The NCSL Blog


By Margaret Wile

In a rare showing of bipartisanship, the House passed two bills on July 29—the Child Care Is Essential Act (HR 7027) and the Child Care for Economic Recovery Act (HR 7327).

dad with toddlerThe bills, which now await action in the Senate, would address the shortages of providers and funding for child care due to the COVID-19 pandemic from two distinctly different approaches.

The Child Care Is Essential Act would create a $50 billion Child Care Stabilization Fund within the Department of Health and Human Services’ (HHS) Child Care Development Block Grant program. This newly created fund would provide grants to child care providers who are open or temporarily closed due to COVID-19. If passed, the funding would be available until Sept. 30, 2021, and would be based on average operating costs before the pandemic while accounting for additional costs associated with the crisis.

On the other hand, the Child Care for Economic Recovery Act includes a number of child-care-related tax reforms, including making the child and dependent care tax credit available to more low- and middle-income families, expanding the employee retention tax credit, creating a new 30% refundable payroll tax credit for eligible employees whose dependent care benefits are paid by employers, and doubling the amount that can be contributed to dependent care flexible spending accounts.

This bill would appropriate additional funds to several child care and dependent care programs, including:

  • $850 million to the Social Services Block Grant for essential workers to access child care and adult day care.
  • $10 billion in grants for the Child Care Development Fund.
    • This additinal funding would be given annually until 2024 to make safety and infrastructure improvements for child care facilities.
    • It would require HHS to conduct an inventory of the structural challenges facing child care in the states and territories.

In addition, the bill would allow for federal funding for the Child Care Entitlement to States without a state match up to $10 billion annually until 2024.

Both bills await action as Congress continues to debate the best ways to address the pandemic before it adjourns for the summer.

Margaret Wile is a policy director in NCSL’s Health and Human Service Program in NCSL’s State-Federal Relations Division. 

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About the NCSL Blog

This blog offers updates on the National Conference of State Legislatures' research and training, the latest on federalism and the state legislative institution, and posts about state legislators and legislative staff. The blog is edited by NCSL staff and written primarily by NCSL's experts on public policy and the state legislative institution.