological awareness, letter knowledge, and pre-reading skills of preschool age children.30 The program provided competitive grants to eligible local educational agencies (LEAs) and to public or private organizations or agencies located in eligible LEAs, with the Department of Education authorized award grants for up to six years. The FY2009 Omnibus (P.L. 111-8) maintained the FY2008 funding level of $113 million for the Early Reading First program. President Obama’s FY2010 Budget requested $163 million for the program, an increase of $50 million over FY2009 funding. However, the FY2010 Consolidated Appropriations Act (P.L. 111-117) provided no funding for Early Reading First. Instead, Congress incorporated Early Reading First funding into an Expanded Striving Readers Program, which will serve children from preschool through high school. The FY2010 Consolidated Appropriation increases funding for Striving Readers to $250 million (an increase of about $215 million from FY2009) and reserves about 15% (or $37.5 million) for children ages 0-5. The FY2011 President’s Budget does not request funding for Early Reading First. Early Childhood Educator Professional Development The Department of Education has provided competitive grants to partnerships to improve the knowledge and skills of early childhood educators who work in communities that have high concentrations of children living in poverty. Funding in FY2006 and FY2007 remained stable at approximately $14.5 million, but FY2007 was the last year in which funds were appropriated. President Obama’s FY2010 Budget did not request any funds for this program for FY2010, nor were any funds appropriated in the FY2010 Consolidated Appropriations Act (P.L. 111-117). President Obama’s FY2011 Budget does not request funds for this program for FY2011. Early Learning Fund/Early Learning Opportunities Act Program This HHS program (referred to by both names), authorized by the FY2001 Consolidated Appropriations Act (P.L. 106-554), was last funded in FY2005 at $36 million. The FY2006 Appropriations Act included no funding for this program, nor has there been funding provided through any of the continuing resolutions for FY2007-FY2009. When funded, the program provides grants to communities to enhance school readiness for children under five, specifically by funding efforts to improve the cognitive, physical, social, and emotional development of these children. Although authorized at $600 million, FY2003 funding for the program was set at $25 million; FY2004 funding was set at $34 million (despite President Bush’s FY2003 budget proposal to eliminate the program); and in FY2005, P.L. 108-199 included $36 million for the Early Learning Fund. FY2005 was the last year in which this program received funding. President Obama’s FY2010 Budget requested no funding for this program for FY2010 and no funds were 30 For more information, see CRS Report RL31241, Reading First and Early Reading First: Background and Funding, by Gail McCallion. Congressional Research Service 17 . Early Childhood Care and Education Programs: Background and Funding provided in the FY2010 Consolidated Appropriations Act (P.L. 111-117). President Obama’s FY2011 Budget does not request funds for this program for FY2011. Author Contact Information Karen E. Lynch Analyst in Social Policy klynch@crs.loc.gov, 7-6899 Congressional Research Service Gail McCallion Specialist in Social Policy gmccallion@crs.loc.gov, 7-7758 18 I, Part A. The IDEA programs include the Infants and Families program, but not the Preschool Grants program. In addition, mandatory child care and the Temporary Assistance for Needy Families (TANF) block grant are also due for reauthorization. FY2013 Funding Proposed Supplemental Appropriations On December 7, 2012, the Obama Administration submitted a request to Congress for disaster relief funding to support states affected by Hurricane Sandy. As part of this request, the Administration called for Congress to provide supplemental appropriations for two funding streams related to early childhood care and education: the Social Services Block Grant ($500 million) and Head Start ($100 million).1 On December 28, 2012, the Senate approved both of these requests as part of a larger disaster supplemental package (introduced as an amendment to H.R. 1).2 However, the House took no action on this bill, as amended by the Senate, prior to the end of the 112th Congress.3 A press release on the draft Senate bill indicated that the Social Services Block Grant (SSBG) funds were expected to be used primarily for child care costs (including construction and renovation of child care centers), as well as health and mental health services for affected children and families, while the Head Start funds were expected to support approximately 265 Head Start centers damaged by the hurricane.4 1 Office of Management and Budget, Hurricane Sandy Funding Needs, Washington, DC, December 7, 2012, pp. 15-16, http://www.whitehouse.gov/sites/default/files/supplemental__december_7_2012_hurricane_sandy_funding_needs.pdf. pdf. 2 H.R. 1 as amended by the Senate, pp. 76-79. 3 For more information on proposed FY2013 supplemental funding for disaster relief, see CRS Report R42869, FY2013 Supplemental Funding for Disaster Relief: Summary and Considerations for Congress, coordinated by William L. Painter and Jared T. Brown. 4 Senate Appropriations Committee, “Summary: Fiscal Year 2013 Disaster Assistance Supplemental,” press release, December 12, 2012, p. 7, http://www.appropriations.senate.gov/news.cfm. Congressional Research Service 1 Early Childhood Care and Education Programs: Background and Funding Continuing Resolution Congress did not enact full-year appropriations prior to the beginning of FY2013. However, FY2013 funding for annually appropriated programs (including early childhood care and education programs) has been provided—through March 27, 2013—by a government-wide continuing resolution (CR). The CR (H.J.Res. 117) was signed into law (P.L. 112-175) on September 28, 2012, and generally maintains funding for discretionary programs at their FY2012 rates, plus 0.612%. The CR also maintains mandatory funding for annually appropriated entitlements (e.g., the Child and Adult Care Food Program) at their current law levels. In addition, the CR included a special provision extending TANF and mandatory child care funding at FY2012 levels through March 2013 (these programs are typically funded outside of the annual appropriations process). Preliminary Congressional Action on Full-Year Appropriations Before enacting the FY2013 CR, both the House and Senate had initiated actions on FY2013 appropriations bills for the Departments of Labor, Health and Human Services, and Education, and Related Agencies (L-HHS-ED). The L-HHS-ED appropriations bill provides annual funding for many of the early childhood care and education programs discussed in this report. The Senate Appropriations L-HHS-ED Subcommittee approved a draft FY2013 bill for full committee consideration on June 12, 2012. Two days later, the Senate Appropriations Committee reported its FY2013 L-HHS-ED bill (S. 3295, S.Rept. 112-176), on June 14, 2012. The bill called for increases, compared to FY2012 for several early childhood programs, including discretionary funding for the CCDBG (+7%), Head Start (+1%), IDEA Grants for Infants and Families (+5%), and Promise Neighborhoods (+34%). For more details, see Table 1. The House Appropriations L-HHS-ED Subcommittee approved a draft FY2013 L-HHS-ED bill on July 18, 2012. However, the bill was not marked up by the full committee and a detailed table on programs that would be funded by the bill has not been made publicly available. Because no formal bill was reported and funding levels for all programs are not publicly available, this report does not include program-level detail on the House L-HHS-ED Subcommittee action. Possible FY2013 Sequestration Readers should note that FY2013 appropriations may be affected by automatic budget reduction procedures (known as “sequestration”) authorized by the Budget Control Act of 2011 (BCA, P.L. 112-25) and the Balanced Budget and Emergency Deficit Control Act of 1985 (P.L. 99-177), as amended by the American Taxpayer Relief Act of 2012 (P.L. 112-240). The BCA, which was signed into law on August 2, 2011, established a Joint Select Committee on Deficit Reduction, charged with the task of achieving at least $1.2 trillion in deficit reduction over FY2012FY2021.5 The Joint Committee did not achieve this goal, triggering an automatic budget reduction process, or sequestration, which the BCA scheduled to begin on January 2, 2013. 5 For a comprehensive discussion of the BCA, see CRS Report R41965, The Budget Control Act of 2011, by Bill Heniff Jr., Elizabeth Rybicki, and Shannon M. Mahan. Congressional Research Service 2 Early Childhood Care and Education Programs: Background and Funding However, the American Taxpayer Relief Act of 2012, which was signed into law on January 2, 2013, postponed the required sequestration until March 1, 2013. At that time, under current law, the Office of Management and Budget (OMB) is scheduled to cancel (i.e., sequester) a certain amount of budgetary resources available for FY2013 by reducing non-exempt programs, projects, and activities by a uniform percentage. OMB will determine what this percentage must be, based on funding in place at that time, as well as the terms specified by the Balanced Budget and Emergency Deficit Control Act of 1985, as amended by the BCA and the American Taxpayer Relief Act of 2012. To address some of the uncertainty surrounding sequestration, Congress passed the Sequestration Transparency Act of 2012 (P.L. 112-155), which was signed into law on August 7, 2012. This law required the President, with the assistance of OMB and federal agencies, in consultation with the House and Senate Appropriations Committees, to submit a report containing an estimate of the uniform percentage reduction and dollar amount reductions for each account, and each program, project, and activity within those accounts, required under the impending sequestration (which, at that time, was scheduled to occur on January 2, 2013). OMB released the sequester preview report on September 14, 2012.6 Using certain assumptions required by the Sequestration Transparency Act, OMB estimated that the sequestration would result in an 8.2% reduction in “non-exempt nondefense discretionary” funding and a 7.6% reduction to most “non-exempt nondefense mandatory” programs.7 The report also identified certain accounts that would be exempt from sequestration (e.g., mandatory child care, most TANF funds) or subject to special rules. However, the majority of early childhood care and education programs include at least some non-exempt funding which would be sequestered under current law. Notably, the estimates and classifications presented in OMB’s report are preliminary and are based, in part, on assumptions specified by the Sequestration Transparency Act.8 As OMB notes in the sequester preview report, these estimates are expected to differ at the time of an actual sequester, based on “changes in law and ongoing legal, budgetary, and technical analysis.” Thus, the percent and dollar reductions estimated in the preview report should be considered illustrative only; they will be revised in the event of an actual sequester based on OMB’s interpretation of current law and the funding levels in place at that time. FY2013 President’s Budget The Obama Administration released its FY2013 request on February 13, 2012. As Table 1 shows, the FY2013 President’s Budget called for increases over FY2012 funding levels for several existing programs, including the CCDBG (+16% of combined mandatory and discretionary funds), Head Start (+1%), IDEA Grants for Infants and Families (+5%), and Promise Neighborhoods (+67%). The Administration’s budget also requested an increase for ED’s Race to 6 OMB Report Pursuant to the Sequestration Transparency Act of 2012 (P.L. 112-155), September 14, 2012, http://www.whitehouse.gov/sites/default/files/omb/assets/legislative_reports/stareport.pdf. 7 Ibid, p. 1. 8 For instance, the Sequestration Transparency Act stipulated that, in the absence of enacted regular appropriations bills, the estimates in the sequester preview report should be based on the assumption that discretionary appropriations for FY2013 would be funded at the same rate of operations as FY2012. However, the FY2013 CR (P.L. 112-175) included an across-the-board increase of 0.612% for most discretionary programs, along with other anomalies. Thus, the percent and dollar reductions estimated in the OMB report will need to be revised should the higher CR funding level be in place at the time of a sequester. Congressional Research Service 3 Early Childhood Care and Education Programs: Background and Funding the Top (RTT) program (+55%), though it did not specify how much of the RTT funding would be dedicated toward early learning.9 The FY2013 budget also called for an expansion of the Dependent Care Tax Credit, though the full effects of this would not be seen until FY2014. Table 1. Status of FY2013 Appropriations for Selected Early Childhood Care and Education Programs, Compared to the Obama Administration’s FY2013 Budget Request and FY2012 Enacted Funding Levels (dollars in millions) FY2012 Enacteda FY2013 Request FY2013 Senate Appropriations Committee Bill (S. 3295 in the 112th Congress) CCDBG—discretionary portion (HHS) 2,278 2,927 2,438 CCDBG—mandatory portion (HHS) 2,917 3,417 Social Services Block Grant (HHS)c 1,700 1,700 1,700 Head Start (HHS) 7,969 8,054 8,039 IDEA Infants and Families (ED) 443 463 463 IDEA Preschool Grants (ED) 373 373 373 Child Care Access Means Parents in School (ED) 16 16 16 Promise Neighborhoods (ED) 60 100 80 549 850 549 Program (Federal Admin. Agency) Race to the Top (ED)d b Source: Prepared by the Congressional Research Service (CRS). Notes: This table does not include estimates for related early childhood tax provisions, nor does it include funding levels for pre-appropriated mandatory programs (e.g., Temporary Assistance for Needy Families, home visitation), with the exception of mandatory child care, which is shown here to display the Administration’s proposed increase for FY2013. Note that the Elementary and Secondary Education Act (ESEA) Title I, Part A (ED) is not included here because it primarily serves school-age disadvantaged children, and because reliable data on expenditures for preschoolers are not available. However, the U.S. Department of Education has estimated that approximately 2% of Title I, Part A funds are used to support preschool services. These preschool services are not separately funded under Title I, Part A, but rather are spent for this purpose at the discretion of local educational agencies (LEAs). Preschool spending data are not collected. The Obama Administration’s FY2013 budget requested a total of $14.52 billion for ESEA, Title I, Part A funding for FY2013, the same amount that was provided in FY2012. The FY2013 Senate Appropriations Committee-reported bill (S. 3295 in the 112th Congress) called for $14.62 billion for ESEA, Title I, Part A. a. Discretionary funds in this column reflect the 0.189% across-the-board rescission required by P.L. 112-74. b. Mandatory child care funding is not typically provided in the annual appropriations process, but rather through direct appropriations in authorizing laws. No mandatory child care funding was included in S. 3295. c. The funding shown here does not include the $85 million in mandatory funding for Health Profession Opportunity Grants that was pre-appropriated for each of FY2010 to FY2014 in the Patient Protection and 9 ED first reserved a portion of its RTT funding for early learning challenge grants to states in FY2011, when the annual appropriations law (P.L. 112-10) gave ED the authority to do so (see §1832). The report language (H.Rept. 112331) accompanying the FY2012 appropriations law (P.L. 112-74) indicated an expectation that the RTT will continue to include a “robust” early childhood component and the FY2013 President’s budget indicates an intention to continue to support early learning activities with the RTT. Congressional Research Service 4 Early Childhood Care and Education Programs: Background and Funding Affordable Care Act (ACA, P.L. 111-148). These grants are authorized within Title XX-A of the Social Security Act (see Section 2008), which also authorizes the SSBG (see Section 2001). d. The report language (H.Rept. 112-331) accompanying the FY2012 appropriations law (P.L. 112-74) expressed an expectation that the FY2012 RTT competition would include a “robust” early childhood component, but did not reserve a dollar amount for these activities. Ultimately, ED reserved $133 million for RTT-Early Learning Challenge (RTT-ELC) grants in FY2012. Similarly, the FY2013 President’s budget and the report on the Senate Appropriations Committee-approved bill called for some portion of the requested FY2013 RTT funding (dollar amounts not specified) to be used to support the RTT-ELC. FY2012 Funding FY2012 Appropriations On December 23, 2011, President Obama signed into law the Consolidated Appropriations Act, 2012 (H.R. 2055, H.Rept. 112-331, P.L. 112-74). Division F of this law provided FY2012 funding for the Departments of Labor, Health and Human Services, and Education (L-HHS-ED) and included an across-the-board rescission of 0.189% for most discretionary L-HHS-ED programs.10 As Table 2 shows, compared to FY2011, the FY2012 appropriations law provided increases in funding for the discretionary CCDBG (+3%), Head Start (+5%), and IDEA Grants for Infants and Families (+1%). The law provided a reduced level of funding for ED’s Race to the Top program (-21%), but the report language (H.Rept. 112-331) accompanying the law expressed an expectation that the FY2012 RTT program would include a “robust” early childhood component. Prior to the enactment of the FY2012 Consolidated Appropriations Act (P.L. 112-74), temporary funding for these early childhood care and education programs had been provided by three shortterm continuing resolutions (P.L. 112-33, P.L. 112-36, and P.L. 112-55). Before the passage of the first FY2012 continuing resolution (CR), the House and Senate had initiated the FY2012 L-HHSED appropriations process. On September 29, 2011, a bill was introduced in the House to provide year-long FY2012 L-HHS-ED appropriations (H.R. 3070). This bill would have maintained level funding for most of the early childhood programs discussed in this report, though it would have provided an increase for Head Start and would have eliminated all RTT funding. On September 21, 2011, the Senate Committee on Appropriations reported its bill to provide year-long FY2012 L-HHS-ED appropriations (S. 1599, S.Rept. 112-84). This bill would have maintained level funding for most early childhood programs, but would have provided increases to Head Start and IDEA Grants for Infants and Families (see Table 2). Separate from the annual appropriations process, funding for Temporary Assistance for Needy Families (TANF) and the mandatory portion of the CCDBG was most recently extended—and directly appropriated—by the Middle Class Tax Relief and Job Creation Act of 2012 (H.R. 3630, P.L. 112-96, H.Rept. 112-399). This law provided level funding for these programs through the end of FY2012 (September 30, 2012).11 10 Most of the annually appropriated early childhood care and education programs discussed in this report are funded via the L-HHS-ED appropriations process. An exception is the Child and Adult Care Food Program (CACFP), which is funded via the Agriculture and Related Agencies appropriations process (P.L. 112-55 for FY2012). 11 While this law maintains basic TANF funding at the $16.5 billion level, it does not provide FY2012 funding for TANF “supplemental grants.” For FY2001 to FY2010, TANF supplemental grants were funded at $319 million per year. For FY2011, TANF supplemental grants were funded at $211 million and expired on June 30, 2011. For additional information on this and other TANF-related provisions in P.L. 112-96, see CRS Report R41781, The (continued...) Congressional Research Service 5 Early Childhood Care and Education Programs: Background and Funding FY2012 President’s Budget The Obama Administration released its FY2012 request on February 14, 2011, before funding for FY2011 had been finalized. Compared to final FY2011 funding levels, however, the FY2012 request would have increased funding for several existing programs, including the CCDBG (+23% of combined mandatory and discretionary funds), Head Start (+7%), IDEA Grants for Infants and Families (+12%), and Promise Neighborhoods (+401%). The FY2012 budget also called for an expansion of the Dependent Care Tax Credit, though the effects of this would likely not be seen until FY2013. In addition, the FY2012 budget requested $350 million for a new Early Learning Challenge Fund. The Obama Administration had previously requested funding for an Early Learning Challenge Fund in the FY2010 and FY2011 President’s budgets.12 The proposed Early Learning Challenge Fund was to provide discretionary competitive grants to states to improve the standards and quality of early learning programs serving children from birth to age five. (As Table 2 shows, the proposed stand-alone Early Learning Challenge Fund has not been enacted; however, Congress has supported an “early learning challenge” component of the Race to the Top program, beginning in FY2011.) Table 2. FY2012 Funding for Selected Early Childhood Care and Education Programs, Compared to FY2011 Funding Levels (dollars in millions) Program (Federal Admin. Agency) FY2011 Enacteda FY2012 Request FY2012 House (H.R. 3070) FY2012 Senate (S. 1599) FY2012 Enactedb CCDBG—discretionary portion (HHS) 2,223 2,927 2,223 2,223 2,278 CCDBG—mandatory portion (HHS) 2,917 3,417 n/a n/a 2,917 1,700 1,700 1,700 1,700 1,700 7,560 8,100 8,100 7,900 7,969 IDEA Infants and Families (ED) 439 489 439 444 443 IDEA Preschool Grants (ED) 373 374 373 373 373 Child Care Access Means Parents in School (ED) 16 16 16 16 16 Promise Neighborhoods (ED) 30 150 0 60 60 699d 900e 0 699f 549f 350e 0 0 0 Social Services Block Grant (HHS)c Head Start (HHS) Race to the Top (ED) Early Learning Challenge Fund (ED)—proposed stand-alone program 0 Source: Prepared by the Congressional Research Service (CRS). Notes: The notation “n/a” means not applicable (for the mandatory portion of the CCDBG, this is because funding is not provided through the annual appropriations process). The table does not include estimates for related early childhood tax provisions, nor does it include funding levels for pre-appropriated mandatory (...continued) Temporary Assistance for Needy Families (TANF) Block Grant: Issues for the 112th Congress, by Gene Falk. 12 During the 111th Congress, the House passed legislation in H.R. 3221, The Student Aid and Fiscal Responsibility Act, that would have enacted this proposal, but the program was not included in the final (enacted) version of the bill. Congressional Research Service 6 Early Childhood Care and Education Programs: Background and Funding programs (e.g., Temporary Assistance for Needy Families, home visitation), with the exception of mandatory child care, which is shown here to display the proposed increase. Note that the Elementary and Secondary Education Act (ESEA) Title I, Part A (ED) is not included here because it primarily serves school-age disadvantaged children, and because reliable data on expenditures for preschoolers are not available. However, the U.S. Department of Education has estimated that approximately 2% of Title I, Part A funds are used to support preschool services. These preschool services are not separately funded under Title I, Part A, but rather are spent for this purpose at the discretion of local educational agencies (LEAs). Preschool spending data are not collected. In FY2012, ED received $14.52 billion for ESEA, Title I, Part A. a. Discretionary funds in this column reflect the 0.2% across-the-board rescission required by P.L. 112-10. b. Discretionary funds in this column reflect the 0.189% across-the-board rescission required by P.L. 112-74. c. The funding shown here does not include the $85 million in mandatory funding for Health Profession Opportunity Grants that was pre-appropriated for each of FY2010 to FY2014 in the Patient Protection and Affordable Care Act (ACA, P.L. 111-148). These grants are authorized within Title XX-A of the Social Security Act (see Section 2008), which also authorizes the SSBG (see Section 2001). d. The final CR for FY2011 (P.L. 112-10) gave ED new authority to reserve a portion of its FY2011 Race to the Top funding for competitive grants to states for the improvement of early childhood care and education. ED used this authority to reserve $500 million for RTT “early learning challenge” grants. e. The FY2012 President’s budget was released before the final FY2011 CR was enacted. It requested $350 million for a stand-alone Early Learning Challenge Fund. Separately, the FY2012 budget requested $900 million for the RTT. While the RTT request did not indicate that a significant portion of these funds would be used to support early learning, the request materials did indicate that ED was considering the idea of making the improvement of early learning outcomes a priority in the proposed FY2012 RTT competition. f. The report language accompanying both the proposed Senate bill for FY2012 (S.Rept. 112-84, S. 1599) and the enacted FY2012 appropriations law (H.Rept. 112-331, P.L. 112-74) expressed an expectation that the FY2012 RTT competition would include a “robust” early childhood component. However, neither specified an amount that should be reserved for these activities. Overview of Federal Early Childhood Care and Education Programs and Related Tax Provisions Table 3 provides historical funding levels for selected early childhood care and education programs (and related tax provisions) from FY2007 through FY2012 (the most recent year for which full-year funding has been appropriated). The table is followed by brief descriptions of these programs and provisions, highlighting the breadth of variation in purpose, target population, and funding for these early childhood initiatives. This section concludes with a brief summary of certain early childhood programs that were funded in the recent past, but do not currently receive federal funding. Table 3. Funding for Selected Federal Early Childhood Care, Education, and Related Programs, FY2007-FY2012 (nominal dollars in millions) Program/Provision (Federal Admin. Agency) FY2007 FY2008 FY2009 2,062a 2,127b FY2010 FY2011 FY2012 2,223c 2,278d Programs CCDBG—discretionary portion (HHS) 2,062 Congressional Research Service 2,127 7 Early Childhood Care and Education Programs: Background and Funding Program/Provision (Federal Admin. Agency) CCDBG— mandatory portion (HHS) FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 2,917e 2,917e 2,917e 2,917e 2,917e 2,917e TANF (HHS) f f f f f f Child and Adult Care Food (USDA) 2,172g 2,245g 2,452g 2,543g 2,732g 2,758g Social Services Block Grant (HHS) 1,700h 1,700hi 1,700h 1,700j 1,700j 1,700j Head Start (HHS) 6,888k 6,878al 7,113m 7,234n 7,560c 7,969d n/a n/a n/a 100o 250o 350o 118p 113a 113 0t 0 0 Even Start (ED) 82q 66a 66 66 0 0 Early Childhood Educator Professional Development Program (ED) 15q 0 0 0 0 0 IDEA Infants and Families (ED) 436q 436a 439r 439 439c 443d IDEA Preschool Grants (ED) 381q 374a 374s 374 373c 373d Child Care Access Means Parents in School (ED) 16q 16a 16 16 16c 16d Promise Neighborhoods (ED) n/a n/a n/a 10 30c 60d Race to the Top (ED) n/a n/a u 0 699cv 549dw Dependent Care Tax Credit (Treasury)x 3,487 3,020 4,330 3,470 4,200 3,400 Dependent Care Assistance Program (Treasury)x 1,170 940 770 1,210 840 1,350 Maternal, Infant, and Early Childhood Home Visiting Program (HHS) Early Reading First (ED) Tax Provisions Source: Prepared by the Congressional Research Service (CRS). Notes: The notation “n/a” means not applicable (e.g., the Maternal, Infant, and Early Childhood Home Visiting Program did not exist prior to the enactment of health reform legislation in March 2010). This table displays only those selected early childhood care and education programs or tax provisions that received funding (in at least one year) between FY2007 and FY2012. Also of note, the Elementary and Secondary Education Act (ESEA) Title I, Part A (ED) is not included here because it primarily serves school-age disadvantaged children, and because reliable data on expenditures for preschoolers are not available. However, the U.S. Department of Education has estimated that approximately 2% of Title I, Part A funds are used to support preschool services. These preschool services are not separately funded under Title I, Part A, but rather are spent for this purpose at the discretion of local educational agencies (LEAs). Preschool spending data are not collected. Total ESEA Title I, Part A funding was $14.52 billion in FY2012, $14.44 billion in FY2011, $14.49 billion in FY2010, $14.49 billion in FY2009, $14.03 billion in FY2008, and $12.84 billion in FY2007. a. This FY2008 amount reflects the 1.747% across-the-board rescission required by P.L. 110-161. b. In addition to the $2.127 billion appropriated in the FY2009 Omnibus Appropriations Act (P.L. 111-8), the American Recovery and Reinvestment Act (ARRA, P.L. 111-5) provided an additional $2.0 billion in discretionary funding for the CCDBG. Congressional Research Service 8 Early Childhood Care and Education Programs: Background and Funding c. This FY2011 amount reflects the 0.2% across-the-board rescission required by P.L. 112-10. d. This FY2012 amount reflects the 0.189% across-the-board rescission required by P.L. 112-74. e. P.L. 109-171 provided $2.917 billion for mandatory child care funding in each of FY2006-FY2010. Funding for FY2011 and FY2012 has been provided through temporary extensions, most recently P.L. 112-96. f. P.L. 109-171 provided basic TANF funding ($16.5 billion annually) in each of FY2006-FY2010. Funding for FY2011 and FY2012 has been provided through temporary extensions, most recently P.L. 112-96. TANF funds may be used for child care, but are not specifically appropriated as such. HHS reported that states spent $1.4 billion in federal TANF funds for child care within the TANF program in FY2010 (the most recent data available). In addition, states transferred $1.4 billion of their FY2010 TANF allotments to the CCDBG. For more information on TANF in the FY2011 budget, see CRS Report RL32760, The Temporary Assistance for Needy Families (TANF) Block Grant: Responses to Frequently Asked Questions, by Gene Falk. g. The amounts shown for FY2007-FY2011 are actual obligations, as reported in subsequent President’s budgets (e.g., FY2011 actuals are from the Analytical Perspectives volume of the FY2013 President’s budget). The amount shown for FY2012 reflects estimated obligations, as reported in the FY2013 request. h. Total SSBG appropriation amount shown (excluding supplementals), though not all SSBG funds go toward early childhood care and education activities. In FY2009 (the most recent expenditure data available), $391 million in SSBG expenditures went toward child care services. In FY2008, the comparable figure was $369 million. In FY2007, it was $389 million. i. In addition to the $1.7 billion appropriated in the Consolidated Appropriations Act of 2008 (P.L. 110-161), the Consolidated Security, Disaster Assistance, and Continuing Appropriations Act of 2009 (P.L. 110-329) provided $600 million in supplemental SSBG funds, specifically targeted toward needs arising from major disasters of 2008 as well as Hurricanes Katrina and Rita. j. The funding shown for FY2010-FY2012 does not include the $85 million in mandatory funding for Health Profession Opportunity Grants that was pre-appropriated for each of FY2010 to FY2014 in the Patient Protection and Affordable Care Act (ACA, P.L. 111-148). These grants are authorized within Title XX-A of the Social Security Act (see Section 2008), which also authorizes the SSBG (see Section 2001), but are not targeted toward early childhood care and education activities. k. Of the $6.888 billion, $1.365 billion became available in FY2008. l. Of the $6.878, $1.389 billion became available in FY2009. m. In addition to the $7.113 billion appropriated in the FY2009 Omnibus Appropriations Act (P.L. 111-8), ARRA (P.L. 111-5) provided an additional $2.1 billion for Head Start (of which $1.1 billion was explicitly directed toward Early Head Start expansion). The FY2009 Omnibus (P.L. 111-8) did not continue the previous practice of providing advance appropriations for the next fiscal year in the Head Start appropriation (meaning that the full $7.113 billion in the Omnibus needed to be obligated in FY2009). n. This figure reflects the fact that the Secretary of HHS invoked her 1% transfer authority (per section 206 of Title II of the Consolidated Appropriations Act of 2010) to transfer a portion of the FY2010 Head Start appropriation ($1.103 million, or roughly 0.02%) to the Health Resources and Services Administration (HRSA) in FY2010. o. Health reform legislation (P.L. 111-148) directly appropriated annual funding for each of FY2010-FY2015 ($100 million for FY2010, $250 million for FY2011, $350 million for FY2012, and $400 million for each of FY2013 and FY2014) for this newly authorized program. p. Figures taken from the Department of Education table showing “FY2007 CR Operating levels.” The fourth and final continuing resolution (CR) making appropriations for FY2007 was enacted February 15, 2007 (P.L. 110-5). q. Figure taken from the Department of Education FY2008 Budget Justification. r. In addition to the $439 million appropriated in the FY2009 Omnibus Appropriations Act (P.L. 111-8), ARRA (P.L. 111-5) provided an additional $500 million for IDEA programs for infants and families. s. In addition to the $374 million appropriated in the FY2009 Omnibus Appropriations Act (P.L. 111-8), ARRA (P.L. 111-5) provided an additional $400 million for IDEA preschool grants. t. The FY2010 Consolidated Appropriations Act eliminated funding for the Early Reading First program to instead focus on expanding the Striving Readers program to serve children from preschool through high Congressional Research Service 9 Early Childhood Care and Education Programs: Background and Funding school. In FY2010, Striving Readers received $250 million for the expanded program, an increase of roughly $215 million compared to FY2009. Of the total amount appropriated, about 15% (or $37.5 million) was to be targeted to children from birth to age five. u. This program was first authorized and funded by Title XIV, Sec. 14006 of the American Recovery and Reinvestment Act (P.L. 111-5), which provided $4.35 billion. v. The final CR for FY2011 (P.L. 112-10) gave ED new authority to reserve a portion of its FY2011 Race to the Top funding for competitive grants to states for the improvement of early childhood care and education. ED used this authority to reserve $500 million for RTT “early learning challenge” grants. w. The report language (H.Rept. 112-331) accompanying the FY2012 appropriations law (P.L. 112-74) expressed an expectation that the FY2012 RTT competition would include a “robust” early childhood component, but it is not yet clear what this will look like. x. Amounts reflect estimates provided in subsequent President’s budgets (e.g., DCTC = $3.02 billion for tax year 2007 (FY2008), as reported in the FY2010 President’s budget; $4.33 billion for tax year 2008 (FY2009), as reported in the FY2011 President’s budget; $3.47 billion for tax year 2009 (FY2010), as reported in the FY2012 President’s budget; and $4.20 billion for tax year 2010 (FY2011) and $3.40 billion for tax year 2011 (FY2012), as reported in the FY2013 President’s budget). Current Programs Child Care and Development Block Grant (CCDBG) The CCDBG is the primary source of federal grant funding dedicated to child care subsidies for low-income working families.13 The CCDBG has two funding streams. Discretionary funding is authorized by the CCDBG Act of 1990, which is currently due for reauthorization. The CCDBG Act was last reauthorized (through the end of FY2002) and substantially expanded by the 1996 welfare reform law (P.L. 104-193). Although the authorization has expired, the CCDBG has continued to receive discretionary funding in each year since FY2002 through the annual appropriations process. Mandatory funding for the CCDBG is authorized by Section 418 of the Social Security Act, which is also due for reauthorization. Mandatory (or “entitlement”) CCDBG funding is typically pre-appropriated by authorizing statute (most recently P.L. 112-96) and is not generally part of the annual appropriations process.14 In order to receive their full allotments from the mandatory CCDBG funding stream, states must meet maintenance-of-effort (MOE) and matching requirements; there are no such requirements attached to discretionary CCDBG allotments.15 At the federal level, these child care funding streams are jointly administered by HHS. The funds are allocated to states, according to a formula, and are used to subsidize the child care expenses of low-income working families with children under age 13. Federal law stipulates that eligible families are those with a family income below 85% of the state median income.16 In practice, however, most states establish income eligibility levels below the federal threshold. Child care 13 For more information, see CRS Report RL30785, The Child Care and Development Block Grant: Background and Funding, by Karen E. Lynch. 14 The combined mandatory and discretionary CCDBG funding streams are sometimes referred to as the Child Care and Development Fund (CCDF). 15 For more detailed information on the CCDF financing structure and early spending trends (through FY2000), see CRS Report RL31274, Child Care: Funding and Spending under Federal Block Grants, by Melinda Gish. 16 The law requires states to direct 70% of mandatory CCDBG funds toward welfare recipients working toward selfsufficiency or families at risk of welfare dependency. However, HHS has determined that all families with income falling below 85% of state median income can be categorized as “at risk.” Congressional Research Service 10 Early Childhood Care and Education Programs: Background and Funding services are provided to families on a sliding fee scale basis and parents may choose to receive assistance through vouchers or certificates, which can be used with a provider of the parents’ choice, including religious providers and relatives. In addition to supporting direct services for children, states must use at least 4% of their CCDBG funds (both mandatory and discretionary) to improve the quality and availability of child care. States receiving CCDBG funds must establish child care licensing standards, although federal law does not dictate what these standards should be or what types of child care providers must be covered. In addition, states must have health and safety requirements applicable to all providers receiving CCDBG subsidies that address prevention and control of infectious diseases, building premises safety, and health and safety training for care givers. However, federal law does not dictate the specific contents of these requirements or how these requirements are to be enforced. No more than 5% of state allotments may be used for state administrative costs. The final FY2011 CR (P.L. 112-10) provided $2.223 billion in discretionary CCDBG funding, roughly $96 million (+4%) more than the FY2010 funding level of $2.127 billion.17 In a break from recent annual appropriations, the final FY2011 CR eliminated a CCDBG set-aside for the Child Care Aware toll-free hotline (typically funded at $1 million annually). Traditionally, Child Care Aware staffed this hotline with child care consumer education specialists, who would respond to questions from parents and child care providers about the elements of quality child care and how to locate child care programs in local communities.18 The FY2012 appropriations law (P.L. 112-74) provided $2.278 billion in discretionary CCDBG funding, roughly $56 million (+3%) more than the FY2011 funding level.19 Notably, the FY2012 law reserved roughly $1 million for a “competitive grant” (i.e., not an earmark directly to Child Care Aware) for the operation of a national toll-free hotline and website for the dissemination of child care consumer education and to help parents access child care in their communities. Mandatory (or “entitlement”) CCDBG funding is typically pre-appropriated, and is not usually provided through the annual appropriations process. Beginning in FY2003 through FY2005, a series of funding extensions maintained mandatory child care funding at the FY2002 rate of $2.717 billion annually. Funding for a longer, five-year period (FY2006-FY2010) was included in the Deficit Reduction Act of 2005, a budget spending reconciliation bill (S. 1932), which was signed into law (P.L. 109-171) on February 8, 2006. This law provided $2.917 billion annually for each of FY2006-FY2010. Since FY2010, mandatory funding for child care has been provided through a series of short-term extensions, the most recent of which (P.L. 112-175) maintains mandatory child care funding at the same level through March 2013. Temporary Assistance for Needy Families (TANF) TANF, created in the 1996 welfare reform law (P.L. 104-193), provides fixed block grants for state-designed programs of time-limited and work-conditioned aid to needy families with children.20 The original legislation provided $16.5 billion annually through FY2002, and after a 17 The FY2011 amount reflects the across-the-board rescission of 0.2% required by P.L. 112-10. For more information, visit the Child Care Aware website at http://childcareaware.org/. 19 The FY2012 amount reflects the across-the-board rescission of 0.189% required by Division F of P.L. 112-74. 20 For more information, see CRS Report R40946, The Temporary Assistance for Needy Families Block Grant: An Introduction, by Gene Falk. See also, CRS Report RL32760, The Temporary Assistance for Needy Families (TANF) Block Grant: Responses to Frequently Asked Questions, by Gene Falk. 18 Congressional Research Service 11 Early Childhood Care and Education Programs: Background and Funding series of twelve temporary extensions, Congress included several TANF provisions (and mandatory child care funding) in its spending budget reconciliation bill (S. 1932), which was signed into law (P.L. 109-171) on February 8, 2006. The law maintained the TANF block grant at $16.5 billion for FY2006-FY2010. Since then, funding for basic TANF grants has been provided through another series of extensions, the most recent of which (P.L. 112-175) maintains basic TANF funding at the same level through March 2013.21 Child care is one of many services for which states may use TANF funding. In FY2011 (the most recent year for which data are available), HHS reported that states spent about $1.4 billion in federal TANF funds for child care within the TANF program, and $2.6 billion in state TANF and separate state program (SSP) MOE funds.22 In addition, states may transfer up to 30% of their TANF allotments to CCDF, to be spent according to the rules of the child care program (as opposed to TANF rules). The net transfer from the FY2011 TANF allotment to the CCDF totaled $1.6 billion, representing about 9% of the FY2011 basic TANF allotment.23 Child and Adult Care Food Program (CACFP) The CACFP provides federal funds (and in some cases commodity foods) for meals and snacks served in licensed child care centers, family and group day care homes, and Head Start centers.24 Child care providers that are exempt from state licensing requirements must comply with alternative state or federal standards. Children under age 12, migrant children under age 15, and children with disabilities of any age may participate, although most participants are preschoolers.25 Subsidies provided to day care centers, including Head Start centers, vary according to the child’s family income. Subsidies provided to family and group day care homes vary according to the care provider’s income or the average income of the community in which the home is located. The CACFP is an annually appropriated open-ended entitlement, administered by the Department of Agriculture. Actual obligations came to $2.732 billion in FY2011.26 The Obama Administration’s FY2013 budget estimated that CACFP obligations would reach $2.758 billion in FY2012 and $2.917 billion in FY2013. 21 While this law maintains basic TANF funding at the $16.5 billion level, it does not provide funding for TANF “supplemental grants.” For FY2001 to FY2010, TANF supplemental grants were funded at $319 million per year. For FY2011, TANF supplemental grants were funded at $211 million and expired on June 30, 2011. No funding was provided for TANF supplemental grants in FY2012. For additional information on this and other TANF-related provisions in P.L. 112-96, see CRS Report RL32760, The Temporary Assistance for Needy Families (TANF) Block Grant: Responses to Frequently Asked Questions, by Gene Falk. 22 For more information on states’ use of TANF funds, see CRS Report RL32748, The Temporary Assistance for Needy Families (TANF) Block Grant: A Primer on TANF Financing and Federal Requirements, by Gene Falk. 23 FY2011 TANF financial data are available at http://www.acf.hhs.gov/programs/ofa/resource/tanf-financial-data-fy2011. 24 For background information on CACFP, see CRS Report R42353, Domestic Food Assistance: Summary of Programs, by Randy Alison Aussenberg and Kirsten J. Colello. For a summary of the CACFP provisions in the most recent reauthorization, see CRS Report R41354, Child Nutrition and WIC Reauthorization: P.L. 111-296, by Randy Alison Aussenberg. 25 As the program name indicates, CACFP also serves adult day care providers. However, the vast majority of funding is spent on child care settings. In FY2012, roughly 96% of funds were used for child care and 4% for adult daycare. 26 Office of Management and Budget (OMB), Analytical Perspectives, Budget of the U.S. Government, Fiscal Year 2013, February 2012, p. 306, http://www.whitehouse.gov/sites/default/files/omb/budget/fy2013/assets/spec.pdf. Congressional Research Service 12 Early Childhood Care and Education Programs: Background and Funding Social Services Block Grant (SSBG) The SSBG is an annually appropriated entitlement to states.27 Permanently authorized by Title XX, Subtitle A, of the Social Security Act, the SSBG is a flexible source of funding that states use to support a wide variety of social services activities. States have broad discretion over the use of these funds. There are no federal income eligibility requirements, targeting provisions, service mandates, or matching requirements. In FY2009, the most recent year for which expenditure data are available, the largest expenditures for services under the SSBG were for child care, foster care services for children, and special services for the disabled. Approximately 14% of total SSBG expenditures ($391 million) were for child care services in that year. The SSBG is a capped entitlement, and state allocations are based on relative population size.28 It should be noted that although the SSBG has an entitlement ceiling, appropriations may not always abide by it. For example, the ceiling in FY2001 was $1.7 billion; however, Congress appropriated $1.725 billion for that year, despite the ceiling. Base funding for the SSBG has been held steady at $1.7 billion since FY2002.29 (Since FY2001, annual appropriations acts have also included a provision stipulating that states may transfer up to 10% of their TANF block grants to the SSBG.30) However, during these years, Congress has twice provided supplemental funding to the SSBG to support states in responding to significant natural disasters. For instance, Congress appropriated $600 million in supplemental SSBG funding for necessary expenses resulting from major disasters of 2008 as part of the disaster relief and recovery component of the Consolidated Security, Disaster Assistance, and Continuing Appropriations Act of 2009 (P.L. 110-329).31 Previously, Congress had provided $550 million to the SSBG in FY2006 as part of the Defense Appropriations Act (P.L. 109-148).32 These supplemental funds were targeted toward needs arising from the Gulf Coast Hurricanes of 2005. Head Start Head Start has provided comprehensive early childhood education and development services to low-income children since 1965.33 The program seeks to promote school readiness by enhancing 27 For more information, see CRS Report 94-953, Social Services Block Grant: Background and Funding, by Karen E. Lynch. 28 Grants to Puerto Rico, Guam, the Virgin Islands, and Northern Mariana Islands are based on their share of Title XX funds in FY1981, while grants to American Samoa are based on the relative size of their population compared to the population of the Northern Mariana Islands. 29 Base funding for the SSBG does not include supplemental appropriations in response to major disasters, nor does it include separate pre-appropriated funding for Health Profession Opportunity Grants. Funding for Health Profession Opportunity Grants was pre-appropriated ($85 million annually for each of FY2010 to FY2014) by the Patient Protection and Affordable Care Act (ACA, P.L. 111-148). These grants are authorized within Title XX-A of the Social Security Act (Section 2008), which also authorizes the SSBG (Section 2001), but are not targeted toward early childhood care and education activities. 30 Funds transferred from TANF to SSBG can be used only for children and families whose income is less than 200% of the federal poverty guidelines. Under welfare reform law, states also may use SSBG funds for vouchers for families that are not eligible for cash assistance because of time limits under the welfare reform program, or for children who are denied cash assistance because they were born into families already receiving benefits for another child. 31 In November 2010, the President signed P.L. 111-285, extending the expenditure deadline for these supplemental funds by one fiscal year (i.e., through September 30, 2011). 32 P.L. 110-28, signed into law on May 25, 2007, extended the availability of these funds for expenditure through the end of FY2009. 33 For more information, see CRS Report RL30952, Head Start: Background and Issues, by Karen E. Lynch. Congressional Research Service 13 Early Childhood Care and Education Programs: Background and Funding the social and cognitive development of children through the provision of educational, health, nutritional, social, and other services. Most children served in Head Start programs are three- and four-year olds, but in 1994 Head Start was expanded to include an Early Head Start program, which serves children from birth to three years of age. Head Start was last reauthorized by the Improving Head Start for School Readiness Act of 2007 (P.L. 110-134), which was signed into law on December 12, 2007. This law authorized the program through the end of FY2012 (September 30, 2012).34 At the federal level, Head Start is administered by the HHS. HHS awards Head Start funds directly to local grantees rather than through states. Programs are locally designed and are administered by a network of roughly 1,600 public and private nonprofit and for-profit agencies. Head Start agencies are required to comply with detailed federal performance standards. The final FY2011 CR (P.L. 112-10) appropriated $7.560 billion for Head Start, roughly $326 million (+5%) more than the FY2010 funding level of $7.234 billion.35 The FY2012 appropriations law (P.L. 112-74) provided $7.969 billion for Head Start, roughly $409 million (+5%) more than the FY2011 funding level.36 According to HHS, Head Start funding supported slots for about 964,430 children in FY2011 and an estimated 962,120 children in FY2012.37 Early Head Start programs account for roughly 12% of total enrolled slots in each of these two years. Maternal, Infant, and Early Childhood Home Visiting Program In March 2010, the Patient Protection and Affordable Care Act (ACA; P.L. 111-148, as amended by P.L. 111-152) established the Maternal, Infant, and Early Childhood Home Visiting (MIECHV) program under Title V of the Social Security Act.38 This program provides grants primarily to states, territories, and tribal entities for home visiting services that (1) promote maternal, infant and child health; (2) improve school readiness and achievement; (3) prevent child abuse or neglect and injuries; (4) improve family economic self-sufficiency; (5) reduce crime or domestic violence; and (6) improve coordination and referrals for community resources and supports. Grantees must establish benchmarks in each of these areas and must demonstrate improvement in no fewer than four of the six desired outcome areas within three years. The majority of funding (a minimum of 75%) must be used to support a home visiting program model that has shown sufficient evidence of effectiveness.39 However, grantees may use up to 25% of their funds to implement home visiting program models that show “promise” of effectiveness. Under any of these models, the services must be provided on a voluntary basis to families with young children, including women who are pregnant and men expecting to become fathers. 34 For more information on the history of House and Senate provisions leading up to the conference-approved reauthorization law, see CRS Report RL33968, Head Start Reauthorization: A Side-by-Side Comparison of House- and Senate-Passed Versions of H.R. 1429 and Current Law, by Melinda Gish. 35 The FY2011 amount reflects the across-the-board rescission of 0.2% required by P.L. 112-10. The FY2010 amount reflects the Secretary’s decision to transfer $1.103 million from Head Start to the Health Resources and Services Administration (HRSA), pursuant to her 1% transfer authority under Section 206 of P.L. 111-117. 36 The FY2012 amount reflects the across-the-board rescission of 0.189% required by Division F of P.L. 112-74. 37 U.S. Department of Health and Human Services, Administration for Children and Families, FY2013 Justification of Estimates for Appropriations Committees, February 2011, p. 103. 38 For additional information, see the description of H.R. 3590 in CRS Report R40705, Home Visitation for Families with Young Children, by Emilie Stoltzfus and Karen E. Lynch. 39 More information on such models can be found on the HHS Home Visiting Evidence of Effectiveness (HomeVEE) homepage at http://homvee.acf.hhs.gov/. Congressional Research Service 14 Early Childhood Care and Education Programs: Background and Funding Further, among eligible families, priority for services must be given to those in at-risk communities (as identified by a mandatory statewide needs assessment) and those with other specified risk or need factors. MIECHV funds are distributed by formula to all participating states. In addition, states may compete for additional funds based on the strength of their program or their effort to develop a strong program. While all states are eligible to participate, as of FY2012, three states (North Dakota, Florida, and Wyoming) had discontinued operating the program. In such cases, the law allows non-profit organizations to apply to operate the MIECHV program within the state. Funds to tribal entities are distributed via competitive grants. At the federal level, the law specified that this program was to be administered collaboratively by two HHS agencies: the Maternal and Child Health Bureau at the Health Resources and Services Administration (HRSA) and the Administration for Children and Families (ACF).40 The law also directly appropriated (or preappropriated) five years of funding for this new program: $100 million for FY2010, $250 million for FY2011, $350 million for FY2012, and $400 million for each of FY2013 and FY2014.41 Elementary and Secondary Education Act (ESEA) Title I, Part A ESEA Title I, Part A, is the largest federal education program serving disadvantaged children, particularly school-age children. After Head Start, it is the largest program providing early education and care to young children. The U.S. Department of Education estimates that approximately 2% of children served by Title I each year are preschoolers. Preschool services are not separately funded under Title I, Part A—such spending occurs if local educational agencies (LEAs) choose to use some of their Title I funds for this purpose. The final FY2011 CR (P.L. 11210) appropriated $14.44 billion for Title I, Part A, which is roughly $49 million (-0.3%) less than the FY2010 funding level of $14.49.42 The FY2012 appropriations law (P.L. 112-74) provided $14.52 billion for Title I, Part A, which is roughly $74 million (+1%) more than FY2011.43 Individuals with Disabilities Education Act (IDEA) Programs The majority of IDEA funding for special education and related services (approximately 90%) goes to school-age children via grants to states. However, IDEA also authorizes two state grant programs for young children: an early intervention program for families with infants or toddlers with disabilities (IDEA, Part C) and a preschool program for children with disabilities (IDEA, Part 619).44 The Infants and Families Program serves disabled children from birth to two years of age, and the Preschool Program generally serves children ages three to five. The Infants and Families Program requires that states receiving grants create and maintain a “statewide, comprehensive, coordinated, multidisciplinary, interagency system that provides early 40 HHS has located the program’s main homepage at http://mchb.hrsa.gov/programs/homevisiting/. The ACA provided no funding beyond FY2014 and according to the Congressional Budget Office score for the ACA (http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/113xx/doc11307/reid_letter_hr3590.pdf), MIECHV funding will drop out of the federal budget baseline entirely at that point. 42 The FY2011 amount reflects the across-the-board rescission of 0.2% required by P.L. 112-10. 43 The FY2012 amount reflects the across-the-board rescission of 0.189% required by Division F of P.L. 112-74. 44 For more information, see CRS Report RL31273, Individuals with Disabilities Education Act (IDEA): Early Childhood Programs (Section 619 and Part C), by Richard N. Apling. 41 Congressional Research Service 15 Early Childhood Care and Education Programs: Background and Funding intervention services for infants and toddlers with disabilities and their families.” Services focus on children experiencing “developmental delay” with respect to physical, mental, or other capacities, and their families. Services are detailed for each child and his or her family in an Individualized Family Service Plan. Services are to be provided, to the maximum extent feasible, in “natural environments,” including the home, with other infants and toddlers who are not disabled. IDEA Grants to Infants and Families (Part C) were funded at $439 million in FY2011 and $443 million in FY2012.45 States are eligible for Preschool Program grants under Section 619 of IDEA if they are eligible for grants under IDEA, Part B, grants to states, and they make available free appropriate public education to all disabled children 3 to 5 in the state. In recent years, all states qualified for and received preschool grants under this section. Since Part B grants to states are used to serve children with disabilities as young as three years of age (as well as school-age children), Section 619 is not so much a separate program as it is supplementary funding for services to this age group. In general, the provisions, requirements, and guarantees under the grants to states program that apply to school-age children with disabilities also apply to children in this age group. As a result, Section 619 is a relatively brief section of the law, which deals mostly with the state and substate funding formulas for the grants and state-level activities. IDEA Preschool Grants (Part B, Section 619) were funded at $373 million in both FY2011 and FY2012.46 Child Care Access Means Parents in School (CAMPIS) Authorized under the Higher Education Act amendments of 1998, and first funded in FY1999 at $5 million, the CAMPIS program is designed to support the participation of low-income parents in post-secondary education through campus-based child care services. Discretionary grants of up to four years in duration are awarded competitively to institutions of higher education, to either supplement existing child care services, or to start a new program. CAMPIS received roughly $16 million in FY2011 and FY2012.47 Promise Neighborhoods The Promise Neighborhoods program provides competitive grants to support communities in developing and implementing comprehensive neighborhood plans to combat poverty and improve educational and life outcomes for children. These neighborhood plans typically support a continuum of services from early learning to college and career.48 They may cover a range of issues, from improving a neighborhood’s health, safety, and stability to expanding access to learning technology and Internet connectivity and boosting family engagement in student learning. The Promise Neighborhoods program, which is administered by ED, was launched in FY2010 with $10 million. ED used these funds to award 21 communities with one-year planning 45 These amounts reflect, respectively, the FY2011 across-the-board rescission of 0.2% required by P.L. 112-10 and the FY2012 across-the-board rescission of 0.189% required by Division F of P.L. 112-74. 46 These amounts reflect, respectively, the FY2011 across-the-board rescission of 0.2% required by P.L. 112-10 and the FY2012 across-the-board rescission of 0.189% required by Division F of P.L. 112-74. 47 These amounts reflect, respectively, the FY2011 across-the-board rescission of 0.2% required by P.L. 112-10 and the FY2012 across-the-board rescission of 0.189% required by Division F of P.L. 112-74. 48 Promise Neighborhoods grantees are not required to focus specifically on early childhood, but many of the current grantees selected “comprehensive local early learning networks” as a competitive priority on their applications. Congressional Research Service 16 Early Childhood Care and Education Programs: Background and Funding grants.49 Funding for Promise Neighborhoods has increased in each subsequent year, to $30 million in FY2011 (+199% from FY2010) and $60 million in FY2012 (+100% from FY2011).50 With FY2011 funds, ED awarded 15 new planning grants and five implementation grants.51 With FY2012 funds, ED awarded 17 new grants (ten planning grants and seven implementation grants) for a total of $34.7 million, and reserved remaining FY2012 funds for second-year grants to the five FY2011 implementation grant recipients.52 Race to the Top The Race to the Top (RTT) program was initially authorized in FY2009 under the State Fiscal Stabilization Fund included in the American Recovery and Reinvestment Act (P.L. 111-5). Under the RTT program, which received $4.35 billion in FY2009, competitive grants were awarded to states implementing K-12 reforms in four areas: (1) enhancing standards and assessments; (2) improving the collection and use of data; (3) increasing teacher effectiveness and achieving equity in teacher distribution; and (4) turning around struggling schools. No new funding for RTT was appropriated in FY2010, but the final FY2011 CR (P.L. 112-10) provided $699 million for the RTT.53 Notably, Section 1832 of the final FY2011 CR also gave ED new authority to reserve a portion of its RTT funding for competitive grants to states for the improvement of early childhood care and education. ED used this authority to reserve $500 million for RTT-Early Learning Challenge (RTT-ELC) grants and ultimately awarded grants to nine states.54 The FY2012 appropriations law (P.L. 112-74) provided $549 million for the RTT overall, which is roughly $150 million (-21%) less than FY2011.55 The report language (H.Rept. 112-331) accompanying the FY2012 appropriations law expressed an expectation that the FY2012 RTT competition will include a “robust” early childhood component. ED ultimately reserved $133 million (24% of the FY2012 funds) for RTT-ELC grants, which were later awarded to five states. Tax Provisions Dependent Care Tax Credit (DCTC) The DCTC is a non-refundable tax credit for employment-related expenses incurred for the care of a dependent child under 13 or a disabled dependent or spouse, under Section 21 of the tax code.56 Beginning in tax year 2003, the Economic Growth and Tax Relief Reconciliation Act of 2001 (P.L. 107-16) increased the maximum credit rate to 35% of expenses up to $3,000 for one 49 For more information on these grants, visit http://www2.ed.gov/programs/promiseneighborhoods/index.html. These amounts reflect, respectively, the FY2011 across-the-board rescission of 0.2% required by P.L. 112-10 and the FY2012 the across-the-board rescission of 0.189% required by Division F of P.L. 112-74. 51 Ibid. 52 Department of Education, “Secretary Duncan Announces Seventeen 2012 Promise Neighborhoods Winners in School Safety Address at Neval Thomas Elementary School,” press release, December 21, 2012, http://www.ed.gov/news/press-releases/secretary-duncan-announces-seventeen-2012-promise-neighborhoods-winnersschool-s. 53 The FY2011 amount reflects the across-the-board rescission of 0.2% required by P.L. 112-10. 54 For more information, visit http://www2.ed.gov/programs/racetothetop-earlylearningchallenge/index.html. 55 The FY2012 amount reflects the across-the-board rescission of 0.189% required by Division F of P.L. 112-74. 56 For more information, see CRS Report RS21466, Dependent Care: Current Tax Benefits and Legislative Issues, by Christine Scott and Janemarie Mulvey. 50 Congressional Research Service 17 Early Childhood Care and Education Programs: Background and Funding child (for a credit of $1,050), and up to $6,000 for two or more children (for a credit of $2,100). The 35% rate applies to taxpayers with adjusted gross incomes of $15,000 or less. The rate decreases by one percentage point for each additional $2,000 increment (or portion thereof) in income until the rate reaches 20% for taxpayers with incomes over $43,000.57 Under the FY2013 budget released by the Obama Administration in February 2012, DCTC expenditures were estimated to be $4.2 billion for tax year 2010 (FY2011), $3.4 billion for tax year 2011 (FY2012), and $1.6 billion for tax year 2012 (FY2013).58 Dependent Care Assistance Program (DCAP) Under Section 129 of the tax code, payments made by a taxpayer’s employer for dependent care assistance may be excluded from the employee’s income and, therefore, not be subject to federal income tax or employment taxes.59 The maximum exclusion is $5,000. Section 125 of the tax code allows employers to include dependent care assistance, along with other fringe benefits, in nontaxable flexible benefit or “cafeteria” plans. Under the FY2013 budget released by the Obama Administration in February 2012, DCAP expenditures were estimated to be $840 million in tax year 2010 (FY2011), $1.35 billion in tax year 2011 (FY2012), and $1.58 billion in tax year 2012 (FY2013).60 Programs Funded in Recent Years, But Not Currently Funded The William F. Goodling Even Start Family Literacy Programs (Even Start) Even Start programs, authorized by ESEA Title I, Part B, Subpart 3, were intended to integrate early childhood education, adult basic education, and parenting skills education into a unified family literacy program.61 These programs provided grants to states, which then distributed the funds to eligible entities (consisting of a local education agency (LEA) in collaboration with a community based organization). Even Start services generally served children aged 0-7 and their parents. Even Start services were required to include adult literacy instruction, early childhood education, instruction to help parents support their child’s education, participant recruitment, screening of parents, staff training, and home-based instruction. 57 These provisions were made permanent by the American Taxpayer Relief Act of 2012 (H.R. 8), which was signed into law (P.L. 112-240) by President Obama on January 3, 2013. 58 Office of Management and Budget, Analytical Perspectives, Budget of the U.S. Government, Fiscal Year 2013, February 2012, p. 251, http://www.whitehouse.gov/sites/default/files/omb/budget/fy2013/assets/spec.pdf. Note that the FY2013 budget estimates reflect an Obama Administration proposal to increase the credit for families earning between $15,000 and $103,000 annually. However, the budget proposed to make this provision effective for tax years beginning after December 31, 2012, meaning that the full effects of increasing the credit would likely not be seen until FY2014. 59 For more information, see CRS Report RS21466, Dependent Care: Current Tax Benefits and Legislative Issues, by Christine Scott and Janemarie Mulvey. 60 Office of Management and Budget, Analytical Perspectives, Budget of the U.S. Government, Fiscal Year 2013, February 2012, p. 251, http://www.whitehouse.gov/sites/default/files/omb/budget/fy2013/assets/spec.pdf. Note that, as with the DCTC, certain provisions of DCAP law were made permanent by the American Taxpayer Relief Act of 2012 (H.R. 8), which was signed into law (P.L. 112-240) by President Obama on January 3, 2013. 61 For more information, see CRS Report RL30448, Even Start Family Literacy Programs: An Overview, by Gail McCallion, and CRS Report RL33071, Even Start: Funding Controversy, by Gail McCallion. Congressional Research Service 18 Early Childhood Care and Education Programs: Background and Funding Even Start was first authorized in 1989 and grew rapidly in its first years. However, the program received increasing criticism and saw its funding decline in each year from FY2003 through FY2008, when the Consolidated Appropriations Act of 2008 (P.L. 110-161) provided $66 million for Even Start. Both the FY2009 Omnibus (P.L. 111-8) and the FY2010 Consolidated Appropriations Act (P.L. 111-117) maintained the FY2008 funding level of $66 million for Even Start, though President Obama’s FY2010 budget requested no funding for the program. For FY2011, the President’s budget once again requested no funding for Even Start. The first four continuing resolutions for FY2011 (P.L. 111-242, P.L. 111-290, P.L. 111-317, and P.L. 111-322) temporarily maintained Even Start funding at the FY2010 rate of $66 million. However, the fifth FY2011 CR (P.L. 112-4) provided no funding for Even Start. Likewise, none of the subsequent FY2011 CRs provided funding for Even Start. The FY2012 appropriations law also provided no funding for this program. In advocating for the elimination of Even Start, the Obama Administration had contended that this program had not demonstrated effectiveness in improving child and adult learning outcomes through the integration of the four core services of adult education, parenting education, parentchild activities, and early childhood education. The Administration argued that these conclusions were supported by data from three national evaluations of Even Start. Advocates of continuing Even Start programs argue that the goal of providing integrated family literacy services to an extremely disadvantaged population is so important that these programs should not be eliminated. Furthermore, they argue that a thorough study of the impact of legislatively mandated quality improvements to Even Start is needed, as well as a concerted effort to improve Even Start through implementation of model programs and technical assistance. Early Reading First The Early Reading First program, authorized by ESEA Title I, Part B, Subpart 2, supported local efforts to enhance the school readiness of young children—particularly those from low-income families—through scientific research-based strategies and professional development that are designed to enhance the verbal skills, phonological awareness, letter knowledge, and pre-reading skills of preschool age children.62 The program provided competitive grants to eligible LEAs and to public or private organizations or agencies located in eligible LEAs, with the Department of Education authorized award grants for up to six years. The FY2009 Omnibus (P.L. 111-8) maintained the FY2008 funding level of $113 million for the Early Reading First program. President Obama’s FY2010 budget requested $163 million for the program, an increase of $50 million over FY2009 funding. However, the FY2010 Consolidated Appropriations Act (P.L. 111117) provided no funding for Early Reading First. Instead, Congress incorporated Early Reading First funding into an Expanded Striving Readers Program, intended to serve children from preschool through high school.63 The FY2010 Consolidated Appropriation increased funding for Striving Readers to $250 million (an increase of about $215 million from FY2009) and reserved 62 For more information, see CRS Report RL31241, Reading First and Early Reading First: Background and Funding, by Gail McCallion. 63 Following their authorization in the No Child Left Behind Act of 2001, the largest federal programs exclusively focused on literacy were Reading First for students in grades K-3 and Early Reading First for preschoolers. Reading First was last funded at $393 million in FY2008, but it received funding of approximately $1 billion each year between FY2002 and FY2007. The Early Reading First program, a competitive grant program that was last funded in FY2009, received approximately $100 billion a year in funding between FY2002 and FY2009. The Striving Readers program, which began as a competitive grant literacy program for students in middle school, was refocused on broader literacy programs for pre-K through 12th grade in FY2010; it received funding of $250 million in that year. Congressional Research Service 19 Early Childhood Care and Education Programs: Background and Funding about 15% (or $37.5 million) for children ages 0-5. No funding has been requested for Early Reading First since the FY2010 President’s budget, and no funding has been appropriated for this program since FY2009. No funding has been requested for the current or forthcoming fiscal year. Early Childhood Educator Professional Development The Department of Education has provided competitive grants to partnerships to improve the knowledge and skills of early childhood educators who work in communities that have high concentrations of children living in poverty. Funding in FY2006 and FY2007 remained stable at approximately $14.5 million, but FY2007 was the last year in which funds were appropriated. No funding has been requested for the current or forthcoming fiscal year. Early Learning Fund/Early Learning Opportunities Act Program This HHS program (referred to by both names), authorized by the FY2001 Consolidated Appropriations Act (P.L. 106-554), was last funded in FY2005 at $36 million. When funded, the program provided grants to communities to enhance school readiness for children under five, specifically supporting efforts to improve children’s cognitive, physical, social, and emotional development. Although authorized at $600 million, FY2003 funding for the program was set at $25 million; FY2004 funding was set at $34 million (despite President Bush’s FY2003 budget proposal to eliminate the program); and in FY2005, P.L. 108-199 included $36 million for the Early Learning Fund. FY2005 was the last year in which this program received funding. No funding has been requested for the current or forthcoming fiscal year. Author Contact Information Karen E. Lynch Specialist in Social Policy klynch@crs.loc.gov, 7-6899 Congressional Research Service Gail McCallion Specialist in Social Policy gmccallion@crs.loc.gov, 7-7758 20