INSIGHTi
COVID-19: Child Care Grants in H.R. 7027
and H.R. 7327
July 22, 2020
The Coronavirus Disease 2019 (COVID-19) pandemic has raised questions related to the fragility of the
child care market and the child care needs of working families. Monthly data from the Bureau of Labor
Statistics suggest that the number of child care workers dropped by roughly one-third between March and
April 2020, with the number of workers stil down by about 22% in June. According to one survey fielded
from March 31 to April 4, a majority of parents reported their child care provider had closed or was
limiting hours or spaces due to COVID-19. Nearly half of respondents were somewhat or very concerned
their provider would not re-open. Other estimates suggest that demand for child care among essential
workers may exceed supply.
Congress and the President have already enacted several child care-related provisions as part of the
federal COVID-19 response. In addition, Congress has continued to debate the need for further legislation
to provide more or different federal support, introducing a number of bil s that touch on these issues. On
July 17, the House Rules Committee ordered reported a special rule (H.Res. 1053) to provide for House
floor consideration of two such bil s (H.R. 7027 and H.R. 7327).
Previously Enacted Legislation
The Coronavirus Aid, Relief, and Economic Security Act (CARES, P.L. 116-136) and the Families First
Coronavirus Response Act (FFCRA, P.L. 116-127) each included child care-related provisions.
The CARES Act appropriated $3.5 bil ion in supplemental discretionary funding for the Child Care and
Development Block Grant (CCDBG). These funds were in addition to FY2020 annual appropriations of
$5.8 bil ion. The CCDBG provides formula grants to states, territories, and tribes to subsidize the cost of
child care for low-income working families, as wel as for other activities (e.g., improving the quality and
availability of care). The CARES Act waived some underlying requirements of the Child Care and
Development Block Grant Act, such as specifying that funds may be used to provide child care assistance
to essential workers regardless of their income. (Federal law typical y limits eligibility to those with
incomes at or below 85% of the state median income, though most states set limits below the federal
threshold.)
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The FFCRA included a provision that effectively decreased by 6.2 percentage points the amount of
matching funds a state must contribute to claim its full federal match al otment from the Child Care
Entitlement to States (CCES). The CCES is a capped entitlement, currently funded at $2.9 bil ion for
FY2020. At the state level, CCES funds are general y integrated with funds from the CCDBG and spent
according to CCDBG Act rules.
Additional y, child care providers and families may benefit from other broad-based provisions in enacted
COVID-19 response bil s (e.g., Paycheck Protection Program, Paid Family and Medical Leave).
Child Care Is Essential Act (H.R. 7027)
This bil would provide $50 bil ion in supplemental discretionary CCDBG funding for states, territories,
and tribes to provide “stabilization grants” to child care providers. Child care providers could use these
funds to cover various costs necessary to maintain or resume operations. If enacted, this would represent
an increase of 536% from the $9.3 bil ion in discretionary FY2020 CCDBG funding provided thus far
($5.8 bil ion regular, plus $3.5 bil ion supplemental).
The funds would general y be al otted via the statutory CCDBG formula, then used to make subgrants to
qualified child care providers to “support the stability of the child care sector during and after the
COVID-19 public health emergency.” The subgrant amounts would be based on the provider’s average
operating expenses prior to the pandemic. At a minimum, the subgrants are intended to cover operating
expenses for the grant period, with adjustments for costs associated with COVID-19 (e.g., social
distancing, sanitization) and other payments received from the CCDBG, Head Start, or the Paycheck
Protection Program.
To receive a subgrant, a child care provider would have to be eligible for the CCDBG. In addition, the
provider must have been in operation on or before March 1, 2020. Providers would be required to certify
that their operations had been affected by COVID-19 and offer assurances related to program operations.
Providers could use these funds for costs such as employee benefits and salaries (including premium pay),
rent or mortgages, utilities, insurance, sanitization and cleaning, personal protective equipment, training
in health and safety practices, service modifications related to COVID-19 (e.g., limiting group sizes,
adjusting staff-to-child ratios), mental health services, and other necessary goods and services.
Child Care for Economic Recovery Act (H.R. 7327)
This bil would provide a one-time mandatory appropriation of $850 mil ion to support family care for
essential workers. These funds could be used for child care, adult care, or adult protective services needed
by dependents or household members of essential workers. These funds would be provided through the
Social Services Block Grant (SSBG), a flexible funding stream providing formula grants to states and
territories. The bil would temporarily raise the SSBG funding cap to accommodate these funds.
In addition, the bil would increase mandatory appropriations for the CCES from $2.9 bil ion to $10
bil ion for each of FY2020 through FY2024. These funds would be distributed to states and tribes,
consistent with current law. For FY2020 and FY2021, the bil would effectively waive the state match
requirement for the new funds (i.e., amounts beyond $2.9 bil ion) for states that contributed the necessary
matching funds to receive their maximum federal al otments from the initial $2.9 bil ion.
The bil would provide a one-time discretionary appropriation of $10 bil ion to the CCES for
infrastructure grants to improve child care safety. The funds would remain available over a five-year
period (FY2020-FY2024), supporting immediate and long-term needs assessments, as wel as facility
grants to states, territories, and tribes. The funds could be used to acquire, construct, renovate, or improve
child care facilities, including adapting facilities to respond to COVID-19.

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The bil also includes several child care-related tax provisions that are beyond the scope of this Insight.


Author Information

Karen E. Lynch
Conor F. Boyle
Specialist in Social Policy
Analyst in Social Policy





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