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The Child Care Industry Needs More Funding. Why Hasn’t it Gotten Any?

A functioning economy requires functioning child care.

After near-months of the federal government and Trump administration stating that information regarding who received money through the Paycheck Protection Program (PPP) would remain private, the Small Business Administration released data of businesses and firms that got paid over $150,000 in loans. Many companies that received major loans at speed, if by coincidence or not, are owned by Trump donors who had either served in the administration, for PACs supporting him, or for his campaign. In total, these received as much as $273 million.

The companies vary in sector. Foremost Maritime, a business owned by Elaine Chao, the wife of Mitch McConnell and Transportation Secretary, received a loan between $350,000 and $1 million. Kasowitz Benson Torres, for example, a law firm founded by a long-time Trump personal attorney, received between $5 and $10 million. Major restaurant chains like PF Changs and the M Crowd Restaurant group got millions. Private schools and Wall Street firms got bailed out, too.

This only paints a tiny picture of the funds that were passed out through the PPP program. Where the rest of the money went is still unknown. But it points to a damning reality: child care, it so far appears, did not receive the same level of government funds as transportation companies and take-out joints. 

The child care industry desperately needs funding. Before the pandemic hit, roughly 12 million children under five attended some sort of paid child care arrangement. In total, about five million families send their children to daycare daily. Even so, profits were already razor thin, child care workers were underpaid, and costs to run the centers are prohibitive.

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Now, with so many child care facilities closed, the industry is not just struggling but collapsing. In North Carolina, for instance, experts suggest that up to 60 percent of child care centers can’t afford to reopen when the time comes. The same is true in many states across the country — 30 percent of child care centers nationwide are suspected unable to be open if they are closed for as little as three weeks. Consider the pandemic, where child care centers have remained closed for months. 

Even the child care centers that have remained open throughout the pandemic have had limited class sizes to keep up with social distancing measures. Although they are operating, they may be making half as much as they usually are. When — and there will certainly be a when  — state economies across the country begin to rev up in earnest, child care centers will need to open to meet the demand of parents who make up one third of our nation’s workforce. Otherwise, the economy will simply not be able to open in the way that people would like it to.

It’s not as though there aren’t funds to flush into the child care industry. In fact, there’s some $130 billion of leftover PPP funding from the CARES act that remains unspent. The federal government has not yet decided what to do with that money (the stipulation is that companies can apply for PPP loans until August 8). That very same CARES Act, however, only gave $3.5 billion into the child care system in the first place — a paltry percentage of the $660 billion doled out to small businesses. It’s clear that the child care industry should be considered before, say, P.F. Changs.  

Without working child care, you don’t have working people. Luckily, the remaining $130 billion is waiting in the wings. And there are plenty of politicians and lawmakers who have come up with reasonable plans and solutions to help save one of the most vital industries not only to parents but also to the United States Economy as a whole.

A recent Center for Law and Social Policy Report found that the industry only needed $9.3 billion per month to survive the pandemic. Senators Elizabeth Warren and Tina Smith released a plan far that could cover that five months over, arguing that $50 billion would shore up the child care system in both the immediate sense and, because the pandemic is not going away any time soon, the long term. Almost 90 House members asked for double that much money to do the same. 

The problem is not that there isn’t money. The $130 billion in currently un-allocated funding would not only save but protect the industry. More bills can be passed, more separate funding plans released. The problem is the political will. And for as much as Trump wrings his hands and angrily tweets about opening up schools in the fall and the need for child care, if his party doesn’t get behind a comprehensive plan to save the child care industry from total collapse, there will be no way for workers to return to the workforce. Child care is not a luxury. It’s required to have an economy that works. Saving one will save the other.