[Senate Hearing 118-201]
[From the U.S. Government Publishing Office]


.                                                      S. Hrg. 118-201

                     SOLVING THE CHILD CARE CRISIS:
                      MEETING THE NEEDS OF WORKING
                    FAMILIES AND CHILD CARE WORKERS

=======================================================================

                                HEARING

                                 OF THE

                    COMMITTEE ON HEALTH, EDUCATION,
                          LABOR, AND PENSIONS

                          UNITED STATES SENATE

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             FIRST SESSION

                                   ON

 EXAMINING THE SOLVING THE CHILD CARE CRISIS, FOCUSING ON MEETING THE 
            NEEDS OF WORKING FAMILIES AND CHILD CARE WORKERS

                               __________

                              MAY 31, 2023

                               __________

 Printed for the use of the Committee on Health, Education, Labor, and 
                                Pensions
                                
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        Available via the World Wide Web: http://www.govinfo.gov
        
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                   U.S. GOVERNMENT PUBLISHING OFFICE                    
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          COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS

                 BERNIE SANDERS (I), Vermont, Chairman
PATTY MURRAY, Washington             BILL CASSIDY, M.D., Louisiana, 
ROBERT P. CASEY, JR., Pennsylvania       Ranking Member
TAMMY BALDWIN, Wisconsin             RAND PAUL, Kentucky
CHRISTOPHER S. MURPHY, Connecticut   SUSAN M. COLLINS, Maine
TIM KAINE, Virginia                  LISA MURKOWSKI, Alaska
MAGGIE HASSAN, New Hampshire         MIKE BRAUN, Indiana
TINA SMITH, Minnesota                ROGER MARSHALL, M.D., Kansas
BEN RAY LUJAN, New Mexico            MITT ROMNEY, Utah
JOHN HICKENLOOPER, Colorado          TOMMY TUBERVILLE, Alabama
ED MARKEY, Massachusetts             MARKWAYNE MULLIN, Oklahoma
                                     TED BUDD, North Carolina

                Warren Gunnels, Majority Staff Director
              Bill Dauster, Majority Deputy Staff Director
                Amanda Lincoln, Minority Staff Director
           Danielle Janowski, Minority Deputy Staff Director
                            
                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                        WEDNESDAY, MAY 31, 2023

                                                                   Page

                           Committee Members

Sanders, Hon. Bernie, Chairman, Committee on Health, Education, 
  Labor, and Pensions, Opening statement.........................     1

Cassidy, Hon. Bill, Ranking Member, U.S. Senator from the State 
  of Louisiana, Opening statement................................     3

                               Witnesses

Groginsky, Elizabeth, Cabinet Secretary, New Mexico Early 
  Childhood Education and Care Department, Santa Fe, NM..........     6
    Prepared statement...........................................     8
    Summary statement............................................    15

Hogan, Lauren, Managing Director of Policy and Professional 
  Advancement, National Association for the Education of Young 
  Children, Washington, DC.......................................    16
    Prepared statement...........................................    18
    Summary statement............................................    22

Morman, Cheryl, Family Child Care Provider and President of the 
  Virginia Alliance for Family Child Care Associations, Richmond, 
  VA.............................................................    23
    Prepared statement...........................................    25
    Summary statement............................................    27

Lukas, Carrie, President, Independent Women's Forum, Washington, 
  DC.............................................................    28
    Prepared statement...........................................    29
    Summary statement............................................    32

Larin, Kathryn, Director in Education, Workforce, and Income 
  Security, Government Accountability Office, Washington, DC.....    33
    Prepared statement...........................................    35

                          ADDITIONAL MATERIAL

Sanders, Hon. Bernie:
    Letter from stakeholders outlining childcare priorities......    66
Cassidy, Hon. Bill:
    On behalf of Senator Mullin, articles submitted for the 
      Record.....................................................70-105
Larin, Kathryn:
    Written testimony including tables and charts, submitted for 
      the Record.................................................   106

 
                     SOLVING THE CHILD CARE CRISIS:
                      MEETING THE NEEDS OF WORKING
                    FAMILIES AND CHILD CARE WORKERS

                              ----------                              


                        Wednesday, May 31, 2023

                                       U.S. Senate,
       Committee on Health, Education, Labor, and Pensions,
                                                    Washington, DC.

    The Committee met, pursuant to notice, at 10:02 a.m., in 
room 430, Dirksen Senate Office Building, Hon. Bernard Sanders, 
Chairman of the Committee, presiding.

    Present: Senators Sanders [presiding], Murray, Casey, 
Baldwin, Kaine, Hassan, Smith, Lujan, Hickenlooper, Cassidy, 
Murkowski, Braun, Marshall, Tuberville, Mullin, and Budd.

                  OPENING STATEMENT OF SENATOR SANDERS

    The Chair. Let's get this show on the road. The Senate 
Committee on Health, Education, Labor, and Pensions will come 
to order. And let me begin by thanking all of our panelists for 
being here for what will be, I think, a very important 
discussion for tens of millions of families in this country.

    As a Nation, we often talk about family values and how much 
we love our children, but unfortunately, we have a funny way of 
showing that love. In America today, we have the highest rate 
of childhood poverty of almost any major country on earth.

    We have, as we will be discussing today, a broken and 
dysfunctional childcare system. It is no great secret that the 
psychologists tell us that the most important years of human 
intellectual and emotional development are 0 through 4.

    That is what the psychologists tell us. Yet there are very 
few people, I think, who will come to the conclusion in this 
country that we provide our youngest children with the kind of 
love and care and attention that they need, and that really is 
disgraceful. The young people are the future of America and in 
many ways we have turned our backs on them.

    We are the richest country in the history of the world, and 
there is no excuse, if we got our priorities right, why we 
should not be providing the highest quality of childcare for 
the little ones and to ease problems for their parents.

    Again, I don't have to tell anybody who is here that in 
America today the cost of childcare for a variety of reasons is 
outrageously high and unaffordable to millions and millions of 
working class and middle class families. In Vermont, which I 
think it is about the national average, it is about $15,000.

    Here in D.C. as your staff will tell you, if you have any 
kids who have staff--if you have any staff who have children, 
they will tell you, you know what childcare is in D.C.? It is 
about $30,000 a year, which is very, very high. Imagine, 
$30,000 a year if you have got a 2-year old. And how can a 
working-class family, people that make $50,000, $60,000, 
$70,000 a year, afford to spend $15,000 a year on childcare or 
even more?

    The result of that is that according to a recent survey, 40 
percent of parents in America have gone into debt due to the 
cost of childcare, and nearly 30 percent of how to make 
unacceptable choices of paying for childcare or paying their 
rent or mortgage. In other words, you want to have a kid in 
America, and you are working class, well, we are going to make 
you pay for that boy. You are going to go deeply in debt.

    Thank you for having a child. Not exactly what I think we 
should be doing as a Nation. All over--not only is the cost of 
childcare outrageously high, for families in most parts of this 
country, it is very, very difficult to find a slot.

    I will not surprise anybody on this Committee because you 
have all heard the story, people get pregnant and the first 
thing they do is call up a childcare center, a place trying to 
find a spot, and they are told, well, wait maybe, but in all 
likelihood you will be on a waiting list.

    The other point that I would make is not only that child 
care is terribly expensive, not only that is that there are not 
enough slots, if we appreciate the kids and we understand how 
important care is for the little kids, obviously, the 
conclusion is you are going to respect the people who work with 
the children, who you can argue are some of the most important 
work in America, nurturing the little children, and yet we are 
paying in this country those workers outrageously low wages.

    We are paying them starvation wages. And we are talking 
about paying people $13, $14 an hour, and the result of that is 
tens of thousands of people are leaving the profession. They 
could make more working in McDonald's than they can nurturing 
our little children. And the last point that I would make is 
you think this is just about the little children and you think 
it is about the parents, you are wrong.

    It is also about the economy, all right. Now, nobody has 
the exact numbers, but I have heard that there are at least 
many, many hundreds of thousands of people, mostly women, who 
would like to enter the workforce, they can't because they 
cannot find quality, affordable childcare.

    Now, we made progress in the American Rescue Plan.

    Finally, the U.S. Congress said we appreciate our children. 
We appreciate our workers. We appreciate our parents. We are 
going to do something about it. And we significantly increased 
funding for childcare, not enough, but we made some progress. 
And right now, though, we are at a precipice where that funding 
may disappear.

    That funding kept over 200,000 childcare providers in 
business, sustained childcare for nearly 10 million kids, and 
prevented 1 million childcare workers from losing their jobs. 
According--that is the good news. The bad news is that if 
Congress does nothing, this funding will expire on September 
30th of this year, making a very bad situation worse. We cannot 
afford to allow that to happen.

    We need to renew that vital funding. But let us be clear, 
that is not all we need to do. We need a vision--for all those 
of the family values, we need a vision for the future, which 
understands that every family in America has the right to high 
quality, affordable childcare, that childcare workers deserve 
decent pay for the important work that they do, and that we 
must expand the number of childcare programs available so that 
anybody in America can get the quality care they need.

    I look forward to working with all of my colleagues on this 
Committee to make that a reality.

    With that, let me recognize Senator Cassidy.

                  OPENING STATEMENT OF SENATOR CASSIDY

    Senator Cassidy. Thank you, Senator Sanders. Childcare 
obviously is too expensive for those who need it, but I think 
it is important to note that it has become more expensive as we 
have pumped more Federal dollars into it--it is kind of odd.

    I am a doctor. It always says in health care as a doctor, 
don't just do something, think. We can throw a lot more money 
at it and see what happens. Why don't we sit and think? I will 
point out that we can agree that childcare is important for 
working families, but what Republicans will disagree with, at 
least this Republican, is that more Government and more of the 
kind of spending that Congressional Democrats are promoting is 
the solution.

    Let's think about that. I will note that after failing to 
convince Americans that their childcare overhaul in the Build 
Back Better plan was a good idea, Democrats are promoting 
additional Federal dollars under the guise of a crisis--a 
crisis. We will talk about that.

    This Committee does oversee, by the way, right now the 
Childcare and Development Block Grant, which is the primary 
Federal program providing childcare assistance to low income 
working families through a voucher program which retains 
parental choice. My Democratic colleagues are proposing to 
completely overhaul this block grant program and create a 
Government run childcare system.

    This is despite a 2022, like last year, report by the 
Bipartisan Policy Center that found that 57 percent of parents 
who currently use informal childcare preferred informal 
childcare over formal childcare centers, even if the formal 
care was free and conveniently located.

    A one size fits all model of institutional childcare with 
massive Federal spending doesn't seem to match what parents 
want or what working families need. I will also note, by the 
way, the irony is not lost on anyone that we are days away from 
the Federal Government theoretically defaulting on its debt and 
we are discussing, among other things, an additional $600 
billion to spend on a Government run institutionalized 
childcare system.

    Let's think about this. Now, by the way, we spoke of a 
crisis. The plan comes in response to a crisis of its own 
making as Democrats flooded the childcare industry with $39 
billion in what was supposed to be short term COVID-19 
spending.

    There is $18 billion that have still not been spent. The 
Department of Health and Human Services had to grant 9 states, 
4 territories, and 82 tribes waivers going back to 2019 because 
they haven't been able to spend their money on time. I would 
also like to point out that the Government Accountability 
Office, which is our official sources of information, cannot 
tell us how the childcare funding is being used. And 
anecdotally, there are stories of the money not being used 
well.

    For example, I have heard that it is not being used in the 
direct operation of running the childcare center, but on 
ancillary issues which are quite peripheral to actually 
providing childcare. I look forward to hearing from HHS and GAO 
about what they found. And we need this information. We can 
say, oh my gosh, let's spend a whole lot more money. There is a 
crisis. Oh, we have got to do something.

    It is very emotional. But we don't know how the money is--
and there is $18 billion out there and we don't know how the 
money that has been spent, has been spent. We should have this 
information to understand the scope and to make an informed 
decision about potential legislation. It kind of blows my mind 
that we would dramatically increase funding without knowing how 
the existing funding is being spent.

    Just think about that. $18 billion left to be spent, we are 
going to dramatically increase funding, and we don't know how 
the money that we have already put out there has been spent. 
Now, keep in mind that the massive, unchecked spending is how 
this crisis was created. And now we are told that the crisis 
can only be solved with even more massive Federal takeover of 
policy and funding, in some cases, removing parental choice.

    Now, if there is one thing we learned during the COVID-19 
pandemic, parents want to be involved. This Committee should 
make it easier for Americans to pick the best childcare option 
for their family, not financially coerce them into a Federal 
Government run institution. And by the way, we have seen this 
movie before. As For example, student loans.

    As more Federal assistance went toward student loans, the 
cost of higher education skyrocketed. And now we are to the 
point where we have got to forgive a lot of student loans 
because, I could keep going but you know what my point is.

    I will also point out that as--as pointed out by a man 
named Matthew Desmond in his book, ``Evicted. Poverty and 
Profit in the American City'', when the Federal Government 
threw additional money in housing programs, the funding was 
largely swallowed up by a bureaucracy in charge, rather than 
actually meeting those with--those in need on the ground. I 
will point out Mr. Desmond, I am sure, would self-identify as a 
liberal.

    He is writing about a need to further address poverty. 
There is nothing in here that would suggest he is a 
conservative. There is a lot in there to say that he has looked 
at how we spent money and it grows the bureaucracy and it 
doesn't meet the needs of those on the ground. Let's just not 
do something, let's think.

    Now, when we speak about making childcare affordable 
through Federal assistance, we have to make sure that we are 
not worsening the very problem we wish to solve or fueling an 
ever-exploding cost that gets transferred onto the backs of 
taxpayers. And by the way, it is worth repeating, there are 
still billions of unspent dollars to address childcare through 
the end of next Fiscal Year.

    I will point out this is an incredibly important issue, but 
there are billions to address it through the end of the next 
Fiscal Year, and we are having this hearing when there are nine 
different health care re-authorization--health care, health 
care reauthorizations waiting before this Committee that will 
expire in September if we do not address them. To be more 
specific, the Committee has not formally considered bipartisan 
text, let alone marked up any of them.

    If these are not addressed before August recess, that means 
we will have less, which means we have less than 2 months to do 
nine reauthorizations, it will not happen. And this is a basic 
responsibility of the Committee, and the lack of progress 
toward accomplishing this basic responsibility is concerning.

    Now, childcare is an incredibly important issue, but we 
have nine crucial health care reauthorizations set to expire in 
September. Hopefully the June calendar for this Committee will 
prioritize getting those done. Let me finish. I thank the 
witnesses for being here. They care deeply about affordable 
childcare.

    What the American people need to know is why this is going 
to be different than all the other patterns like higher 
education and health care and other areas where increased 
Federal spending has done little to improve quality or cost, 
and in many instances has done the opposite.

    We want affordable childcare. We don't want more 
bureaucracy and more Government spending that is wasted. With 
that, I yield.

    The Chair. Let me now turn to Senator Lujan, who will 
introduce our first witness, who is Secretary Elizabeth 
Groginsky of New Mexico.

    Senator Lujan. Thank you, Mr. Chairman, and to our Ranking 
Member for holding today's hearing. And thank you to all of our 
witnesses for being here today. As a Head Start alumnus, I know 
the value of high-quality early childhood education and believe 
that Congress should be strengthening its support for childcare 
in this country, not taking steps backward.

    It might surprise you there is only two sitting U.S. 
Senators that went to Head Start. I am proud to be one of them. 
I am incredibly grateful to welcome our Secretary, Elizabeth 
Groginsky, and who is our cabinet Secretary for the Early 
Childhood Education Department from New Mexico.

    Now, just 4 years ago, a report came out from the Annie E. 
Casey Foundation, which is an annual report called Kids Count, 
measuring student well-being and success across the country. We 
are very thankful in our state that our Governor, Michelle 
Lujan Grisham, stepped forward, and she initiated something 
that was important for us back in New Mexico, and I think an 
example across the country, where we are now one of a few 
states, including Alabama, Connecticut, Georgia, Massachusetts, 
and Washington, to do this.

    What our Governor did was she created a new cabinet 
secretary position and a new state agency in 2019 to put 
programs of children 0 to 5 under one roof. Secretary Groginsky 
answered the call, and she is our first cabinet secretary for 
early childhood education in this capacity and helping families 
and helping children in New Mexico.

    Now, thanks to the flexibility baked into the Federal 
childcare assistance and the amount provided, New Mexico was 
able to make significant steps in improving and helping 
children, but improving the system that we have in our state.

    Secretary Groginsky is here to share her story of how 
transformational these one-time investments were, but also to 
emphasize that they are worth sustaining. It is critical for 
Congress to look at what worked with the pandemic, with this 
investment, helping kids, and how we made a difference in 
people's lives, and for the Committee to come together to 
restart the bipartisan conversations as well.

    I want to thank and welcome our secretary, and I want to 
say thank you for being here to help share your story. Thank 
you,

    Mr. Chairman.

    The Chair. Secretary Groginsky, the floor is yours.

STATEMENT OF ELIZABETH GROGINSKY, CABINET SECRETARY, NEW MEXICO 
  EARLY CHILDHOOD EDUCATION AND CARE DEPARTMENT, SANTA FE, NM

    Ms. Groginsky. Thank you, Senator Lujan. Good morning, 
Chairman Sanders, Ranking Member Cassidy, and Members of the 
Committee. Thank you for inviting me to testify about New 
Mexico's success toward building a high quality, equitable, and 
affordable early childhood system that supports families' needs 
by delivering early education and care for young children 
during their years of most critical and rapid development.

    As an aunt of 18 beautiful nieces and nephews, a great aunt 
of 19, and in my role as Cabinet Secretary, I know firsthand 
the struggles and joys of working families and childcare 
providers. Today, I will discuss how New Mexico transformed 
childcare to support families, improve children short and long 
term outcomes, and increased and strengthen the childcare 
workforce that cares for and educates them.

    These actions, taken together, ultimately fuels the economy 
today and into the future. Our state has a unique historical 
context, diverse cultures and languages with families and 
traditions going back many hundreds of years. We are shaped by 
23 sovereign tribes, pueblos, and nations, which comprise 11 
percent of our population and a 49 percent Hispanic population, 
a great diversity which contributes to the depth and the beauty 
of our state.

    Despite these strengths, New Mexico has struggled for 
generations to realize its potential. The reasons for this are 
complex, many rooted in historical inequities. Under the 
leadership of our Governor, Michelle Lujan Grisham, New Mexico 
has pursued a bold, transformational vision.

    Like every other state, New Mexico's childcare industry was 
on the brink of collapse during the early months of the 
pandemic. Providers' enrollment and revenues plummeted, 
exacerbating challenges in recruiting and retaining staff. 
Fortunately, the Federal Government recognized that childcare 
is crucial to families and local economies and made historic 
investments in the industry.

    Amidst this crisis, New Mexico identified an opportunity 
with these Federal funds to stabilize and remake the foundation 
of the state's childcare industry. Critical to the success of 
this Federal funding was its flexibility. Because of this 
flexibility, New Mexico could be nimble and creative with these 
funds and preserve the mix delivery system that gives families 
the choices they want and need.

    With this support, the state established groundbreaking 
initiatives and policy changes. First, we stabilized the 
industry to ensure access to high quality education. New 
Mexico's low point in childcare capacity came in February 2021, 
when 15 percent of pre-pandemic capacity had been eliminated.

    We acted swiftly, distributing over $163 million in 
federally funded grants to more than 1,000 childcare providers, 
allowing more programs to reopen and stay open. Providers 
reported that these stabilization grants saved their businesses 
and allowed them to emerge from the pandemic even stronger than 
before.

    Second, we improved the long-term viability of the 
workforce and supported parent choice through childcare 
assistance rates that reflect the true cost of care. New Mexico 
became the first state in the Nation, along with D.C., to use a 
federally approved alternative cost model to inform and 
determine subsidy rates.

    Most states use a traditional market rate study which sets 
rates based on what providers are charging parents. This method 
is flawed because childcare tuition remains artificially low 
due to families' inability to afford the full cost of quality 
care. Tuition stays low to keep families from being priced out, 
so provider revenues and wages remain low.

    New Mexico's cost model approach allows childcare providers 
to increase their employees? compensation, have a healthier 
business bottom line, and we can serve more children. Third, 
New Mexico strengthened families by significantly expanding 
eligibility and waiving parent co-payments.

    The state increased our income eligibility to 400 percent 
of the Federal poverty level and waived all family co-payments. 
This has been a game changer for working families who routinely 
spent a third of their income on childcare. Relieved of this 
crippling financial burden, working families can now better 
afford rent, mortgage, food, transportation, health care, and 
other activities that improve their families' stability, 
security, and well-being.

    Fourth, the state expanded childcare supply and access. 
Like most states, New Mexico has a long-standing shortage of 
childcare supply. To address this, the state allocated over $11 
million in ARP stabilization administration funds to 37 
grantees, with a capacity increasing capacity by 1,200.

    Finally, we advanced the diverse, well-compensated, and 
credentialed early childhood workforce. We used the relief 
funds to give a $1,500 recruitment bonus, $3 an hour raises. We 
have also invested in free college supports for advanced 
credentials. In closing, public investment and leadership makes 
a difference.

    The relief funds equipped our state to transform our 
childcare industry. Today, New Mexico leads the Nation in early 
childhood investment and innovation and is a roadmap for other 
states looking to make similar changes. However, continued 
Federal investment is necessary to maintain the 
transformational gains in states.

    New Mexico is proof of the enormous impact that a 
significant Federal investment can have on children, families, 
and their communities. An investment in quality childcare is an 
investment in a more vibrant and secure future for our Country.

    Learning from the extraordinary Federal early childhood 
investments made during the pandemic, I urge the Members of 
this Committee, Congress, and the Federal Administration to 
maintain these investments and commit to a long-term state 
funding strategy that sustains the significant advancements we 
and others have made.

    Thank you for your time and this opportunity to share New 
Mexico's experience and vision for the future of our children.

    [The prepared statement of Ms. Groginsky follows:]

               prepared statement of elizabeth groginsky
    Chairman Sanders, Ranking Member Cassidy and Members of the Senate 
Health, Education, Labor, and Pensions Committee, thank you for 
inviting me to testify today about New Mexico's success toward building 
a comprehensive, high-quality, equitable, and affordable early 
childhood system that supports families' needs by delivering high-
quality early education and care for young children during their years 
of most critical and rapid development. In New Mexico, this system 
translates into state policies that expand, fund, and continuously 
improve child care, preschool, Head Start, home visiting, and early 
intervention, in a coordinated approach, to support positive outcomes 
for families and young children.

    As an aunt of 18 beautiful nieces and nephews, a great aunt of 19, 
and in my role as Cabinet Secretary, I know firsthand the struggles and 
joys of working families and child care providers.

    In my testimony today I will discuss how New Mexico's approach has 
transformed child care policies to support families today, improved 
children's short-and long-term outcomes, and increased and strengthened 
the child care workforce that cares for and educates them, which helps 
us respect and ensure parent choice. These actions taken together 
ultimately fuels the overall economy of our state today and into the 
future.

    After providing a brief New Mexico context, I will describe our 
widespread and significant child care reforms and their impacts: 
expanding access by significantly increasing families' eligibility; 
improving affordability by eliminating parent copayments; paying for 
the actual cost of quality care; making large fiscal investments; 
elevating state governance; and realizing the immense benefits of 
Federal relief funding.

    New Mexico's child care transformation began in July 2021 when the 
state increased child care assistance rates to reflect the true cost of 
care using a federally approved cost estimation methodology and then 
equally important, we expanded eligibility for families to 400 percent 
of the Federal Poverty Level (FPL) and waived copayments for families. 
These important policy changes, made by the Governor, helped stabilize 
and improve the quality and supply of child care throughout the state. 
Other New Mexico workforce improvement policies include better 
compensation of early childhood professionals and supporting best 
practices for child care businesses.

    In making effective changes to the state's early childhood system, 
it is essential to appreciate New Mexico's unique historical context, 
diverse cultural and linguistic heritage, with close knit communities 
and families with traditions going back many hundreds of years. Our 
state is shaped by 23 sovereign Native American Tribes, Pueblos, and 
Nations--each with their own unique languages, histories, and 
traditions and comprise 11 percent of the total state population along 
with a 49 percent Hispanic population, a great diversity which 
contributes to the depth and beauty of our state.

    Despite these strengths, New Mexico has struggled for generations 
to realize its potential. The reasons for this are complex, and many 
are rooted in historical inequities, but under the leadership of our 
Governor, Michelle Lujan Grisham, New Mexico has pursued a bold, 
transformational vision for a state where all New Mexico families 
thrive.

    First, I want to focus on our advances in financing and in 
governance. For the last decade, New Mexico advocates have supported 
greater investment in the state early childhood system, recognizing 
that providing comprehensive family supports and a strong foundation 
for children's learning and growth are essential for improving outcomes 
for young children in our state. Governor Lujan Grisham made early 
childhood education and care a cornerstone of her policy agenda, and in 
2019 New Mexico created one of the first cabinet-level early education 
and care departments in the Nation. Aligning all of New Mexico's early 
childhood programs and services under one agency has been critical for 
all the state policy improvements and was instrumental in helping us 
successfully navigate the COVID-19 crisis.

    In the Governor's second year, she proposed an Early Childhood 
Trust Fund using excess state revenues to increase funding for early 
childhood programs, which was enacted with bipartisan support from the 
New Mexico Legislature. And now this past year, the voters approved a 
constitutional amendment for dedicated funding for early childhood 
education. I'll come back to this key issue of revenue as I close out 
my testimony.

    Like every other state, New Mexico's child care industry found 
itself on the brink of total collapse during the early weeks and months 
of the pandemic. Child care providers' revenues plummeted along with 
lower enrollment, which exacerbated existing challenges in recruiting 
and retaining qualified child care professionals. Added health and 
safety costs ate away at already razor thin margins. COVID exposed how 
fragile and fractured the child care model in America already was.

    Fortunately, the Federal Government recognized how crucial child 
care is to families, young children, and local economies, and made 
historic investments in the industry through the distribution of more 
than $400 million in Federal relief funding to New Mexico. Amidst this 
crisis, New Mexico identified an opportunity--with the resources 
available through these Federal funds--to stabilize and remake the 
entire foundation of the state's child care industry. We did this by 
improving the sustainability of the business model, increasing 
compensation for the child care workforce, expanding access and 
affordability for families, and enhancing the quality of education and 
care for children.

    A critical component for the success of this funding was the 
flexibility the Federal Government provided to states. The fundamental 
nature of the COVID-19 emergency demanded that Federal relief funds be 
distributed with all possible haste to avoid collapse of the already 
fragile child care industry under the extraordinary strains caused by 
the pandemic. These Federal funds included CARES (Coronavirus Aid 
Relief and Economic Security) Act, CRRSA (Coronavirus Response and 
Relief Supplemental Appropriations) Act, and ARPA (American Rescue Plan 
Act). With this funding, states were empowered to respond to the unique 
needs of their early childhood systems and the families, children, and 
communities that they served. Because of this flexibility, New Mexico 
was able to be nimble, decisive, and creative with how it maximized 
these funds, while preserving the mixed delivery system that gives 
families the choices they need. With this support, the state embarked 
on a series of groundbreaking policy changes, which I discuss below.
  Stabilize the child Care Industry to Ensure Access to Quality Early 
                           Care and Education
    New Mexico's low point in child care capacity came in February 
2021, when 15 percent of pre-pandemic child care capacity had been 
eliminated. The state, however, acted swiftly, distributing over $163 
million in grants later that year to more than 1,100 child care 
providers, allowing many programs to reopen or stay open, provide 
raises and bonuses to staff, and make improvements to their 
infrastructure and learning environments. Providers reported that these 
stabilization grants not only kept their businesses afloat but allowed 
them to emerge from the pandemic even stronger than before. New Mexico 
has in fact more licensed child care capacity than before the pandemic 
and has nearly as many facilities (Table 1).

              Table 1. Licensed Child Care Capacity in New Mexico Throughout the COVID-19 Pandemic
----------------------------------------------------------------------------------------------------------------
                                                                                                Difference 2020-
                       March 2020         March 2021         March 2022         March 2023            2023
----------------------------------------------------------------------------------------------------------------
Total Licensed             61,601             53,301             59,565             63,233             +1,632
               Capacity
----------------------------------------------------------------------------------------------------------------
Total Licensed                994                847                937                983                -11
     Facilities
----------------------------------------------------------------------------------------------------------------


    After an initial spike in child care assistance enrollment when 
schools were closing in March 2020, enrollment began to drop. When 
Federal pandemic relief funding arrived in March 2021, enrollment 
improved and child care programs were able to support more children in 
care. Enrollment is now increasing rapidly, by more than 300 families 
per month. Currently, 42 percent of New Mexico's licensed capacity is 
supported by the state's child care assistance program.
     Chart 1. Number of Children Enrolled in New Mexico Child Care 
                   Assistance Dec. 2019 to April 2023


    While our providers are not with me today, they have shared with me 
with their experiences about the impact of this support:

    In 2022, ECECD leveraged its Federal relief funding along with 
Grant County Federal relief funding to support a local provider in 
Silver City, NM in preserving critical child care capacity for the 
community \1\. El Grito del Bosque Early Learning Center now provides 
care for up to 56 children from 6 weeks to 3 years of age. The center 
was set to permanently close, depriving Silver city of one of the only 
child development centers that served infants and toddlers and 
stranding dozens of families without child care.
---------------------------------------------------------------------------
    \1\  https://www.nmececd.org/2022/04/08/ececd-grant-helps-expand-
child-care-capacity-in-silver-city

          Misty Pugmire El Grito Director, Silver City, NM: ``Keeping 
        this child care center open means so much to the families of 
        Silver City. This is what is possible when the whole community 
        comes together to support early education and care. Rather than 
        losing this resource, we have created a beautiful space where 
        babies and young children in Grant County can learn and grow 
---------------------------------------------------------------------------
        for generations.''

          Connie Coates, office manager and treasurer at Canyon 
        Christian Academy in Alamogordo, NM: ``The stabilization grant 
        has been a great blessing. The funding we received made it 
        possible for us to hire a full-time classroom aide to help in 
        our preschool, allowing for more individualized attention to 
        better focus on each students' needs.''

          Jennifer Salinas, director of the Early Learning Center at 
        Kaune in Santa Fe, NM: ``We've been able to hire a third 
        teacher for each of our classrooms, which, because of the 
        pandemic, the children have really needed that one-on-one 
        attention. We've also hired a part-time mental health 
        consultant and later we hope to hire a full-time mental health 
        consultant. We also plan to use the funding for maintenance on 
        our building, including upgrades to our heating and plumbing 
        systems, and the installation of outdoor learning spaces.''

          Fatima Gonzalez Ray, director of Little Amigos Child 
        Development Center in Las Cruces: ``It's made a huge difference 
        on our stress levels. The funding has helped us offset any 
        unforeseen expenses and made it possible for us to make 
        payroll, hire new teachers, and purchase much-needed supplies 
        and materials for our classrooms. We've also been able to 
        purchase for each classroom a new HEPA-filtered air purifier, 
        which so far has led to a reduction in sick days taken by our 
        staff.''

Improve the long-term viability of the child care industry and support 
parent choice through child care assistance rates that reflect the true 
                            cost of care \2\
---------------------------------------------------------------------------
    \2\  https://www.nmececd.org/2021/07/01/n-m-dramatically expands-
child-care-assistance
---------------------------------------------------------------------------
    Instead of setting rates based on a market rate study, which 
perpetuates inadequate payment rates, New Mexico became the first state 
in the Nation, along with D.C., to use an alternative methodology 
approved by the U.S. Department of Health and Human Services, Office of 
Child Care. In 2021, and again in 2023 \3\, New Mexico created a cost 
estimation model to inform and determine child care subsidy rates. This 
alternative model is based on what it costs providers to create quality 
learning environments, maintain child-to-teacher ratios, and pay their 
staff competitive wages. This change in how we pay child care providers 
is central to a stable and expanding workforce because we now pay for 
actual costs of care instead of relying on the outdated market rate 
pricing approach that has reinforced a broken child care market. Most 
states use this traditional market rate study model that we replaced, 
which surveys providers to determine what they are charging parents for 
care and set rates accordingly. This method is flawed because child 
care tuition remains artificially low due to families' inability to 
afford the full cost of quality care. Tuition stays low to keep 
families from being priced out; child care provider revenues remain 
low; and wages for child care professionals remain low. As a result of 
the new approach we are using, child care providers are now able to 
improve the compensation of their employees, have a healthier business 
bottom line, and provide a path to allowing the state to serve more 
children in child care. Here's what our providers say about it:
---------------------------------------------------------------------------
    \3\  https://www.nmececd.org/2023/05/08/ececd-announces-proposed-
changes-that-will-improve-access-to-high-quality-child-care-for-most-
new-mexico-families

          Future Generations Early Learning Center in Clovis, NM: 
        Ashleigh Tackitt, Center Director said: ``The increased 
        revenues will help our center better serve children and 
        families, our employees, and our community. With this 
        additional support, we can invest in improved learning 
        environments, hire more staff to lower student-teacher ratios, 
        and provide more individualized care and education for the 
        children we serve. Increased wages for our staff have given 
        them the security they needed to quit second jobs, spend more 
        quality time with their own families, pursue early education 
        degrees and credentials, and commit to early education as a 
---------------------------------------------------------------------------
        viable long-term career.''

          The Toy Box Early Learning and Child Care Center, Las Cruces, 
        NM, Angela Garcia, CEO: ``New Mexico's continued investment in 
        early childhood education is changing the trajectory of our 
        future. My program is finally fully staffed for the first time 
        since the pandemic. My educators have said they can now breathe 
        a little easier at home financially making them better teachers 
        in the classroom. Our children continue to benefit from these 
        investments by having less stressed teachers and more 
        financially stable homes with waived copays and continuity of 
        care with increased access. We believe it takes a village to 
        provide the best foundation possible for our children and these 
        continued investments allow everyone in the village to focus on 
        what's important, our children. The most recent proposed 
        increases to the child care assistance rates are another step 
        in ensuring quality child care and education for our children 
        and ensuring we move toward a professional wage for our early 
        childhood professionals.

          A Gold Star Academy & Child Development Center, Farmington, 
        NM, Barbara Tedrow, Owner/CEO: ``The $3 an hour raise for child 
        care workers and the proposed increase to child care assistance 
        rates have collectively transformed my child care center, our 
        employees, and our community. They have elevated the value and 
        recognition of our staff, expanded our reach to serve more 
        families, and improved the economic and educational 
        opportunities for our community.''

  Strengthen families through expanded eligibility and waived parent 
                             copayments \4\
---------------------------------------------------------------------------
    \4\  https://www.nmececd.org/2022/04/28/new-mexico-leads-the-
nation-as-Governor-lujan-grisham-makes-childcare-free-for-most-families
---------------------------------------------------------------------------
    In 2022, ECECD used Federal emergency funds to increase income 
eligibility for child care assistance (CCA) up to 400 percent of 
Federal poverty level, which is currently $120,000 per year for a 
family of four. Simultaneously, ECECD waived all family copayments, 
making child care free for a majority of New Mexico families. This has 
been a game changer for working families in New Mexico, who routinely 
spent a third or more of their gross income on child care. Relieved of 
this crippling financial burden, families can better afford rent or 
mortgage, food and clothing, transportation, health needs, put money 
aside for retirement, extracurricular activities for their children, 
and other activities that improve their family's stability, security, 
and well-being. These changes have allowed New Mexico to provide 
financial assistance for more families who need child care, most of 
them at or near poverty. Here is what families have shared about what 
this means to them:

          Dylan Rojas, Albuquerque, NM: a single father shared the 
        following: ``Because I am on my own with my 1 year old 
        daughter, my biggest fear was that I was not going to be able 
        to afford child care. The free child care provided through the 
        State of New Mexico's Child Care Assistance program has 
        eliminated that stress and worry from my life. Because of this 
        program, I know that while I work for a better future for our 
        family, my daughter is in a safe place where she is happy, 
        learning, and growing. Applying for Child Care Assistance was a 
        simple and easy process and the support it provides has allowed 
        me to stop living paycheck to paycheck, buildup savings, and 
        live a more comfortable and stable life with my daughter.''

          Mackenzie Clark, of Portales, NM: ``The CCA program has made 
        our lives a lot less stressful. The cost of child care can be 
        equivalent to what we spend on rent, and the Child Care 
        Assistance program means I don't have to worry about that 
        expense on top of everything else. I now have the money to get 
        extra things my son needs like clothing, shoes, educational 
        materials, and workbooks, as well as the fun stuff like toys 
        and family outings. It's been an amazing experience and I am so 
        grateful that our local child care providers helped connect us 
        with ECECD's Child Care Assistance program.''

          Lauren Frazier, of Albuquerque, NM: ``I used to be the stay-
        at-home parent while my husband was our primary bread winner. 
        It has been a long-term dream of mine to go to nursing school 
        and become an RN. Until we enrolled in this program, there 
        wasn't a way for me to afford school because of the cost of 
        child care and the time commitment nursing school requires. 
        Because of the CCA program, I am now working toward my dream 
        job. It's helping my dream come true all while providing the 
        best quality of care for my children.''

          Vicki Sampler, Curry County, NM ``The expanded child care 
        assistance program allows me to work full time to provide for 
        my children,'' Said Vicki Sampler, a single mother of four in 
        Curry County, NM. ``I can go to work with peace of mind knowing 
        that my children are safe and receiving quality care and 
        education from trusted professionals. I would never have been 
        able to afford that kind of care without the child care 
        assistance program and waived copays. Now I have flexibility in 
        my budget to afford little league for my kids and other family 
        activities that I wouldn't have had time or money for 
        otherwise.''

          Irlanda Hernandez, Albuquerque, NM ``The co-pay waiver for my 
        4-year-old son's child care has been a such great help 
        financially for our family,'' said Irlanda Hernandez, an 
        educator and mother of four. As a dual-language second-grade 
        teacher with a background in early childhood education, I know 
        that a quality early education can have a tremendous impact on 
        a child's life, and this expansion of the child care copay 
        waiver makes quality early education all the more accessible to 
        families like mine.''

                  Expand child care supply and access
    Affordability is not the only major barrier to families' accessing 
quality care in their communities, however. Like most states, New 
Mexico has a longstanding shortage of child care supply. There simply 
isn't enough child care in most communities to meet the needs of the 
families who live there. To begin addressing this issue, ECECD 
allocated over $11 million in ARPA stabilization administration funds 
to create a child care supply building grant. ECECD has awarded 37 
grants to child care providers in communities where care is most 
needed. Originally the grant was projected to create 800 new slots; 
today we project that the grant will increase licensed capacity by 
1,200; creating more opportunities for New Mexico families. Our 
providers described the impact:

          Crystal Tapia-Romero--New Mexico Early Learning Academy, 
        Albuquerque, NM: ``We're excited to have the supply building 
        grant because it is going to allow us to complete minor 
        renovation on a building that will serve infants and toddlers. 
        We will use the funds to furnish the building and pay the 
        salaries of staff for the first 6 months. The infant/toddler 
        program will create 150 new slots. The building is located in a 
        child care desert where there aren't many high-quality programs 
        for infants and toddlers. Overall, this is a huge blessing 
        because not only are we now able to provide quality care for 
        nearly 100 families in that area, but we are creating about 75 
        new jobs. We offer competitive wages for our employees and to 
        create this many new jobs and new slots is extremely exciting 
        for us.''

          Barbara Tedrow--A Gold Star Academy & Child Development 
        Center, Farmington, NM: ``The Supply Building Grant has 
        expanded our infant and toddler child care services and has 
        opened up a world of possibilities for our centers and the 
        families in our community. This invaluable opportunity has 
        allowed us to create additional spaces, improve facilities, and 
        enhance our programming to meet the unique needs of our 
        youngest learners. We can now offer a nurturing, stimulating, 
        and an inclusive environment where infants and toddlers can 
        thrive, setting the foundation for a lifelong love of learning. 
        The grant has also facilitated the recruitment and training of 
        highly skilled staff, ensuring that we can deliver the highest 
        quality and education to every child.

 Advance a diverse, well-compensated, and credentialed early childhood 
                               workforce
    To prevent erosion of the early childhood workforce and incentivize 
new workers entering the profession, ECECD utilized Federal relief 
funds to provide a $1,500 recruitment and retention bonus \5\ to every 
early educator who served during the pandemic, followed by a grant to 
providers that funded a $3/hour raise \6\ for over 7,000 child care 
staff across the state. Additionally, New Mexico invested heavily in 
credential and degree supports for early educators, incentives for 
Native American and bilingual educators, \7\ free college tuition, \8\ 
and stipends to cover living expenses \9\ for those actively pursuing a 
degree in early childhood education and care.
---------------------------------------------------------------------------
    \5\  https://www.nmececd.org/2021/11/01/child-care-workers-in-new-
mexico-eligible-for-1500-incentive-payments
    \6\  https://www.nmececd.org/2022/10/11/gov-lujan-grisham-
announces-historic-pay-increase-for-early-childhood-workforce
    \7\  https://www.nmececd.org/2022/11/10/ececd-awards-7-million-in-
endowments-to-support-early-childhood-programs-at-nm-colleges-and-
universities
    \8\  https://www.Governor.state.nm.us/2022/03/04/Governor-signs-
legislation-making-college-tuition-free--MichelleLujan--
percent20Grisham--Friday--program
    \9\  https://www.nmececd.org/2022/05/12/Governor-lujan-grisham-
launches-new-stipend-program-supporting-more-than-800-early-childhood-
professionals-seeking-advanced-degrees

          Michelle Valles, teacher Bumble Bee Learning Center, Santa 
        Teresa, NM: ``There has been a drastic change on my part 
        receiving the extra three dollars an hour. It has helped me 
        with my rent and transportation expenses and helps me focus 
        better on what we do: caring for the children and giving them 
        the support that they need. It also helps me continue my 
---------------------------------------------------------------------------
        studies and training to become a better teacher.''

          Rebecca Sanabria, teacher at NM Children First Learning 
        Center, Sunland Park, NM: ``The wage increase has helped me out 
        financially, especially as a first-time mom who struggles with 
        the expenses of raising a baby. It gives me the courage to come 
        to work, and the satisfaction of knowing that my bills are 
        getting paid and I'm providing for my family. I'm not as 
        stressed anymore.''

          Ruth Porta, Administrator at La Esperanza Child Development 
        Center, LLC in Albuquerque, NM ``The Competitive Pay for 
        Professionals (CPP) $3 an hour raise has allowed my program to 
        retain and recruit qualified staff and educators. Before my 
        base pay was $13.00 per hour now thanks to the CPP my starting 
        pay is $16.00 per hour. My staff morale has increased 
        significantly and the turnover has decreased by almost 80 
        percent. One of my educators, a single mother of three 
        children, told me last week that now with the CPP she qualifies 
        to buy a house! With the new proposed rulemaking for child care 
        assistance rate increases, my program will be able to continue 
        paying my staff at the same rate as the CPP and increase my 
        revenues to a level that will allow me to hire a Family Liaison 
        Coordinator and an Infant-Toddler Curriculum Director to 
        increase the quality of service we provide to our community.''

    Where we are today: public investment and leadership makes a 
difference. Taken together, the Federal relief funds equipped our state 
to transform and reinvigorate our early childhood system. Today, New 
Mexico leads the Nation in early childhood investment and innovation 
and serves as a roadmap for many other states looking to make similar 
changes. However, as transformational as these emergency funds were for 
New Mexico, they were one-time only funds and not sufficient to 
maintain these gains over the long term.

    Following the end of most pandemic restrictions in Spring 2022, our 
department leadership embarked on an extensive tour \10\ of the state 
to visit early childhood programs to observe the impact of the 
emergency relief funding and learn the needs of providers. One of the 
most common items of feedback we heard, from every corner of the state, 
was concern about the looming expiration of Federal relief funds, which 
they worried would roll back recent gains and return the child care 
industry to an unsustainable pre-pandemic status-quo.
---------------------------------------------------------------------------
    \10\  https://www.nmececd.org/wp-content/uploads/2022/12/Spring-
Tour--2022--Mini-Report--Dec-20-2022.pdf

    Fortunately, in the November 2022 election, the voters of New 
Mexico approved a significant, sustainable, and predictable new source 
of funding for early childhood by tapping into a small portion of the 
state's Land Grant Permanent Fund. \11\ Additionally, the Early 
Childhood Trust Fund is growing, resulting in a significant increase in 
distributions to ECECD. With these new funds, New Mexico is able to 
increase rates for child care assistance and Pre-K, which will result 
directly in increased compensation for providers, and free child care 
for most New Mexico families. Not every state is in the same position 
as New Mexico, and increased Federal funding for child care must be 
part of the equation moving forward.
---------------------------------------------------------------------------
    \11\  https://www.abqjournal.com/2547588/voters-approve-amendment-
to-spend-more-money-on-early--childhood-education.html

    New Mexico is proof positive of the enormous impact that a 
significant Federal investment in early childhood programs and services 
can have on families, young children, and the communities in which they 
live. For too long, our Nation has underinvested in young children 
during their most critical and rapid period of development. Ninety 
percent of brain development occurs in the first 5 years of life, and 
research is definitive that access to high-quality care and education 
during this window improves long-term outcomes for children across a 
range of academic, health, and well-being indicators. An investment in 
early care and education is an investment in a more vibrant and secure 
---------------------------------------------------------------------------
future for our children and families.

    Drawing from the lessons learned from the extraordinary early 
childhood investments the Federal Government made during the pandemic, 
I urge the Members of this Committee, Congress, and the Federal 
administration to maintain these investments and commit to a long-term 
early childhood funding strategy for states that sustains the 
significant child care advancements we and others have made. Thank you 
for your time and this opportunity to share New Mexico's experiences 
and vision for the future of our children.
                                 ______
                                 
               [summary statement of elizabeth groginsky]

    Using the Federal relief funds distributed through CARES 
(Coronavirus Aid Relief and Economic Security) Act, CRRSA (Coronavirus 
Response and Relief Supplemental Appropriations) Act, and ARPA 
(American Rescue Plan Act), New Mexico averted the collapse of its 
child care industry and developed and implemented transformational 
policies that have begun to fix many of the persistent problems that 
have blocked access to affordable, quality care.
  Stabilize the child care industry to ensure access to quality early 
                           care and education

          Distributed over $163 million in child care 
        stabilization grants to more than 1,100 child care providers.

          Federal funds supported staff raises and bonuses and 
        improvements to infrastructure and learning environments.

          This support resulted in providers staying open 
        through the pandemic.

Improve the long-term viability of the child care workforce and support 
parent choice through child care assistance rates that reflect the true 
                              cost of care

          Became the first state to move to a cost model for 
        rates in 2020, significantly improving revenues for providers.

          Proposed rate increases for state Fiscal Year 2024, 
        using the cost model, that include competitive industry wages.

  Strengthen families through expanded eligibility and waived parent 
                               copayments

          Implemented the largest expansion of the child care 
        assistance program in state history, increasing income 
        eligibility up to 400 percent of the Federal Poverty Level.

          Waived all family copayments, making child care free 
        for most New Mexico families.

 Advance a diverse, well-compensated, and credentialed early childhood 
                               workforce

          Delivered a $1,500 recruitment and retention bonus to 
        every early educator who served during the pandemic.

          Provided a $3/hour raise for more than 7,000 child 
        care staff in the state.

          Funded stipends to cover living expenses for early 
        childhood professionals pursuing early childhood degrees.

                  Expand child care supply and access

          Initiated a child care supply building grant with 
        Federal relief funding that is on track to create more than 
        1,200 new child care slots in communities where they are needed 
        most.

                                 ______
                                 
    The Chair. Thank you very much, Secretary Groginsky. Our 
next witness will be Lauren Hogan, who is the Managing Director 
of Policy and Professional Advancement at the National 
Association for the Education of Young Children. She is a 
national policy expert on childcare and early learning. Ms. 
Hogan, thanks very much for being with us.

  STATEMENT OF LAUREN HOGAN, MANAGING DIRECTOR OF POLICY AND 
    PROFESSIONAL ADVANCEMENT, NATIONAL ASSOCIATION FOR THE 
          EDUCATION OF YOUNG CHILDREN, WASHINGTON, DC

    Ms. Hogan. Thank you so much, Senator--Chairman Sanders, 
Ranking Member Cassidy, and Members of the Committee. It is a 
privilege to be here today as a parent and on behalf of NAEYC's 
early childhood community.

    I am honored to have the opportunity to share educator 
stories, to show how helping them helps families, and to talk 
with you about how we can solve the crisis at hand. Early 
childhood educators are the linchpin driving childcare quality 
and supply for all ages and all settings.

    Together with families, they help children build strong 
foundations, and their success is proven by decades of evidence 
attesting to the short and long term benefits of investing in 
quality early learning. However, these educators, women, and 
women of color, are earning poverty level wages that undermine 
their skilled and complex work.

    Facing limited choices, parents of young children pay more 
for childcare than college tuition, and a lack of investment in 
childcare for infants and toddlers alone costs our Country $122 
billion each year.

    How does this happen? Childcare is unique, a textbook 
example of a market failure in which neither families nor 
educators can absorb the true costs. Imagine a deep hole in the 
ground surrounded by quicksand. Educators and parents are 
struggling to stand on the edge and build a bridge across the 
chasm where public funding should be.

    The educators try by, say, maxing out credit cards like 
Amanda in California, or accessing Social Security early, like 
a family childcare provider in Iowa, or foregoing salary like 
Sheila in Tennessee. Parents are trying too, but as Leah in 
Washington says, we are barely making it. The start of the 
pandemic worsens these preexisting challenges, but amid the 
crisis, childcare relief funds arrive.

    In addition to helping families by limiting copays and 
expanding eligibility, every state sets up stabilization grant 
programs that are responsive to community needs, supporting 
providers so they can support families and children and 
businesses.

    You have heard about the amazing work in New Mexico, but we 
know that 75 percent of states increased provider payment 
rates, and many from Kansas to Kentucky, Maine to Michigan, 
Oklahoma and Ohio are building the supply and retention of the 
early childhood workforce. 300,000 new childcare slots are 
created, and the number of licensed programs today exceeds the 
number opened pre-pandemic thanks to Federal relief.

    The grants didn't fill the hole, but they stabilized the 
quicksand around it, and they have been a saving grace for the 
220,000 childcare programs and 10 million children and their 
families. In one NAEYC survey, 92 percent of childcare programs 
said the grants helped keep their program open, and 30 percent 
would have closed permanently without them. Stabilization 
grants have been greatly appreciated, says Nicole, a center 
director in New Jersey, and I pray they will continue.

    Unfortunately for Nicole and educators everywhere, 
stabilization grant funding is ending, and parents and 
educators feel themselves sinking back into this quicksand. So, 
a director in Louisiana says, after the end of stabilization 
grants, the increase in pay will need to be passed on to 
families.

    We really don't want to do this, but we will have no 
choice. Approximately 40 percent of center directors and family 
childcare providers agree, saying that their programs too, are 
going to be forced to raise tuition. One in three leaders say 
their programs will cut wages. One in five family childcare 
providers will serve fewer children.

    Only 13 percent of family childcare respondents could say 
that their program will be fine when stabilization grants end. 
It is a climate of extreme uncertainty for these small 
businesses. Educators are walking away. Parents and providers 
are desperate. A center director in Tennessee said that she is 
hiring people now that she never would have interviewed before 
the pandemic.

    This is the kind of last resort decision that should really 
worry us all. Parents and providers feel like they are failing, 
but it is the market that is failing them. Correcting 
underlying imbalances requires Government intervention not to 
restrict individual choices, but to enhance them. Congress must 
recognize that childcare is a public good that requires public 
investment and step in with subsidized funding in sufficient 
scope and scale as it does with other industries when free 
markets fail.

    Building on bipartisan support, and with the knowledge that 
good things happen when Congress funds childcare and early 
learning, we urge you to prioritize the investments needed to 
keep the quicksand stabilized and fill the hole, support every 
state with sufficient and predictable funding and flexibility 
that allows them to finance the true cost of care, invest in 
the education and compensation of educators, make child care 
more affordable for families, and support infants, toddlers, 
preschoolers, and school age children in a comprehensive mixed 
delivery system that provides for real family choice.

    The hole is deep, the quicksand is strong, and parents and 
educators can't build the bridge alone. Thankfully, we know 
Federal investments in childcare work, and so Congress must 
make them before it is too late. Thank you very much.

    [The prepared statement of Ms. Hogan follows:]

                   prepared statement of lauren hogan
    Chairman Sanders, Ranking Member Cassidy and Members of the 
Committee:

    It is a privilege to be with you today, as a parent myself, and on 
behalf of the 60,000 early childhood educators and allies who are 
members of the National Association for the Education of Young Children 
(NAEYC). Together with our 51 state and local Affiliates across the 
country, NAEYC has the honor of being the professional membership 
organization promoting high-quality early learning for all young 
children, birth through age 8. We work toward an early childhood 
education workforce that is valued and supported across all states, 
with all ages, and in all settings, including child care centers, 
family child care homes, faith-based programs, and schools. I'm honored 
to have the opportunity today to share stories from and about this 
workforce and show how our Nation's undervaluing of them has led to the 
child care crisis that is impacting families in every state and 
community--and further, to talk about how we can solve it and help 
families, children, educators, businesses, and our economy thrive.

    Early childhood educators are the linchpin driving both quality and 
supply in child care and early learning. \1\ Together with families, 
they share responsibility for building the relationships that help 
ensure children have a strong foundation, which supports all their 
learning and development. And they are successful, proven by decades of 
evidence and data attesting to the benefits of investing in high-
quality early childhood education and educators, which are felt both 
immediately, and over generations. \2\
---------------------------------------------------------------------------
    \1\  Wechsler, M., Melnick, H., Maier, A., & Bishop, J. 2016. The 
Building Blocks of High-Quality Early Childhood Education Programs. 
Palo Alto, CA: Learning Policy Institute.
    \2\  Heckman, J. J. Invest in Early Childhood Development: Reduce 
Deficits, Strengthen the Economy. January 2020. Retrieved from The 
Heckman Equation: https://heckmanequation.org/resource/invest-in-
earlychildhood-development-reduce-deficits-strengthenthe-economy/ and 
Leslie J. Calman, L. T.-W. (2005). Early Childhood Education for All: A 
Wise Investment. New York: Legal Momentum.

    However, these same early childhood educators--primarily women and 
often from communities of color--who make it possible for so many 
others to have the jobs they need, are earning poverty-level wages that 
undermine their own skilled, complex, and valuable work. \3\ Research 
confirms that better-paid teachers provide better-quality care, and yet 
even before the pandemic, nearly half of early childhood educators 
earned wages so low that they had to access public benefits in order to 
make ends meet. \4\ At the same time, parents of young children pay 
more for child care than public in-state college tuition, yet--with 
more than half living in a child care desert \5\--still don't have real 
choices. Without available and affordable quality child care, 
businesses struggle to hire the skilled and talented workers that are 
needed to support the economy, and a lack of investment in child care 
for infants and toddlers alone costs our Country $122 billion each year 
in lost earnings, productivity, and revenue. \6\
---------------------------------------------------------------------------
    \3\  Whitebook, M., McLean, C., Austin, L.J.E., & Edwards, B. Early 
Childhood Workforce Index - 2018. Berkeley, CA: Center for the Study of 
Child Care Employment, University of California, Berkeley. Retrieved 
from http://cscce.berkeley.edu/topic/early-childhood-workforceindex/
2018
    \4\  Kashen, Julie, Halley Pottery and Andrew Stettner. Quality 
Jobs, Quality Child Care. 2016. The Century Foundation. Retrieved 
online at: https://tcf.org/content/report/quality-jobs-quality-child-
care/
    \5\  Center for American Progress. 2018. Childcaredeserts.org
    \6\  Ready Nation and Council for Strong America. 2023. $122 
Billion: The Growing, Annual Cost of the Infant-Toddler Child Care 
Crisis. Retrieved online at: https://www.strongnation.org/articles/
2038-122-billion-the-growing-annual-cost-of-the-infant-toddler-child-
care-crisis

    These realities are simultaneously true because child care is a 
textbook example of a market failure, the constraints of which mean 
that families can't afford the cost of care, while early childhood 
programs (in centers and in family child care homes) can't raise wages 
or provide benefits sufficient to compete with other employment 
options, because they cannot pass more costs along to families. \7\ 
This means they can't effectively recruit or retain staff, which in 
turn means that too many people leave programs or close family child 
care homes, and not enough people come in. That, in turn, means fewer 
people are available to provide the care and education that families 
and children need across all states and in all communities, which means 
child care becomes a scarce--and therefore increasingly expensive--
resource. Costs go up for families, options dwindle, and quality moves 
further out of reach. This is the cycle we are experiencing, and 
without significant Federal help, it will continue to worsen.
---------------------------------------------------------------------------
    \7\  Harbach, Meredith Johnson, Childcare Market Failure (January 
1, 2015). Utah Law Review, Vol. 2015, No. 3, 2015, Available at SSRN: 
https://ssrn.com/abstract=2898360

    In order to talk more fully about this crisis--where it came from, 
how child care relief helped, and what's needed to solve it--I'd like 
you to join me in imagining a deep, unfilled hole in the ground, 
surrounded by quicksand. Where there should be strong and secure 
scaffolding to keep the hole from collapsing, there are only rickety 
sticks. Each morning, early childhood educators and parents of young 
children walk up to opposite sides of the hole, holding the hands of 
young children, trying to keep from sinking into the quicksand. They 
look to each other across that deep, unfilled chasm, created by a lack 
of sufficient public funding for child care, and think about how they 
can possibly build the connecting bridge that supports children who are 
---------------------------------------------------------------------------
safe, happy, healthy, and learning.

    Sometimes, the educator--owner of a family child care home, 
director of a child care center--tries to build the bridge on the 
quicksand, across the hole, by maxing out her personal credit card to 
pay her assistant and cover rent, as Amanda in California had to do. 
Some months, she forgoes salary, as Sheila in Tennessee did, or is away 
from her own young children to cover staffing shortages early in the 
morning and late in the evening, like Jordyn in Maine. A family child 
care provider in Iowa starts accessing her social security early to 
cover the costs of running her program. Maggie in Georgia--speaking on 
behalf of directors everywhere--talks about how one of her best 
teachers needs a raise, up from $11/hour, the average for providers in 
the state, as around the country. But where the retail store down the 
street can pay that, along with health insurance, Maggie cannot. So the 
teacher leaves, even though everyone, children and families included, 
desperately wishes she could stay.

    Sometimes, when there are no other options and the quicksand 
threatens to pull the entire program under, the program raises tuition 
or reduces hours. Then, parents who already paying more than they can 
afford to build their part of their bridge, sink a little deeper into 
the quicksand on their side. As Leah in Washington says, ``It's almost 
impossible to run a household on one income these days, and having one 
person stay home hasn't been an option. We have paid over $15,000 a 
year for child care for our kids. And no matter which way we slice it, 
we are barely making it.'' Or a parent in Arizona, who explains, ``Most 
places had long waiting lists, and things were a little tense as we 
waited for an opening. My son was getting too heavy for my elderly 
mother and I was concerned that her hearing problems would affect her 
ability to care for her grandchild. Finally, there was an opening, but 
. . . the cost of child care is more than my mortgage and I'm already 
concerned that they will close or raise their rates.'' \8\
---------------------------------------------------------------------------
    \8\  Quotes drawn from MomsRising via https://www.momsrising.org/
stories

    For decades, every day has been like this; for so many families, so 
many educators, with impacts on so many children and consequences for 
employers, businesses, and the economy. And then, the pandemic hits, 
and alongside the panic and crisis of having to close and reopen 
programs, navigate illnesses, and reassure families and children, child 
care relief funds start to arrive. In addition to waiving or limiting 
copayments for families and increasing eligibility so more families can 
get the help they need, all 50 states set up stabilization grant 
programs, responsive to the needs of their communities and designed to 
ensure much-needed funds equitably and efficiently reach programs and 
educators. In North Carolina, a total of 4,379 child care programs 
received $276.8 million from Stabilization Grant funds for staff 
compensation and bonuses, leading to a $2 to $3 hourly increase in 
wages and bonuses totaling between $2,000 and $3,500. \9\ In Alaska, 
$51 million was awarded to approximately 446 child care businesses. 
Three out of every four states increased provider payment rates, and 
many made policy decisions to build the supply and retention of the 
workforce by investing in scholarships and apprenticeships; providing 
access to paid leave, health insurance, and child care benefits; and 
expanding shared services models, substitute pools, and family child 
care networks. \10\
---------------------------------------------------------------------------
    \9\  NC-Stabilization-Funds-Provider-Survey-Findings-FINAL-4.18.pdf 
(childcarerrnc.org)
    \10\  Administration for Children and Families. Examples of State & 
Local ECE Workforce Recruitment & Retention Strategies. Retrieved 
online at: https://www.acf.hhs.gov/ecd/appendix-dear-colleague

    Overall, these grants have been a saving grace for the 220,000 
child care programs--reaching up to 10 million children and their 
families--who received them. \11\ We know that's true because NAEYC 
asked them, over the course of seven surveys since March 2020. \12\ 
Here are just a few things we also know about how the stabilization 
grants have worked to support providers so that they can support 
children, families, and businesses:
---------------------------------------------------------------------------
    \11\  Administration for Children and Families. May, 25, 2023. 
COVID Investments in Child Care: Supporting Children, Families, and 
Providers. Retrieved online at: https://www.acf.hhs.gov/occ/
infographic/covid-investments-child-care-supporting-children-families-
and-providers
    \12\  All NAEYC ECE Field survey briefs, including state-by-state 
data and deep-dive briefs focused on family child care programs, and 
programs serving infants and toddlers, are available at www.naeyc.org/
ece-workforce-surveys

          92 percent of child care programs said the grants 
        helped keep their program open, and one in every three said 
---------------------------------------------------------------------------
        their program would have closed permanently without them.

                Y  This number rises for family child care (FCC) 
                providers; 40 percent of FCC providers who received the 
                grants said their program ``would be closed without the 
                support.''

          Half of survey respondents indicated that they had 
        received more money from a wage increase or supplement in the 
        last year; and those who worked in programs receiving 
        stabilization grants were twice as likely to report an increase 
        than those who did not.

                Y  Again, this number rises for family child care 
                providers: FCC respondents who received stabilization 
                grants were three times more likely to have reported a 
                wage increase than FCC respondents who did not receive 
                stabilization grants.

          300,000 new child care slots have been created, and 
        the number of licensed child care centers today exceeds the 
        number open pre-pandemic, which, as Child Care Aware of America 
        says, suggests that the relief funding ``didn't just keep the 
        sector afloat, but allowed it to recover and grow.'' \13\
---------------------------------------------------------------------------
    \13\  Child Care Aware of America. 2023. Catalyzing Growth: Using 
Data to Change Child Care. Retrieved online at: https://
info.childcareaware.org/media/catalyzing-growth-22-data

    With these relief funds, the early childhood educators and parents 
who walk up to the edges of that deep hole with their children every 
morning, have felt the ground beneath their feet get a little stronger, 
a little more stable. The unfilled hole is still there, and the 
scaffolding is still rickety, and they still have to build the bridge, 
but the quicksand isn't threatening to pull them under at the same 
time. ``It's not the only solution,'' says Nicole, a child care center 
director in New Jersey, ``but stabilization grants are one thing that 
---------------------------------------------------------------------------
has been greatly appreciated and helping. I pray they will continue.''

    Unfortunately for Nicole, and educators everywhere, many states 
have exhausted their funds or are in final payment stages. To the 
extent any state has relief funding left, the money has been obligated 
and plans are in place to use those funds so they can be fully spent by 
their respective deadlines. As stabilization grants end, educators and 
parents at the edges of the hole can feel the quicksand coming back, 
even stronger and faster than before. As Kishauna, a family child care 
provider in Iowa tells us, ``The grants were helpful but we have 
nothing left. We have no idea where the money is coming from going 
forward.'' She and thousands of other programs are warning us about the 
consequences. For example:

          43 percent of child care center directors and 37 
        percent of family child care (FCC) providers said that when 
        stabilization grants end, their program will be forced to raise 
        tuition for working parents.

                Y  As a child care center director in Louisiana says, 
                ``We would like to keep our staff working for higher 
                pay. But after the end of the stabilization grants, the 
                increase will need to be passed on to our families. We 
                really don't want to do this but will have no choice. 
                Higher pay for our staff is a must in order to keep the 
                numbers where they are in our center.''

          22 percent of child care center directors said their 
        program will lose staff while 19 percent of FCC providers said 
        their program will have to serve fewer children.

          27 percent of child care center directors and 29 
        percent of FCC providers said their program will cut wages or 
        be unable to sustain wage/salary increases.

          Only 13 percent of FCC respondents could say that 
        their program ``will be fine'' when stabilization grants end.

    ``When the stabilization grants for compensation end,'' says one 
North Carolina center director, ``my center will be in critical 
condition. Staffing issues are major barriers to the operation of my 
center. I am currently unable to hire enough staff to fill the slots 
that I am licensed for. The result is that I can't serve children in my 
community who need child care. I have talked to my current staff and it 
is most likely that the majority of them will leave my center and the 
profession if there is not a solution which extends the grants.''

    All small businesses understand the importance of continuity and 
the challenges of uncertainty. This is a climate of extreme 
uncertainty--and fears for the future are playing out in the present. 
Educators keep walking away; one in every three respondents to NAEYC's 
last survey indicated that they were considering leaving their job or 
closing their family child care home.

    As educators leave programs seeking their own economic security, 
turnover increases, transitions become more challenging for children 
and programs, and parents and providers grow desperate. A child care 
center director in Tennessee told us that they were hiring people now 
that they never would have interviewed before the pandemic. Given all 
we know about the science of early learning, and the protections needed 
to support children's health and safety, these kinds of last-resort 
decisions should worry us all. Child care program directors, owners, 
and operators--knowing now what stronger ground can feel like, wearied 
by the ever-growing bridges they need to build and the ever-shrinking 
pool of resources they can draw upon to build them--are wondering how 
long they can go on.

    Providers and parents may feel like they are failing, but the 
reality is that the market has failed them, and correcting the 
imbalances underlying this market failure requires government 
intervention. Such intervention will not restrict individual choices 
but will enhance them. If Congress does not step in with subsidized 
funding at sufficient scope and scale to support and strengthen our 
Nation's child care system--as it does with other industries, from 
banking to telecom to energy to agriculture--the result won't lead to 
more or better options for families. It will lead to fewer options, and 
worse ones.

    This is the time to recognize that child care is a public good that 
requires public investment. Bipartisan increases to the Child Care and 
Development Block Grant, bipartisan investments at the state and local 
levels, and congressional support for child care relief has 
demonstrated that when Congress funds child care and early learning--
when you meet the needs of both families and educators--good things 
happen.

    Building on that foundation, we urge Congress to act, both by 
making immediate investments to stabilize the quicksand beneath the 
feet of educators, families, and children, and by making the 
substantial, sustainable investments needed to strengthen the 
scaffolding and fill the market-failure sized hole in the child care 
system. This means supporting every state with sufficient and 
predictable funding and flexibility that allows them to:

          1. Finance the true cost of care and simultaneously address 
        affordability, accessibility, quality, and compensation.

          2. Invest in the education and compensation of early 
        childhood educators so they can recruit and retain a qualified 
        workforce across settings.

          3. Make child care more affordable for families so that 
        families pay no more than 7 percent of their income in a 
        sliding scale format that meets families' individual budgets.

          4. Support infants, toddlers, and preschoolers in a 
        comprehensive, mixed-delivery system because different families 
        need different solutions, and they must have real options that 
        include family child care, faith-based settings, public 
        schools, community-based settings, Head Start and private 
        providers.

    It is necessary and possible to address the interconnected 
challenges of access, affordability, and quality in child care and 
early learning. It is necessary and possible to reinforce the benefits 
of a strong mixed-delivery system that ensures parents have real choice 
in determining whether to rely on care, and what setting best meets 
their needs. Child care is not a rural, suburban, or an urban problem; 
not a Democratic, Republican, or Independent problem--but an American 
problem. Our nation is at an urgent and important inflection point, and 
it is true that the hole is deep, the scaffolding is rickety, the 
quicksand is strong, and parents and educators can't build the bridge 
by themselves. Thankfully, we know Federal investments in child care 
work, and so Congress can--and must--make them before it is too late. 
Thank you very much.
                                 ______
                                 
                  [summary statement of lauren hogan]
    During Ms. Hogan's testimony, she will share stories from and about 
the early childhood education workforce and show how our Nation's 
undervaluing of them has led to the child care crisis that is impacting 
families in every state and community. Further, she will talk about how 
we can solve this crisis and help families, children, educators, 
businesses, and our economy thrive. Key points will include:

          Early childhood educators are the linchpin driving 
        both quality and supply in child care and early learning.

          As a result of the nation's failure to adequately 
        invest in high-quality child care and early learning over the 
        years, children are not getting what they need; families are 
        paying more for child care than for housing, if and when they 
        can find and access that care; and the workforce is paid so 
        little that nearly half live in families that depend on public 
        assistance.

          Child care is a textbook example of a market failure, 
        and insufficient public funding has created a deep hole, with 
        rickety scaffolding, surrounded by quicksand. Educators and 
        parents have been trying to work together to build a bridge 
        across the hole, but they are struggling because they are 
        anchored in quicksand.

          Child care relief funds didn't fill the hole, but 
        they stabilized the quicksand. They have been a saving grace 
        for 220,000 programs, reaching up to 10 million children and 
        their families, and showing that when Congress funds child care 
        and early learning, good things happen (i.e., programs stay 
        open; providers receive increased wages and benefits; families 
        save money on child care costs; and more families got the help 
        they needed).

          But as stabilization grants end, the consequences 
        will be dire, with programs forced to raise tuition for 
        families and cut wages for educators. One in every three 
        educators say they are considering leaving their program or 
        closing their family child care home.

          Correcting the imbalances underlying the child care 
        market failure requires government intervention--not to 
        restrict individual choices but to enhance them. Subsidized 
        funding at sufficient scope and scale is needed to support and 
        strengthen our Nation's child care system to create more and 
        better options for families.

          Congress must (a) make immediate investments ensure 
        the quicksand beneath the feet of educators, families, and 
        children remains stabilized and (b) make the substantial, 
        sustainable investments needed to strengthen the scaffolding 
        and fill the market-failure sized hole in the child care 
        system. This means supporting every state with sufficient and 
        predictable funding and flexibility that allows them to:

                Y  Finance the true cost of care

                Y  Invest in the education and compensation of early 
                childhood educators across settings

                Y  Make child care more affordable for families

                Y  Support infants, toddlers, and preschoolers in the 
                context of a comprehensive, mixed-delivery system that 
                works for programs and ensures quality options exist 
                for families

                                 ______
                                 
    The Chair. Ms. Hogan, thank you very much.

    Let me now turn to Senator Kaine, who will introduce our 
next witness, Cheryl Morman.

    Senator Kaine. Well, to my colleagues, I am really honored 
to have the chance to introduce you to Mrs. Cheryl Morman. And 
she plays an important role in this panel because she 
represents home health, home childcare providers, family 
childcare providers.

    Ms. Morman is the current President of the Virginia 
Alliance for Family Child Care Associations. It is the only 
statewide association in Virginia solely focused on home-based 
family childcare and is an affiliate of the National 
Association for Family Child Care.

    Ms. Morman has owned and operated a family childcare 
program, Blessings from Above, in my hometown of Richmond for 
over 20 years. Blessings From Above stayed open throughout the 
COVID-19 pandemic, serving children of first responders, 
teachers, and other essential professions.

    This is an important one, Mrs. Morman personally called 
over 400 family childcare providers during COVID within the 
Commonwealth to ensure that they knew how to access the 
childcare stabilization grants. She represents publicly funded 
family childcare providers on the Virginia Early Childhood 
Advisory Committee.

    She works with the Virginia Department of Education in 
tandem with Virginia Commonwealth University to develop a 
unified set of early learning and development standards for 
children's age birth to 5.

    She is a member of a working group by the Virginia 
Department of Social Services to build childcare supply in 
underserved areas using a toolkit for community services. I am 
grateful for the work that she does. I am grateful that she is 
with us today. Thank you for all you do, Mrs. Morman.

    The Chair. Ms. Morman, you are recognized.

  STATEMENT OF CHERYL MORMAN, FAMILY CHILD CARE PROVIDER AND 
      PRESIDENT, VIRGINIA ALLIANCE FOR FAMILY CHILD CARE 
                   ASSOCIATIONS, RICHMOND, VA

    Ms. Morman. Good morning, Chair Sanders----

    The Chair. Hold the mic a little bit closer to your mouth, 
please.

    Ms. Morman. Good morning, Chair Sanders, Ranking Member 
Cassidy, and Members of the Committee. Thank you for this 
opportunity.

    I am Cheryl Morman, President of the Virginia Alliance of 
Family Childcare Association, the only state association in 
Virginia whose focus is family childcare, which refers to small 
childcare programs operated from someone's home. I have been a 
licensed family childcare business owner and educator since 
2002.

    The children in my care are 6 weeks to 5 years of age. I am 
a wife, a mother, and a grandmother. Since testimony this 
morning is short, I will get to the topic at hand, the 
childcare crisis and the role of the Federal Government in 
improving this crisis. Prior to COVID-19, my family childcare 
business was at capacity with a waiting list.

    I had two full time teachers along with myself, 11 families 
paid privately, and only one of my families participated in the 
childcare subsidy program. I was able to maintain payroll and 
my expenses. There were parents that would have difficulty from 
time to time, but they made too much money to qualify for 
assistance.

    I would have to work out payment arrangements, often to my 
business's detriment, to continue to meet the needs of our 
families and the children entrusted in my care. Then COVID-19 
hit. Many daycare facilities began to close. However, many 
family childcare facilities continued to operate.

    The funding provided by Congress for COVID-19 relief, 
particularly $50 billion since December 2020, helped me to 
stabilize and get through without sacrificing critical services 
to the parents I serve. To help families with the costs of 
childcare, the Federal funding allowed the state to increase 
the income eligibility and do away with their co-pay, which 
meant more families could qualify for childcare assistance.

    The number of families in my program benefiting from 
childcare assistance increased from 1 to 6. Some were new 
families, and some were families I cared for before that, now 
qualify for childcare assistance. Eventually, the state also 
increased the number of absences covered, providing resources 
based on enrollment and not attendance.

    This meant that if a family had COVID or was exposed to 
COVID, had to be out for 7 to 10 days prior to the provider, 
still receive tuition and child remained with the program. 
Other crucial assistance received included four rounds of CARES 
grants, $25,000 in American Rescue Plan Stabilization Funds, a 
payment protection plan loan, unemployment insurance, and COBRA 
coverage when my husband lost his job after almost 30 years 
with the same company.

    Finally, a Small Business Administration loan of $46,000. 
This loan was needed to keep my program doors open and a roof 
over our head since regardless of all the help, operational 
expenses increased dramatically. My life during the COVID-19 
pandemic was about survival. In a lot of ways, it still is.

    I want to reiterate that the relief funding was critical to 
saving the childcare industry, and more specifically, my own 
business. I believe more providers would have closed if 
Congress did not act significantly and swiftly. But systemic 
challenges persist. For example, I have vacant slots I cannot 
fill without an additional staff person.

    I recently interviewed a young woman who was well 
qualified, but as I shared the pay, she declined. Virginia 
recently piloted a new solution to address the childcare staff 
crisis. They will attract and train new people to work in 
childcare programs if we agree to pay $17 an hour for 1 year.

    This is a great step, but I currently pay $12 an hour and 
cannot afford this increase. Good policy solutions without 
additional sustained funding will not work. I want to pay more 
since my staff deserve more, but I want to stress that I will 
go out of business without additional sustained funding.

    Furthermore, I hear from many family childcare providers 
who are disproportionately women of color that they are close 
to closing and leaving childcare altogether. According to a 
recent report by NAFCC and NAEYC, 40 percent of respondents 
from family childcare homes reported that they are considering 
leaving their program or closing their family childcare home, 
primarily due to the low compensation and funding.

    We must invest in laying a firm foundation for all 
children, not just the ones from wealthy families. Families 
need different options which are not available without 
additional sustained funding. Again, thank you for this 
opportunity.

    [The prepared statement of Ms. Morman follows:]

                  prepared statement of cheryl morman
    My name is Cheryl Morman, and I have owned and operated Blessings 
From Above Child Development Center, a family child care program in 
Richmond, Virginia, for over 20 years. I am the current president of 
the Virginia Alliance for Family Child Care Associations (VAFCCA), the 
only statewide association in Virginia solely focused on family child 
care, which refers to small child care programs operated from someone's 
home. I am a member of the National Association for Family Child Care, 
which supports FCC throughout the country as educators make the 
intentional professional choice to offer high-quality early care and 
education in their homes. I was recently selected for the Early 
Childhood Advisory Committee (ECAC) to represent publicly funded family 
child care providers. As an ECAC member, I will help shape the unified 
early childhood care and education system in the Commonwealth to 
improve access to high-quality early childhood care and education so 
that all Virginia children will be well prepared for school and life.

    I am a wife, a mother, a grandmother, and an educator. I have been 
married to a wonderfully supportive husband for 27 years. We have two 
sons and three beautiful grandchildren between the ages of four and 
one, who simultaneously wear me out and bring me great joy.
  Before the COVID-19 Pandemic, despite the essential role my program 
played for families, there was not enough support to assist families in 
                         accessing child care.
    I am licensed to care for 12 children between 6 weeks to 5 years of 
age. Before COVID, I remained full with a waiting list. I had two full-
time teachers along with myself. I was able to maintain payroll and my 
expenses. I could only pay my employees a minimum wage of $12/hour and 
could not offer health benefits. My access to health insurance came 
through my husband's employer. Whenever the child care program fell 
short, we would have to rely on my husband's stable income. Sometimes 
parents struggled to make the tuition payments, but they made too much 
money to qualify for the subsidy. I would develop flexible payment 
arrangements with families to ensure their children could remain in my 
program. However, I couldn't make payment arrangements for my expenses. 
I still had to pay my staff and buy food for my child care program.

    I participated in the Virginia Quality Birth to Five program to 
continue ensuring I was meeting our families' needs and the development 
of the children entrusted in my care. We also participated in the Child 
and Adult Care Food Program and offered healthy and nutritious meals to 
children.

    We always used a developmentally appropriate curriculum that helped 
their development in the classroom and offered ideas to carry over to 
home. FCC educators disproportionately care for infants and toddlers 
and children from low-income families, families of color including 
Black, Latinx, immigrant, and Indigenous, as well as families living in 
rural communities. We were one big family. We provided occasional date 
night services and opportunities for families to connect as their 
children formed trusting relationships with their peers.

    Before the COVID-19 pandemic, one of my priorities was advocating 
for an increase in the Child Care Development Block Grant (CCDBG) 
reimbursement rates for providers. Before COVID, my program was full 
with 12 children enrolled; however, only the family of one of the 
children had subsidy assistance. I wanted to care for more children on 
the subsidy, but there were two significant challenges. First, the 
rates for all providers, regardless of setting, were significantly 
lower than the cost of providing high-quality care. The issues were 
even more challenging for family childcare providers who were 
reimbursed at an even lower rate. My rate was more than the rate set by 
the Department of Social Services, which means the difference would 
either be absorbed by the parents, who couldn't afford much more, or 
myself. Second, the subsidy payments are not made until 1.5 months 
after I provide the care, and I could not afford to wait this long for 
the reimbursement. It has always been challenging to sustain our 
programs, but we made it work to provide the care and early learning 
opportunities families need.
When COVID began, child care programs like mine struggled to stay open 
   for families, but the historic child care relief funds saved the 
                                sector.

    Then COVID hit. We continued to stay open using the reserved 
cleaning supplies and paper products. We shopped in bulk but quickly 
ran out of supplies and needed help finding what we needed. Shopping 
was done early in the mornings before our programs opened. This helped 
us to reduce the amount of contact with others in stores. I also had to 
help with remote learning for two school-aged children enrolled in my 
program.

    Many daycare facilities began to close; however, many family child 
care facilities continued to operate according to an NAFCC survey, one-
third of all FCC programs remained open. We depended on one another to 
get information out. Family child care providers did their best to keep 
their doors open and environments safe.

    The funding provided by Congress for Covid-19 relief, particularly 
$50 billion since December 2020, helped me stabilize and get through 
without sacrificing critical services to the parents I serve. To help 
families with the cost of child care, the Federal funding allowed the 
state to increase the income eligibility and do away with their co-pay, 
which meant more families could qualify for childcare assistance.

    My program went from 11 private pay families before COVID to 3 
privately paying families and six families using childcare subsidies. 
Some were new families, and some were families I had cared for before, 
but they now qualified for child care assistance. Eventually, the state 
also increased the number of absences covered, providing resources 
based on enrollment rather than attendance. If that child or family had 
COVID or was exposed to COVID and had to be out for 7--10 days, the 
provider still received tuition, and the child remained with the 
program. Other crucial assistance received included: up to 4 rounds of 
CARES grant; $25,000 in American Rescue Plan Stabilization Funds; a 
Payment Protection Plan (PPP) loan; unemployment insurance and COBRA 
coverage when my husband lost his job after almost 30 years with the 
same company; and finally, a Small Business Administration loan of 
$46,000. This loan was needed to keep my program doors open and a roof 
over our heads since operational expenses increased dramatically 
regardless of all the help. I installed humidifiers to help with 
airflow and individual desks to help with social distancing. I bought 
new age-appropriate materials and supplies to keep children engaged. We 
also expanded our playground area to give children more freedom to play 
and enjoy the outdoors. My life during the COVID-19 pandemic was about 
survival, and in many ways, it still is.
   We must build on the success of the child care funding to ensure 
  children are well prepared, families have access to care that meets 
  their needs, and child care providers have compensation and respect 
               worthy of their contributions to society.
    The emotional, physical, and financial strains continue. We're not 
wearing a mask, but we are fighting to keep our heads afloat daily. I 
want to reiterate that the relief funding was critical to saving the 
child care industry and, more specifically, my business. More providers 
would have closed if Congress did not act significantly and swiftly. 
But systemic challenges persist. For example, I am fully enrolled in 
VA's Child Care Subsidy program, but I have vacant slots I cannot fill 
without an additional staff person. I recently interviewed a young 
woman who was well qualified, but as soon as I shared the pay, she 
declined. Virginia recently piloted a new solution to address the child 
care staffing crisis. VA will attract and train new people to work in 
child care programs if we agree to pay $17/hour for 1 year. This is a 
great step, but I currently pay $12/hour and cannot afford this 
increase. Good policy solutions without additional, sustained funding 
will not work. I want to pay more since they deserve more, but I want 
to underscore that I will go out of business without additional, 
sustained funding.

    Furthermore, as the President of the VA FCC Alliance, I hear from 
many FCC providers in VA that they are close to closing and leaving 
child care altogether. According to a recent report by NAFCC and NAEYC, 
40.2 percent of respondents from FCC homes reported that they are 
considering leaving their program or closing their FCC home.

    We can't charge the true cost of care because, without additional 
funding, parents can't afford the rate. We know FCC is 
disproportionally relied on by families of color, families working non-
traditional hours, low-income families, and families with infants & 
toddlers. So as more FCC programs close, we should be concerned about 
what will happen to the most vulnerable children.

    When I look at children enjoying free play in my classroom, I see a 
room where stars are born, and professions are made. Skills are being 
developed to handle rejection, disappointment, discomfort, unfairness, 
empathy, love, kindness, respect, gentleness, and self-control. I see 
conflict resolution, compromise, negotiations, and the power to agree 
to disagree and walk away. Is this an area you want to make cuts in?

    We must invest in laying a firm foundation for ALL children, not 
just the ones from wealthy families. Our future depends on it. The 
children we have in our programs won't be children forever. Families 
need different options, and these options are not available without 
additional, sustained funding.

    Thank you for this opportunity.
                                 ______
                                 
                  [summary statement of cheryl morman]
    I am Cheryl Morman, President of the Virginia Alliance of Family 
Child Care Associations (VAFCCA). We are the only state association in 
Virginia focusing on family child care, which refers to small child 
care programs operated from someone's home. I have been a licensed 
Family Child Care Business Owner and Educator since 2002. I am a wife, 
mother, grandmother, and an educator. I am licensed to care for 12 
children between 6 weeks to 5 years of age. I employ one assistant 
teacher. As you examine the Child Care crisis across the Nation, I urge 
you to keep my story in mind:

          Before Covid-19, running my business as a family 
        child care provider was challenging but the demand was so great 
        that I often had a waiting list. Some parents would struggle to 
        pay for child care, yet they made too much to qualify for child 
        care assistance.

          When Covid-19 hit, family child care providers did 
        their best to keep their doors open and the environment safe.

          The Federal Covid relief funding was crucial for my 
        State of Virginia to help providers and families.

          To help families with the cost of child care, the 
        state increased income eligibility, meaning families could 
        afford child care.

          I could avail myself of CARES grants for a total of 
        $25,000, a small PPP loan, and an Economic Injury Disaster Loan 
        (EIDL), and I secured a Small Business Administration Loan for 
        $46,000.

          My life during Covid was all about survival; in many 
        ways, it is still about that.

          We cannot charge the true cost of care because, 
        without additional funding, parents cannot afford the rate.

          Policy solutions without resources will not work and 
        will perpetuate the crisis. We need public funding in a mixed 
        delivery child care system so that all available options are 
        available for families.

                                 ______
                                 
    The Chair. Thank you very much.

    Let me turn the mic over to Senator Cassidy.

    Senator Cassidy. Thank you, Chair Sanders. We are joined 
today by Ms. Carrie Lukas, President of the Independent Women's 
Forum. Ms. Lukas joins us as a policy expert, advocate, and 
mother of five kids, a graduate of Princeton and of Harvard's 
Kennedy School of Government.

    Ms. Lukas can speak to what parents want and need, the 
appropriate role of the Federal Government in helping to 
address childcare issues, and her experience as a working mom. 
We look forward to her testimony on the choices, why childcare 
should not operate like a K through 12 public school, and what 
the evidence says about Government run institutional 
childcare's impact on children.

    We welcome Ms. Lukas and look forward to her testimony.

   STATEMENT OF CARRIE LUKAS, PRESIDENT, INDEPENDENT WOMEN'S 
                     FORUM, WASHINGTON, DC

    Ms. Lukas. Thank you very much. Good morning, I am Carrie 
Lukas, and I am President of Independent Women's Forum. 
Independent Women's Forum is a nonprofit organization dedicated 
to developing and advancing policies that aren't just well-
intended but that actually enhance people's freedoms, 
opportunities, and well-being. I am a mother of five children 
between the ages 8 and 17.

    As you consider policies designed to help parents of young 
children, I urge you to keep the following principles in mind. 
First, American families want choices, not a one size fits all 
Government daycare regime. The premise of today's hearing is 
that there is a crisis, making sweeping intervention necessary.

    Yet reality is different. Many parents absolutely do face 
significant challenges related to accessing and affording 
childcare, but there are many that are also satisfied with 
their existing arrangements.

    In fact, a 2021 bipartisan Public Policy Center survey 
found that two-thirds of single parent and two working parent 
households were using what they considered their ideal 
childcare arrangement. That is important because while 
policymakers should seek to help those in need, we also don't 
want to disrupt those--the situation for those for whom their 
situation is working.

    Critically, surveys also suggest that most parents do not 
perform formal daycare settings. A 2022 report of the 
bipartisan Policy Center found that nearly 6 in 10 parents 
preferred informal childcare over formal childcare centers. And 
that is even if formal childcare was free and in a convenient 
location.

    Most parents in American simply think that having family or 
family like care is best for children. But second, don't make 
childcare and preschools operate like our K-through-12 public 
school system.

    At the height of the COVID pandemic, according to the 
Department of Health and Human Services, about 60 percent of 
childcare centers were closed. But by the end of 2020--at the 
end of 2020, an estimated 73 percent of childcare centers had 
opened. In contrast, at the end of 2020, only about one-third 
of K through 12 public schools were providing fully in-person 
services.

    The private schools had largely opened, but most public 
schools fought to stay closed for as long as possible. And 
public schools behave this way because they do not see parents 
and students as their customers. And why would they? Their 
ability to pay the bills and keep their jobs depends on 
pleasing Government officials, not on serving families.

    In fact, we should be warned that all the battles we see 
over public K-through-12 today, over curriculums, the use of 
pronouns, sex-ed, masking policies, they will come to your 
local daycare and preschool if Government becomes the primary 
funder and sets the rules for what constitutes an approved 
daycare provider.

    Parents should fight to keep this from becoming the 
situation for our childcare and preschools. Third, Government 
officials can and should perform--pursue reforms to make 
daycare more affordable and accessible. And to start, 
policymakers at all levels of Government should seek to 
eliminate regulations that are not directly related to safety 
and true quality.

    A study by the Mercatus Center found that cost of care 
could be reduced by as much as $1,900 per child per year by 
eliminating regulations not directly related to quality of 
care. And during COVID, policy leaders around the country, 
Democrats as well as Republicans, did lift state care 
regulations to encourage the creation of additional daycare 
options.

    Policymakers should explore the consequences of this 
deregulation and continue to eliminate regulations that don't 
make sense. Next, financially support families, not daycare 
providers, and use the money wisely.

    Rather than shoveling more taxpayer money into Government 
bureaucracies, policymakers ought to provide tax relief for 
parents or direct support to parents so they can make the 
choices that make sense for them. Importantly, policymakers 
should not make financial support conditional on childcare 
arrangements. Incentivizing the use of paid childcare isn't 
fair to the families who have loved ones, parents, 
grandparents, aunts, and neighbors who provide loving care for 
children in their lives for free while forgoing paid 
employment.

    Having family members like grandparents as caregivers is 
good for kids as well as their grandparents. We should not 
effectively discourage or crowd out these relationships by 
incentivizing only paid childcare.

    Finally, Government approved daycare isn't necessarily good 
for kids. Your--Government funding for childcare is often sold 
as a sure-fire way to improve life outcomes for children, 
particularly from low-income families. However, the evidence 
simply doesn't bear this out. Congressionally mandated studies 
of Head Start have failed to show lasting benefits for 
participants.

    A recent study in Tennessee of the state-run pre-K revealed 
it had long term negative effects on children's achievement and 
behavior. This doesn't mean that there are no studies that will 
find benefits associated with preschool, nor does it mean that 
daycare and childcare aren't a necessary and important service 
for millions of children and families.

    But it should encourage some humility and caution 
policymakers away from trying to push all students into 
Government approved childcare centers, since that could do more 
harm than good. Thank you.

    [The prepared statement of Ms. Lukas follows:]

                   prepared statement of carrie lukas
    Good morning, I'm Carrie Lukas, President of Independent Women's 
Forum. Independent Women's Forum is a nonprofit organization (501c3) 
dedicated to developing and advancing policies that aren't just well-
intended, but actually enhance people's freedom, opportunities, and 
well-being.

    I'm also the mother of five children between the ages of 8 and 17. 
I've been a stay-at-home mom without paid child care, and I've also 
used a variety of different paid childcare arrangements. As you 
consider policies designed to help parents of young children, I urge 
you to keep the following principles in mind:
 1. American Families Want Choices, Not a One-Size-Fits-All Government 
                             Daycare Regime
    The premise of today's hearing is that there is a childcare 
``crisis'' making sweeping government intervention necessary. Yet the 
reality is different: many parents face significant challenges related 
to accessing and affording child care, but many are also satisfied with 
their existing arrangements. In fact, a 2021 Bipartisan Public Policy 
Center Survey found that two-thirds (66 percent) of families with a 
single parent or two working parents say they were using their ideal 
childcare arrangement in January 2020. That's important because 
policymakers should seek to help those who need it, but also not 
disrupt arrangements that are working for parents.

    Critically, surveys also suggest that most parents do not prefer 
formal daycare settings. A 2022 report by the Bipartisan Policy Center 
and Morning Consult found that nearly six in ten parents preferred 
informal child care over formal child care centers, even if formal care 
was free and in a convenient location. Most parents and Americans 
simply think that having family or family like care is best for 
children. \1\
---------------------------------------------------------------------------
    \1\  See Linda Smith, Sarah Tracey, Ben Wolters, ``Are Parents' 
Child Care Preferences Changing? Overview of BPC's Parent Survey,'' 
Bipartisan Policy Center, 2021. https://bipartisanpolicy.org/blog/are-
parents-child-care-preferences-changing--overview-of-bpcs-parent-
survey/. And Nikki Graf, ``Most Americans say children are better off 
with a parent at home,'' Pew Research Center, 2016. https://
www.pewresearch.org/short-reads/2016/10/10/most-americans-say-children-
are-better-off-with-a-parent-at-home

    This should caution against imposing proposals like the Child Care 
for Working Families Act which would heavily incentivize the use of 
institutional day care--parents' least preferred option.
   2. Don't Make Child Care and Preschools Operate Like K-12 Public 
                                Schools
    Our recent experience with COVID demonstrated why we should reject 
any public policy change that would make our childcare and preschool 
systems function more like our K-12 public schools.

    I have five children in public schools and, like many working 
parents, during the COVID pandemic, that meant I had to juggle my job 
along with managing my kids' schooling online. Where I live, most 
private schools provided in-person service by the fall of 2020, but our 
public schools fought to stay closed for as long as was politically 
possible, until mid-April 2021. That was long after it made any sense 
from a COVID and health perspective; long after teachers had been given 
priority access to vaccines; and long after it was obvious that it was 
an utter catastrophe in terms of emotional health and lost learning for 
students--particularly for children from low-income families, those 
with disabilities, and those for whom English is a second language.

    The failures of our K-12 public schools contrast with the childcare 
sector. At the height of the pandemic, according to the Department of 
Health and Human Services, about 60 percent of childcare centers closed 
and enrollment fell by about 70 percent. But many stayed open to serve 
the children of critical workers. And by the end of 2020, an estimated 
73 percent of daycare, preschool, and childcare programs had opened.

    In contrast, at the end of 2020, only about a third of K-12 public 
schools were providing fully in-person services. Public schools behaved 
this way because they do not see parents and students as their 
customers. Why would they? Their ability to pay the bills and keep 
their jobs depends on pleasing government officials, not serving 
families. They know that most families are captive consumers; escaping 
to another school is financially out of reach. Parents should fight to 
keep this from becoming the situation for our child care and preschool.

    In fact, all of the battles we see raging about public K-12 
schools--over the content of the curriculum, the use of pronouns and 
sex ed, how religion is discussed, and masking policies--will come to 
your local day care and preschool if the government becomes their 
primary funder and sets the rules for what constitutes an approved 
daycare provider. We should also expect union-driven disruptions 
similar to those parents have endured during K-12 teacher strikes and 
COVID-era school closures.

    Head Start shows just some of the problems you can expect with 
Federal management of child care. Head Start programs provide fewer 
hours at a higher cost than other daycare programs. They also have been 
found to be ripe with fraud and abuse, and even have had significant 
safety lapses. The 3-and 4-year-olds in Head Start facilities were 
forced to wear masks long after mandates were lifted for adult-
dominated spaces; long after they'd been safely removed from other 
schools; and long after the evidence showed that disposable masks not 
only didn't help prevent the spread of COVID but probably hurt kids 
speech and emotional development. Why were Head Start kids specifically 
targeted for these masking policies? Because they are at the mercy of 
regulators who could use them to virtue signal. This is simply wrong 
and Americans should reject putting more children under this Federal 
regime.
3. Reduce Regulations to Increase the Quantity of Daycare Providers and 
                     Diversity of Daycare Providers
    There are ways that government officials can make day care more 
affordable and accessible. To start, policymakers at all levels of 
government should seek to eliminate regulations that are not directly 
related to safety and true quality so that a greater diversity of 
providers--especially smaller and at-home providers--enter the 
marketplace so parents have more and better options.

    A study by the Mercatus Center found that costs of care could be 
reduced by between $850 and $1,890 per child per year by eliminating 
regulations not related to the quality of care. A review of childcare 
regulations around the country reveals ludicrous examples of 
regulations dictating the minutiae of daycare facilities such as very 
specific art supplies and the number and size of balls and other toys, 
which clearly just create headaches and drive up costs for providers. 
These should be rescinded.

    During COVID, policy leaders around the country, including 
Democrats as well as Republicans, lifted daycare regulations to 
encourage the creation of additional daycare options. Policymakers 
should explore the consequences of this deregulation and make permanent 
the elimination of regulations that have been found unnecessary.

    In fact, in spite of the tremendous disruption during COVID, the 
2022 data released by Child Care Aware of America showed that the 
number of licensed childcare centers today exceeded the number open 
pre-pandemic. States around the country have been enacting a variety of 
new childcare-related initiatives, which will provide helpful examples 
of what works and what doesn't. \2\ That's progress that we should seek 
to continue and the Federal Government shouldn't disrupt.
---------------------------------------------------------------------------
    \2\  Dana Goldstein, ``With Child Care Scarce, States Try to Fix `a 
Broken Market,' '' New York Times, 2022. https://www.nytimes.com/2022/
06/18/us/child-care-state-regulations.html.
---------------------------------------------------------------------------
 4. Financially Support Families, Not Daycare Providers--and Use Money 
                                 Wisely
    Policymakers considering investing tens of billions more taxpayer 
dollars in our childcare sector should first do some serious oversight 
of how existing funding for that sector is being used. Again, our 
experience during COVID is alarming in terms of reckless spending and 
zero accountability for the use of taxpayer money.

    All of this government overspending and waste has had real 
consequences, helping fuel the runaway inflation which is making it 
harder and harder for American families to get by. Rather than 
shoveling more money into a government bureaucracy, policymakers ought 
to provide tax relief for parents, especially parents who have young 
children, since they often face the largest expenses.

    Importantly, policymakers should not make financial support 
conditional on childcare arrangements. Incentivizing the use of paid 
child care isn't fair to all the families with loved ones--parents, 
grandparents, aunts, and neighbors--who provide loving care for 
children in their lives for free, while forgoing paid employment. 
Having family members like grandparents as caregivers is good for kids 
and for the grandparents themselves. We should not effectively 
discourage or crowd out these relationships.
    5. Government-Approved Day Care Isn't Necessarily Good for Kids
    Government funding for child care is often sold as a surefire way 
to improve life outcomes for children, particularly from low-income 
families. However, the evidence simply doesn't bear this out. 
Congressionally-mandated studies of Head Start have failed to show 
lasting benefits for participants. A recent study in Tennessee of 
state-run pre-K revealed it has long-term negative effects on 
children's achievement and behavior.

    This doesn't mean that no study will ever find benefits associated 
with preschool, nor does it mean that day care and child care aren't a 
necessary and important service for millions of children and families. 
But it should encourage some humility and caution policymakers away 
from trying to push all children into government-approved childcare 
centers since it could do more harm than good.

    Thank you.
                   Additional Background Information
    ``K-12 Pandemic Related Public Schools Disruptions,'' Burbio, 2022. 
https://cai.burbio.com/school-opening-tracker/.

    ``Impact of the Coronavirus (COVID-19),'' U.S. Department of 
Education, 2022. https://nces.ed.gov/pubs2022/2022019.pdf.

    K. Durkin, M. W. Lipsey, D. C. Farran, S. E. Wiesen, ``Effects of a 
statewide pre-kindergarten program on children's achievement and 
behavior through sixth grade,'' Developmental Psychology, 2022. https:/
/psycnet.apa.org/doiLanding.

    Dan Lips, ``Why Congressional Democrats should rethink their 
universal pre-k plan,'' The Hill, 2022. https://thehill.com/blogs/
congress-blog/education/594204-why-congressional-democrats-should-
rethink-their-universal-.

    Carrie Lukas, ``Two Truths And A Lie: The Return On Investment Of 
Government's Childcare Subsidies,'' Independent Women's Forum, 2021.

    Rick Hess, ``Biden's `Build Back Better' Bill Could Decimate the 
Child-Care Landscape,'' Education Week, 2021. https://www.edweek.org/
teaching-learning/opinion-bidens-build-back-better-bill-could-decimate-
the-child-care-landscape/2021/12.

    Dan Lips, ``Focusing Federal Preschool Funding on the Children Who 
Need It,'' Foundation for Research on Equal Opportunity, 2021. https://
freopp.org/give-low-income-families-head-start-accounts-to-improve-
equal-opportunity--9639c6a7270d.

    Jonathan Butcher and Jude Schwalbach, ``Head Start's Contagion of 
Fraud and Abuse,'' Heritage Foundation, 2020. https://www.heritage.org/
education/report/head-starts-contagion-fraud-and-abuse.

    ``Child Care Facilities: Federal Agencies Need to Enhance 
Monitoring and Collaboration to Help Assure Drinking Water is Safe from 
Lead,'' U.S. Government Accountability Office, 2020. https://
www.gao.gov/products/gao--20--597.

    Carrie Lukas and Charlotte Whelan, ``America Needs Better Daycare 
Options,'' Heritage Foundation, 2020. https://www.heritage.org/sites/
default/files/2020-09/BG3526.pdf.

    Dan Lips, ``Improving the Value of Head Start for Working 
Parents,'' Foundation for Research on Equal Opportunity, 2019. https://
freopp.org/improving-the-value-of-head-start-for-working-parents--
739472566ec1.

    Steven E. Rhoads and Carrie Lukas, ``The Uncomfortable Truth about 
Daycare,'' National Affairs, 2016. https://www.nationalaffairs.com/
publications/detail/the-uncomfortable-truth-about-daycare.

    S.G. Beverly, M.M Clancy, M. Sherraden, ``Universal accounts at 
birth: Results from SEED for Oklahoma Kids (CSD Research Summary No. 
16-07).'' Brown School at Washington University Center for Social 
Development, 2016. https://csd.wustl.edu/items/seed-for-oklahoma-kids-
seed-ok/.

    Diana Thomas and Devon Gorry, ``Regulation and the Cost of Child 
Care,'' Mercatus Center, 2015.

    Dan Lips and David Muhlhausen, ``Head Start Earns an F: No Lasting 
Impact for Children by First Grade,'' Heritage Foundation, 2010. 
https://www.heritage.org/education/report/head-start-earns-f-no-
lasting-impact-children-first-grade.
                                 ______
                                 
                  [summary statement of carrie lukas]
    I'm Carrie Lukas, President of Independent Women's Forum. 
Independent Women's Forum is a nonprofit organization (501c3) dedicated 
to developing and advancing policies that aren't just well-intended, 
but actually enhance people's freedom, opportunities, and well-being.

    I'm also the mother of five children between the ages of 8 and 17. 
I've been a stay-at-home mom without paid child care and I've also used 
a variety of different paid childcare arrangements.

    As you consider policies designed to help parents of young 
children, I urge you to keep the following principles in mind:

          1. American Families Want Choices, Not a One-Size-
        Fits-All Government Daycare Regime

          2. Don't Make Child Care and Preschools Operate Like 
        K-12 Public Schools

          3. Reduce Regulations to Increase the Quantity of 
        Daycare Providers and Diversity of Daycare Providers

          4. Financially Support Families, Not Daycare 
        Providers--and Use Money Wisely

          5. Government Approved Day Care Isn't Necessarily 
        Good for Kids

                                 ______
                                 
    The Chair. Thank you very much, Ms. Lukas.

    Senator Cassidy.

    Senator Cassidy. I am sorry. We also welcome Ms. Kathryn 
Larin, Director of the Government Accounting Office's Education 
Workforce and Income Security Team. Ms. Larin oversees GAO's 
work on a variety of issues impacting low income and vulnerable 
populations, including childcare, child welfare, and economic 
assistance programs.

    Today, Ms. Larin will speak to what the data shows about 
how states use supplemental childcare funding, and how complete 
data on the way states use the funding will not be available 
for another few years.

    Her testimony will detail the challenges states experience 
managing more Federal funding than they had ever received, and 
difficulties getting money to providers quickly. We look 
forward to Ms. Larin's testimony about what we can say 
definitively about how states used their supplemental pandemic 
childcare funding.

 STATEMENT OF KATHRYN LARIN, DIRECTOR IN EDUCATION, WORKFORCE, 
    AND INCOME SECURITY, GOVERNMENT ACCOUNTABILITY OFFICE, 
                         WASHINGTON, DC

    Ms. Larin. Thank you. Good morning, Chairman Sanders, 
Ranking Member Cassidy, and Members of the Committee. Thank you 
for inviting me here today to discuss GAO's work on states' use 
of COVID-19 pandemic related funding for childcare.

    The Federal Government has long invested in childcare as a 
key support for workers to help them become self-sufficient. 
During the pandemic, Congress appropriated more than $52 
billion in supplemental funding, including to the Child Care 
and Development Fund, the Nation's key Federal program for 
subsidizing childcare.

    This was to help stabilize the sector and ensure that some 
families would have access to childcare. My testimony today 
will address two items, how states used pandemic relief 
childcare funds and flexibilities, and past and continuing 
challenges states face in spending these funds.

    First, regarding state spending of supplemental funds, as 
of April 2023, states had spent approximately $34.5 billion of 
the $52.5 billion in supplemental funding that Congress 
appropriated. The majority of the unspent funds, $11.7 billion, 
were provided through the American Rescue Plan, and states have 
until September 2024 to spend them.

    The rest must be spent by the end of this Fiscal Year, 
September 2023. According to a survey that we conducted in 2020 
and interviews we have had with state officials since then, 
states used supplemental funds for various purposes, including 
to provide childcare to essential workers and to support 
childcare centers experiencing temporary closures and decreased 
enrollment.

    States have also taken advantage of new flexibilities 
offered through this supplemental funding, for example, by 
changing the way they pay providers or by waiving or reducing 
family co-payments. And there is some evidence that the funds 
have helped accomplish what they were meant to do, stabilize 
the childcare industry.

    More generous, absent state policies and paying providers 
based on enrollment rather than attendance, kept some providers 
open when enrollment was low or fluctuating. More providers 
joined state programs, providing them with a reliable source of 
income during volatile times and allowing them to stay open.

    After an initial steep decline, employment in the childcare 
sector has steadily increased, though it has not yet rebounded 
to pre-pandemic levels. However, given the times states have to 
spend the remaining funds and significant lags in reporting of 
data, a full accounting of how all the pandemic funds are being 
spent will likely not be available until 2025 or 2026.

    Turning now to challenges states face in spending the 
funds. We interviewed child--state childcare officials in seven 
states in the fall of 2022, and they said they faced both short 
term and long-term challenges adapting their subsidy programs 
to use the supplemental funding, in some cases before Federal 
guidance was available.

    All seven states told us they faced challenges moving 
quickly after receiving the money. They were tasked with 
managing and distributing the very large increase in funding 
during a compressed timeframe, and some states found it 
challenging to find ways to best meet families and providers' 
needs.

    In addition, states told us they had to think strategically 
about how to manage funds given their time limited nature. Some 
states sought to spend money on one-time items rather than 
addressing long standing challenges. For example, investing in 
IT systems or training, or offering one time signing bonuses to 
new employees rather than raising staffed wages or 
substantially expanding enrollment.

    Other states implemented changes that they would like to 
sustain, but they expressed uncertainty about future funding 
levels and the impact on their programs of reverting to pre-
pandemic eligibility and provider payment policies. Some 
anticipate that having to expel families from the program when 
the funding expires.

    In some supplemental childcare funding provided to the 
Childcare Development Fund and stabilization grants during the 
pandemic provided critical support to both providers and 
families in need of care, but a full accounting of the funds, 
how they are being used, and their full impact will not be 
available for at least the next few years. This concludes my 
statement. I am happy to answer any questions.

    [The prepared statement of Ms. Larin follows:]

                  prepared statement of kathryn larin
    Chairman Sanders, Ranking Member Cassidy, and Members of the 
Committee:

    Thank you for inviting me here today to discuss our work on states' 
use of Federal COVID-19 supplemental child care funds. The Federal 
Government has long invested in child care as a key support for workers 
to help them become self-sufficient. Child care subsidies help some 
low-income families afford child care so parents can work, attend 
school, or participate in job training. The Child Care and Development 
Fund (CCDF) is the largest Federal child care program, providing grants 
to states to improve the affordability, availability, and quality of 
child care. Appropriations for child care through CCDF during the 
COVID-19 pandemic totaled more than $52 billion, representing a 
concerted effort to stabilize the sector and to ensure that low-income 
families would continue to have access to affordable child care. This 
influx of funds also allowed states to invest in quality improvements 
that benefit all children--including those who do not receive 
subsidies. States were also given temporary flexibilities in how they 
administer CCDF programs.

    These efforts to support child care providers and families are 
ongoing, as some of these funds do not expire until September 2023 and 
others expire in September 2024. My statement today discusses (1) 
states' use of Federal COVID-19 relief child care funds and 
flexibilities, and (2) the past and continuing challenges states have 
faced in spending these funds.

    This statement is primarily based on two recent prior reports on 
CCDF. For our October 2021 report, we surveyed state CCDF 
administrators in 50 states and the District of Columbia and asked 
about their uses of supplemental child care funds and flexibilities in 
2020. For our March 2023 report, we interviewed state child care 
administrators in seven selected states in September and October 2022. 
\1\ The work upon which this statement is based was conducted in 
accordance with generally accepted government auditing standards. Those 
standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe that 
the evidence obtained provides a reasonable basis for our findings and 
conclusions based on our audit objectives.
---------------------------------------------------------------------------
    \1\  For our prior work see GAO, COVID-19: Additional Actions 
Needed to Improve Accountability and Program Effectiveness of Federal 
Response, GAO-22-105051 (Washington D.C.: Oct. 27, 2021); Child Care: 
Subsidy Eligibility and Use in Fiscal Year 2019 and State Program 
Changes during the Pandemic, GAO-23-106073 (Washington, DC.: Mar. 29, 
2023).
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                               Background
    CCDF is the primary source of Federal funding to help low-income 
families pay for child care. The Department of Health and Human 
Services (HHS) Office of Child Care administers the CCDF at the Federal 
level and provides guidance and technical assistance to states on how 
to operate their subsidy programs. Under CCDF, states have substantial 
flexibility to establish their own eligibility criteria that determine 
which low-income working families will receive subsidies to help them 
pay for child care. On average, 1.43 million of the estimated 8.7 
million children eligible for child care subsidies in their states 
received them from CCDF funds in a given month in fiscal year 2019. \2\ 
The gap between the number of low-income working families whose 
children could benefit from child care subsidies, and the number who 
actually receive subsidies, is long-standing.
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    \2\  A total of 2 million children were served on average each 
month through all Federal and state funding streams.

    As we reported in March 2023, nearly all state child care 
administrators and child care experts we interviewed in 2022 said that 
the pandemic placed unprecedented strain on child care providers and 
working families. \3\ Child care providers faced temporary and 
permanent closures. According to one report, nearly 16,000 child care 
centers and licensed family child care programs closed permanently 
between December 2019 and March 2021. \4\ Many child care workers left 
the sector for higher paying jobs, leading to worker shortages as 
demand for child care started to increase. Providers were also tasked 
with updating their policies and programs to reflect constantly 
changing health and safety requirements and paying for personal 
protective equipment once they were able to re-open. Meanwhile, parents 
who lost their jobs as businesses suspended their operations or closed 
needed child care support while they searched for new jobs or sought 
educational activities to enhance their employment
---------------------------------------------------------------------------
    \3\  We interviewed the state child care administrators in 
September and October 2022 in seven selected states: California, 
Colorado, Connecticut, Georgia, Michigan, New Mexico, and Texas. See 
GAO-23-106073 .
    \4\  Child Care Aware of America, Demanding Change: Repairing our 
Child Care System (Arlington, VA: Feb. 2022). prospects. Finding and 
paying for child care became more of a struggle for these parents.

    Data from mid-2022 shows the child care sector recovering, although 
at this point it is not yet known whether employment has returned to 
pre-pandemic levels. Employment in the child care industry dropped 35 
percent in April 2020 compared to early 2020, according to a recent HHS 
analysis. \5\ After this initial decline, employment steadily increased 
and reached 92 percent of February 2020 levels by November 2022. As a 
result, on average, child care providers had more than 1.5 fewer 
employees in June 2022 than in January 2020, with impacts for both 
providers and families.
---------------------------------------------------------------------------
    \5\  Crouse, G., Ghertner, R., and Chien, N. The Impact of the 
COVID-19 Pandemic on the Child Care Industry and Workforce. (Office of 
the Assistant Secretary for Planning and Evaluation, U.S. Department of 
Health and Human Services, January 2023).

    In 2020 and 2021, Congress appropriated more than $52 billion in 
Coronavirus Aid, Relief, and Economic Security (CARES) Act and other 
COVID-19 supplemental funds for CCDF to help states prevent, prepare 
for, and respond to the COVID-19 pandemic (see table 1). This was a 
large-scale increase in CCDF funds; in fiscal year 2019, CCDF 
allocations were $8.1 billion. \6\
---------------------------------------------------------------------------
    \6\  Additional sources of Federal funding for child care subsidies 
include Temporary Assistance for Needy Families and the Social Services 
Block Grant. The Federal Government and states spent an estimated total 
of $11.1 billion to subsidize child care through these programs in 
fiscal year 2019, according to HHS.

    Each supplemental funding source had specific spending rules and 
deadlines for states to obligate and spend funds. States were also 
provided flexibilities in how they could use their CCDF funds. For 
example, according to HHS, states were allowed to waive family co-
payments for all families using child care subsidies, which is 
generally not allowable. \7\
---------------------------------------------------------------------------
    \7\  Waiving co-payments for all families generally is not 
allowable under CCDF, but was allowed temporarily for states with a 
CCDF waiver or using Coronavirus Response and Relief Supplemental 
Appropriations Act, 2021 funds, according to HHS officials. See https:/
/www.acf.hhs.gov/sites/default/files/documents/occ/summary--of--
waiver--approvals.pdf for additional information on approved waivers.

    As we reported in October 2021, states reported using a variety of 
strategies to support child care providers and families in 2020, 
including helping essential workers pay for care and paying child care 
providers based on enrollment rather than attendance, according to 
states' response to our National survey. \8\ In a more recent study, 
HHS officials
---------------------------------------------------------------------------
    \8\  We surveyed state CCDF administrators in 50 states and the 
District of Columbia and asked about their uses of supplemental child 
care funds and flexibilities in 2020. Our survey was administered 
between January and March 2021 and asked states to report on four 
points in time: March 31, June 30, September 30, and December 31, 2020. 
All but one state responded to our survey. For additional information, 
see GAO-22-105051.

    Page 4 GAO-23-106833 Child Care reported states' use of similar 
strategies. \9\ When asked about how they used CCDF CARES Act funds or 
planned to use Coronavirus Response and Relief Supplemental 
Appropriations Act (CRRSA) funds, states most commonly noted that they 
provided assistance to child care providers experiencing temporary 
closures or decreased enrollment and to child care providers not 
previously receiving CCDF funding (see table 2). More than half of 
states used funds to provide child care assistance to essential workers 
regardless of income. Based on preliminary data, HHS has noted that 
compared to 2019, the average monthly number of children served in 2020 
with CCDF funded subsidies increased modestly. \10\ HHS officials 
attribute the fiscal year 2020 increase in the number of children who 
received subsidies to states' use of CARES Act funding and 
flexibilities to serve the children of essential workers who were not 
previously eligible, among other reasons.
---------------------------------------------------------------------------
    \9\  The HHS Office of Planning, Research and Evaluation issued a 
report in July 2022 that provided information about how states changed 
their CCDF policies in response to the COVID-19 pandemic from the 
declaration of the public health emergency on January 31, 2020 to March 
1, 2021. The information was based on administrative data from states 
and territories. According to this report, for some portion of the 
pandemic's first year, 35 states waived co-payments for all families 
and 18 waived income eligibility thresholds for essential workers, 
changes that HHS officials we interviewed said were possible only 
because of the supplemental funds and the flexibility provided to 
states. For more information, see Department of Health and Human 
Services, Appendix to the 2020 CCDF Policies Data base Book of Tables: 
Child Care Subsidy Policies in Response to the COVID-19 Pandemic From 
January 2020 to March 2021, OPRE Report 2022-152 (Washington, DC.: July 
2022).
    \10\  The most recent CCDF eligibility data are from fiscal year 
2019. While fiscal year 2020 eligibility data are not yet available, 
HHS published preliminary 2020 subsidy receipt data in May 2022 that 
showed an increase in the average number of children provided subsidies 
funded only through CCDF to an estimated 1.49 million children in an 
average month.

    When asked about flexibilities they used, states most commonly 
opted to pay providers based on more generous absence day policies (see 
fig. 1). \11\ In its preliminary fiscal year 2020 data, HHS officials 
attributed states' increase in the average monthly CCDF subsidy amount 
to child care providers, in part, to this more generous policy. \12\ As 
we recently reported in March 2023, state child care administrators we 
interviewed in 2022 also said that paying subsidies to providers based 
on enrollment kept some providers from closing during periods of 
fluctuating or low attendance. One state administrator said this change 
incentivized additional providers to join the state subsidy program, as 
subsidies became a reliable source of income for child care providers 
during volatile times. We also found that 32 states waived or reduced 
family co-payments at the start of the pandemic, but over time fewer 
states continued this flexibility. For example, only 22 still had this 
change in effect in December 2020.
---------------------------------------------------------------------------
    \11\  More generous absence day policies were used during the 
pandemic to allow providers to continue receiving CCDF payments if 
their programs closed or children were absent, as a way to help support 
child care businesses during times of low attendance.
    \12\  In fiscal year 2019, providers were paid $504 per month, on 
average nationally, for each child in their care who received a 
subsidy, according to HHS data. HHS's preliminary fiscal year 2020 data 
reflect an increase to $556 per month, on average nationally for each 
child.
---------------------------------------------------------------------------
 Data about Supplemental CCDF Use and Effects after March 2021 Are Not 
                             Yet Available
    We have previously reported on states' use of the supplemental CCDF 
funds early in the pandemic, but data on the full extent of their use 
and impact is not yet available because states have not spent or 
obligated all the funding. \13\ HHS added questions related to states' 
use of COVID-19 supplemental child care funding to the CCDF forms 
states are required to submit to HHS. Specifically, states submit CCDF 
financial reports reflecting their uses of the funds to HHS by 30 days 
after the end of each quarter. In addition, HHS receives information 
from states on their use of American Rescue Plan Act of 2021 (ARPA) 
child care stabilization funds on a new reporting form specific to that 
funding stream. HHS's Office of Child Care also conducts regular 
interviews with states to track their progress in spending COVID-19 
supplemental child care funding, according to HHS officials. States 
continue to submit reports on their spending at the end of each year as 
funds are spent.
---------------------------------------------------------------------------
    \13\  GAO-22-105051.

    As of April 2023, HHS reported that states have spent $34.5 billion 
of the $52.5 billion in COVID-19 supplemental child care funds (see 
table 3). While recent annual obligation data are not yet available, 
HHS officials report that all state child care administrators stated 
that they met the September 30, 2022 obligation deadline for CARES, 
---------------------------------------------------------------------------
CRRSA, and ARPA stabilization funds.

    According to HHS officials, states report quarterly financial data 
that include expenditures and other financial information by each 
COVID-19 supplemental funding source. HHS does not aggregate or publish 
these quarterly data and instead publishes these data on an annual 
basis, which officials said provides a more reliable accounting. 
According to HHS, states make significant adjustments to their reports 
during the year, including changing which funding source is claimed for 
certain obligations, where allowable and appropriate, leaving quarterly 
reports potentially misleading or inaccurate. HHS reported that a 
significant lag in finalizing and publishing data exists due to the 
process of reviewing submissions, following-up with states on missing 
or inconsistent data, and aggregating, clearing, and publishing the 
results. The agency has published comprehensive fiscal year 2020 
financial data and anticipates publishing fiscal year 2021 data in the 
fall of 2023, which will include obligation and liquidation amounts for 
each source of COVID-19 supplemental child care funding as of September 
30, 2021. As a result, a full accounting of how supplemental COVID-19 
funds were spent will likely be available in 2025 or 2026.

    Similarly, data on the number of children eligible for and who 
received child care subsidies is typically available years after the 
end of the fiscal year. The most recent HHS information about the 
number of children eligible for and who received child care subsidies 
is from fiscal year 2019, prior to the appropriation of supplemental 
funds. HHS produces eligibility estimates using a microsimulation model 
that takes time to update every year, resulting in 2-year lag. \14\ 
Therefore, a fuller picture on the use and impact of pandemic-related 
child care spending may not emerge until 2026.
---------------------------------------------------------------------------
    \14\  There generally is a 2-year time lag between the collection 
of Census data that HHS uses to create its eligibility estimates and 
when it releases these data, according to HHS officials. HHS produces 
the eligibility estimates using the Transfer Income Model (TRIM), a 
microsimulation model developed and maintained by the Urban Institute 
under a contract with HHS. This model is based on the Annual Social and 
Economic Supplement of the Current Population Survey. TRIM compares 
family income and work status data, among other factors, from the 
Current Population Survey against CCDF requirements in order to 
generate estimates of the number of children and families eligible for 
subsidies. The baseline TRIM microsimulation takes time to produce in 
part because it analyzes changes in subsidy eligibility requirements in 
each state, as well as changes in requirements for other transfer 
programs and income imputations, among other factors. HHS has not 
finalized fiscal year 2020 subsidy receipt data, but preliminary data 
are available.
---------------------------------------------------------------------------
  State Child Care Administrators Cited Challenges Spending COVID-19 
           Funding and Reported Facing Continued Uncertainty
    As the public health emergency unfolded, states were tasked with 
quickly deciding how to assist vulnerable families and child care 
providers, sometimes before guidance on the use of Federal funds was 
available. State child care administrators we interviewed in 2022 said 
that they faced both short-term and ongoing challenges as they adapted 
their subsidy programs to meet the time-sensitive needs of families and 
child care providers during different phases of the pandemic. They 
specifically cited challenges to managing the influx of funding and 
making decisions that reflected its time-limited nature. State 
administrators are still in the process of spending these funds, but 
noted they are facing uncertainty about how the pandemic funds' 
expiration will affect both child care providers and families.

          Managing influx of funding. While child care 
        administrators we interviewed in 2022 said that they were 
        grateful for the additional financial support for their subsidy 
        program, all seven expressed challenges related to managing and 
        distributing a large influx of funding during a compressed 
        timeframe to address families' and providers' real-time needs. 
        For example, one state administrator discussed the challenge of 
        quickly designing and implementing changes to the state 
        program's IT system to account for changes made to their 
        payment processes.

          Time-limited nature of funding. Amid this stress, 
        state child care administrators tried to make sustainable 
        choices and think strategically about how to use the funds. All 
        seven state administrators we interviewed expressed concerns 
        about the time-limited and one-time nature of the financial 
        support they received during the pandemic. As a result, in some 
        instances, states decided to use funds for one-time purposes 
        rather than to address long-standing challenges. For example, 
        one administrator explained that the state opted to pay one-
        time signing or retention bonuses rather than to raise wages to 
        address long-standing child care worker recruitment and 
        retention challenges.

          Remaining uncertainty for states, families, and 
        providers. State administrators said uncertainty about future 
        funding levels was a concern. In particular, several state 
        child care administrators expressed concern about reverting to 
        restrictive, pre-pandemic income eligibility limits for 
        families and lower rates of payment to providers that do not 
        reflect providers' true cost of delivering quality care. Three 
        state administrators said they were concerned that without 
        additional action they may need to expel families from the 
        program when COVID-19 relief funds expire.

    As we reported in March 2023, child care providers and low-income 
families have faced long-standing challenges. A pre-pandemic 2018 
analysis found that more than half of Americans--51 percent--lived in 
neighborhoods classified as child care deserts, areas with more than 
three young children for every licensed child care slot. \15\ Even when 
high-quality child care is available, many families struggle to pay for 
the cost of this care, with some who receive subsidies paying more than 
7 percent of their income, HHS's benchmark for what may be considered 
affordable, on co-payments. \16\ At the same time, several of the state 
child care administrators and experts we interviewed said that provider 
payment rates often are not sufficient to cover the high cost of 
providing quality care, leading to fewer providers accepting subsidies 
and fewer places for families to use them. As such, addressing these 
and other key challenges would require a sustained effort.
---------------------------------------------------------------------------
    \15\  R. Malik, K. Hamm, et al., America's Child Care Deserts in 
2018, (Washington, DC.: Center for American Progress, December 2018).
    \16\  Child Care and Development Fund Program, 81 Fed. Reg. 67,438, 
67,515 (Sept. 30, 2016). In fiscal year 2019, in five states, families 
on average paid more than 7 percent of their income on their co-payment 
when using a child care subsidy, according to HHS data. When excluding 
families with $0 co-payments, families in 14 states, on average, paid 
more than 7 percent of their income on their co-payment

    We currently have work underway examining whether and how states 
used pandemic child care funding to implement potential long-term 
strategies to help families and child care providers. As part of this 
work, we plan to further examine challenges states faced spending these 
funds. We plan to issue a report on the results of this work in early 
---------------------------------------------------------------------------
2024.

    Chairman Sanders, Ranking Member Cassidy, and Members of the 
Committee, this completes my prepared statement. I would be pleased to 
respond to any questions that you may have at this time.
                                 ______
                                 
    The Chair. Thank you very much. Let me begin the 
questioning. Let me start off with Ms. Groginsky, and I don't 
have a lot of time, so please answer briefly. New Mexico is not 
the most progressive state in the country. It is not the most 
conservative state in the country. You have kind of 
revolutionized the way you do childcare in that state. How do 
the people in New Mexico feel about it?

    Ms. Groginsky. Thank you, Senator----

    The Chair. Talk into the mic, please.

    Ms. Groginsky. Yes, thank you. They are thrilled. I 
traveled the state. I talked to families. I talked to 
providers. I talked to educators. Everybody feels more valued 
and respected.

    The Chair. What the Governor has done and what you have 
done is popular in the state, people feel good about it?

    Ms. Groginsky. Absolutely.

    The Chair. All right. Ms. Hogan, let me ask you, you are an 
expert on children in this country. For a start, how do we 
compare in terms of our childcare with other countries? And 
second of all, in your judgment, given the fact that 
psychologists tell us 0 through 4 is the most important years 
of intellectual and emotional development, how do we treat our 
kids in general?

    Ms. Hogan. Thank you for the question. I think it is really 
important to know that the U.S. does not stack up well compared 
to what other countries have chosen to do, given, 
interestingly, research and information that they base on what 
has happened in the U.S.

    They know from what we have done the promise that exists in 
early childhood education and learning, and they have taken 
that and made the investments that are necessary across 
childcare, of course, but also paid leave and the other ways in 
which we are able to invest in the supports for our children 
and families that are needed.

    The Chair. Okay. Ms. Morman, you--we have heard a lot of 
discussion. You have made one simple fact which I think tells 
us all, as much as we need to know. You mentioned that you are 
paying workers at your facility, which I gather is not a 
Government run, one size fits all. It is a little small, 
private operation that you have, but 11 families, is that 
right?

    Ms. Morman. Yes, sir.

    The Chair. Okay. You mentioned you pay workers in Virginia 
$12 an hour.

    Ms. Morman. Yes, sir.

    The Chair. I know that you do it--that is the best that you 
can do. You are struggling to stay in existence. I mean, just 
in general, and I applaud you for maintaining your facility, 
providing childcare, but would you agree that we have to, as a 
Nation, do better than pay people less than what they make in 
McDonald's or almost any other profession out there?

    Ms. Morman. Yes, sir, I would. As I mentioned in my 
testimony, I am enrolled in a Virginia childcare subsidy 
program, but I have vacant slots that I cannot fill because I 
need to hire additional--an additional staff person.

    I recently interviewed, as I stated, the young lady and I 
shared the pay, and she declined. So, hiring an additional 
person would have given us the ability to care for more 
children and be more flexible with the hours.

    Currently, as it stands, if either of us, me and my other 
staff person, if we are sick or have a family emergency, then I 
must either close my facility for that time period or reimburse 
parents for the day if they are unable to find alternate care 
for the day that was not a scheduled day in advance.

    The Chair. Thank you. Let me get back to Madam Secretary 
here. What have you been able to do to raise pay in New Mexico 
and attract more qualified workforce?

    Ms. Groginsky. Thank you, Chairman. We--what we have been 
able to do is we raised everybody's wages $3 an hour who worked 
in childcare. Providers opted in if they wanted to do that. We 
have also set our childcare reimbursement rates at the true 
cost of care using the cost estimation model.

    Providers are able to attract and pay people now $16 an 
hour, $17 an hour, and we are valuing and respecting again, 
families and educators. And families have more choice. Families 
now have more choice, both because they have--we have family 
childcare, we have faith based, we have language immersion 
programs.

    The Chair. The idea of one size fits all is not what you 
are doing in New Mexico?

    Ms. Groginsky. No. And they are all private businesses, 
nonprofit, for profit, faith based. There is lots of options 
for families, and it is important that we invest in all of 
those options.

    The Chair. Ms. Hogan, if in Vermont it costs $15,000 a 
year, what impact does that have on the financial well-being of 
families? Can families support, in many cases middle-class, 
working-class families, afford childcare?

    Ms. Hogan. Vermont is actually doing really great work to 
address comprehensively early childhood education. But the 
reality is that families can't--and as we know, families cannot 
afford it. The problem is that we ask--policymakers ask parents 
to cover this cost of care out of their own pockets.

    We ask educators to subsidize the cost through their own 
low wages. And that's--because of the way the market is 
structured, it doesn't work because the benefits go so far 
beyond its individual----

    The Chair. All right. Let me interrupt you and just ask you 
my last question here. Why is childcare so expensive?

    Ms. Hogan. It is a great question, because it is something 
that every parent with kids in or looking for childcare asks, 
and the reality is that it does require a little bit of an 
understanding about the market.

    It is a labor-intensive market, and it should be. Like this 
is about drive and safety, and consistency and quality/ 
programs regularly spend up to 85 percent of costs in personnel 
to have these in place. But it is important to remember, I 
think, that the goal----

    The Chair. In other words, you don't have one worker for 30 
or 40 kids.

    Ms. Hogan. No, and you have to have those in place in order 
for safety and for driving quality, and we can talk more about 
some of those pieces.

    The Chair. Okay, Senator Cassidy.

    Senator Cassidy. I shall defer to Senator Tuberville.

    Senator Tuberville. Thank you. Thank you, Senator Cassidy. 
Thanks to the witnesses for being here. You know, childcare is 
important. You know, it is a personal decision for working 
families. Been there, done that. Most of us have. And it is 
expensive, but we have got real problems.

    By the way, the Federal Government funds our childcare 
program. Now, it is pretty interesting to me we are doing this 
right now when we are having problems with our debt. But that 
being said, we must remember that childcare is run by the 
states, not the Federal Government, and that is where it should 
be.

    But if my colleagues here get their way, childcare 
facilities would only be eligible for all this new money, only 
if they play by Federal rules. Do we want that? We got to 
really think about that. That means that the Federal Government 
will control the curriculum, required childcare workers to have 
a 4-year degree, price out the middle class.

    Ms. Lukas, would imposing a 4-year degree requirement on 
childcare employees--what would it do to the labor market?

    Ms. Lukas. Well, I think we have seen that in Washington, 
DC, where they have moved in the direction of making these 
requirements, and it would obviously make it much more 
expensive.

    As a parent, I think it is a misguided because as we all 
know, when you are looking for care for especially your 
youngest kids, what you are really focused on is having 
somebody who is loving, caring, patient, and having a 4-year 
degree is certainly not a necessary requirement in that and 
does needlessly push up costs.

    Senator Tuberville. Thank you. What would it do to our 
religious providers and our private providers?

    Ms. Lukas. I do think that is something we should be 
concerned about. I think it is great when you have state-based 
programs that are basically providing families with vouchers so 
they can make those choices. But more than half of our--my 
understanding is a little more than half of all daycare slots 
are faith based and we need to make sure of that.

    I worry when it was looked at the proposals for Build Back 
Better and the childcare provisions in there, that it could--
that there was a threat, that there could be things that would 
be inconsistent with faith-based care, and I think that is 
something we should all make sure is absolutely protected 
because that is really important.

    The environment, parents want to be able to have an 
environment that they think is supportive of their children.

    Senator Tuberville. Ms. Larin, do you have anything to add 
to that about faith based? Not really?

    [Laughter.]

    Senator Tuberville. All right. So essentially we would be 
putting our children in public schools from 3 years old and up. 
Is that what we are talking about here?

    Ms. Lukas. I worry about that. I do think that sometimes 
the model, if we focus on a model like expanding K-through-12 
education, that could be really problematic.

    I do think COVID showed us some of the problems. And it 
wasn't just--we have had a lot of conversations about 
curriculum policies, but also things like just staying open or 
masking policies. I think it is worth noting--people haven't 
talked much about Head Start.

    I mean, that is the Federal Government spends more than $10 
billion, that is about $10,000 a year, but Head Start has a lot 
of problems. It is got the waste, fraud, and abuse problems. It 
is very expensive per hour. It provides less hours per care 
than most other providers.

    Then your Head Start kids were among those who are forced 
to wear masks longer than just about anybody else, long after 
we would realize that adults have been able to take their masks 
off, when we were learning that masks were not just not doing 
any good for kids in schools, but they were actually harming 
them.

    I worry about kind of some of these providers or these 
institutions becoming political footballs.

    Senator Tuberville. Ms. Larin, what would spending this 
kind of money due to our financial system? That is a little bit 
easier question.

    [Laughter.]

    Ms. Larin. I am sorry, could you repeat the question?

    Senator Tuberville. What would spending this type--kind of 
money, all this money, what would it do to our financial 
system?

    Ms. Larin. Yes. I can't answer the question about the 
financial system, I am sorry. But what I can say is that 
historically, we have invested about $8 to $10 billion a year 
in childcare. And the $52.5 billion that was appropriated 
during the pandemic was really unprecedented. And that is part 
of the reason that states face challenges in spending that 
money.

    Senator Tuberville. Thank you. Thank you, Mr. Chairman.

    The Chair. Thank you.

    Senator Casey.

    Senator Casey. Thank you, Mr. Chairman. Thanks for this 
hearing. I wanted to start with Elizabeth Groginsky and ask 
about the--your experience in New Mexico. And as a kind of a 
predicate for the question, I represent a state that has 67 
counties in Pennsylvania, but 48 or rural counties.

    These childcare challenges that we have heard so much about 
today and have heard for a long time, were persistent 
throughout every county in the state, no matter what the 
population base of the county.

    The childcare stabilization grants, which came through the 
American Rescue Plan, were used by every type of childcare 
provider, and our state received little less than $729 million. 
That represents more than 6,800 childcare programs that 
affected 365,500 children in our state.

    A huge impact that one initiative provided through the 
American Rescue Plan. And we know that the shortage that we 
have talked about is particularly severe for children with 
disabilities and in families that live in those rural areas.

    How have these stabilization grants been used to support 
childcare providers in rural areas? That is the first part of 
the question. The second is, what is at stake for these 
communities when the funding ends in September?

    Ms. Groginsky. Thank you. Senator Casey. We were able to 
distribute almost, as I said, $168 million. Much of New Mexico 
is also very rural. And in addition to the stabilization 
grants, it--as I said, it not only stabilized but strengthened 
so many of the family childcare center based programs all over 
the state, and we have been able to use the administrative 
dollars from stabilization to build supply.

    A small village of Des Moines, we are working with the 
Mayor and people in his community to build childcare. So, it is 
absolutely critical that we not only continue to make 
investments in childcare, but we look at ways to build the 
brick and mortar, the capacity in rural communities and all 
across our states to make more--child care more available, and 
again, to this issue of parent choice, that is what is going to 
make it thrive. These are all voluntary programs.

    Families are coming to us saying, help us, and we are 
saying family childcare center based care, in-home care, 
grandparents. We can help people build their own childcare 
businesses. So, it has been a big help and we need to continue 
those investments.

    Senator Casey. Well, thanks. I am just astounded at the 
fundamental nature of these investments for these centers in 
our state. We are told that just in Pennsylvania, the--just for 
childcare centers, they are receiving a little more than 
$142,000 per center.

    Here is what they are using it for, personnel costs, so 
fundamental in the pandemic and throughout the last couple of 
years. Using the dollars for rent and mortgage, and that 
sometimes applied more to the family care centers, of which we 
have thousands in our state. So, it is critically important 
that we have a response.

    We can't just throw up our hands and say, well, the funding 
is over, and you are--Washington has no response to that at 
all. We have got to have a response. In the remaining time I 
have, Ms. Hogan, I was going to ask you about legislation. I 
may be preempting Senator Murray because she is the lead on 
this bill, but the Child Care for Working Families Act.

    I have been blessed to have the opportunity to be a co-lead 
on that legislation led by Senator Murray. I wanted to ask you, 
how would that legislation provide a comprehensive solution to 
childcare needs, including by lowering costs for families, 
increasing access to care, and addressing early educator 
workforce shortages?

    Ms. Hogan. Senator Casey, thank you so much for the 
question, because it really is this responsive, comprehensive 
strategy. And there is just a couple of things I would raise, 
because it addresses the entire system, and it does sort of 
really center this Federal state partnership. I think that is 
one of the things that we talk about when we talk about the 
importance of centering good things that happen at states.

    We know from early funding, it recognizes and pays for the 
true cost of care, which we have talked about as being 
incredibly important to balancing all these pieces, caps costs 
for working families, and ensures the lowest family has free 
childcare and pre-K, and Head Start. And it provides grants, 
which again, as we know, they work to improve quality and 
supply.

    Senator Casey. Well, thanks very much. It is okay to repeat 
that if Senator Murray asks you about it.

    [Laughter.]

    The Chair. Senator Cassidy.

    Senator Cassidy. I defer to Senator Markwayne Mullin.

    Senator Mullin. Thank you, Senator. And thank you for our 
panelists for being here. I am going to address a question real 
quick about why is it so expensive. 14 years ago, my wife and I 
wanted to provide health care for our employees. It was 
actually going to be a benefit because we were having a lot of 
employees miss work because they couldn't find child and health 
care.

    We just went through the process of trying to set it up, 
and it was crazy how expensive it was. Then outside of that, 
the liability that it brought to our company honestly 
outweighed the benefit of it.

    Because of how much regulations that we pour on these early 
child development centers, preschool, it makes it almost cost 
prohibitive. And so, if we really want to fix cost, we should 
start looking at ourselves and seeking out a way that we can 
soften the amount of regulations and still keep our kids safe.

    Now, let me get to the point of my questions and kind of 
make a point here. We are trying to Federalize our education 
system. To me, it sounds like we are trying to move more toward 
socialism, because when you Federalize an education system, you 
are standardizing what you are going to be teaching our kids 
and taking the parents out of the ability to have a say in it.

    I have very--I have a lot of concerns about this. And it 
still baffles me that the Chairman of our Committee, Health, 
Education--I am going to put right put that big, Health, 
Education, Labor, and Pensions Committee is--that was appointed 
by Senate Democrats is a self-proclaimed socialist. I am not 
just calling that. Chairman, you openly say that you are a 
socialist. It is in your book, Outsider in the House, the 
Chairman says Bill Clinton is a moderate Democrat. I am a 
Democrat socialist.

    That is over our education system. I have a book here in 
front of me called, Our Skin, that has been endorsed by NAEYC, 
and I am going to read exactly what this book says. You guys 
might find it interesting. ``A long time ago, way before you 
were born, a group of white people made up an idea called race.

    They sorted people by skin color and said that white people 
were better, smarter, prettier, and they deserved more than 
everybody else.'' This would be taught--if we socialized, our 
pre-K system, this would be, taught----

    The Chair. Do you disagree with the findings in the book?

    Senator Mullin. 1,000 percent. How about we teach Jesus 
loves me? How about this, if teaching Jesus loves the little 
children, the lyrics, go red and yellow, black and white, they 
are all precious in our sight.''

    Now, which one would you think would be better? I will ask 
everybody on the panel. Which is better to teach, this, that is 
a story that was made up to teach our kids, 3 year olds who 
have no idea what race is, now all of a sudden is being taught 
that white people said this as a truth--someone point at me 
that this being a truth, that white people developed race, that 
white people developed that--that all of a sudden that was our 
word that we developed.

    By the way, I am Cherokee--Native American. I think we have 
experienced a little bit of racism before in my life, 
Chairman----

    Ms. Groginsky. Senator Mullin----

    Senator Mullin. I ask everybody on the panel, which one is 
better to teach, this or that Jesus Loves Me lyrics. Ma'am, I 
will start down here. Just, which one--I don't have time for--
--

    Ms. Groginsky. Yes--what I will tell you, Senator Mullin, 
is that what children in these early years develop their 
identity----

    Senator Mullin. No, no, no, I didn't ask any question--the 
question is, which one you think is----

    Ms. Groginsky. It is important that our classrooms are----

    Senator Mullin. I am just asking which one is better?

    The Chair. Let her answer the question completely.

    Senator Mullin. My question is this----

    The Chair. She will answer if she sees fit----

    Senator Mullin. Which one is better, this?

    Ms. Groginsky. It is important that children's identity----

    Senator Mullin. That is not answering my question.

    Ms. Groginsky [continuing]. are recognized----

    Senator Mullin. That is not answering my question.

    Ms. Groginsky. That is what creates strong, executive 
function----

    Senator Mullin. Okay. Ma'am, if you don't want to answer my 
question, that is fine. Let's move on down the panel. Which one 
is better to be taught, this book or the Jesus Loves Me lyrics 
that says everybody's--that everybody's skin doesn't matter, 
they are all precious in His sight.

    Ms. Hogan. I think it is important to teach that all 
children are seen and valued for who they are, and that is 
when----

    Senator Mullin. But when you teach this, don't you think 
that other people are starting to say that white kids are to 
blame?

    Ms. Hogan. I think it is important----

    Senator Mullin. It is exactly what they are going to teach. 
It is exactly what it is. Ma'am. Ms. Morman. I disagree. First, 
it is important that we teach Jesus, and Jesus is what we 
teach, but the reality is----

    Senator Mullin. Which one is better--do you think this is--
--

    The Chair. Could she answer the question, please.

    Senator Mullin. I don't want reality. I am asking the 
question which one is better?

    [Laughter.]

    Senator Mullin. That is exactly--that is exactly what it 
is.

    Voice. Add it on tape.

    Senator Mullin. Misspoke. What I am saying is, is which one 
is which, which? Which one is better to be taught, Mr. 
Chairman? Is it this or is it--or is it the Jesus--

    The Chair. Is your question directed to me on this moment?

    Senator Mullin. Well, you keep interrupting me saying 
that--they are not asking the question.

    The Chair. Want to ask them the question?

    Senator Mullin. I really----

    Senator Cassidy. No, no. It is his question. He gets to 
dictate it.

    Senator Mullin. Which----

    The Chair. Not dictate it, ask the question.

    Senator Mullin. Which one?

    The Chair. Talking to Ms. Morman, right?

    Senator Mullin. Yes.

    Ms. Morman. As I stated, Jesus is always first.

    Senator Mullin. Absolutely. I agree with that. Let me end 
with this, because I still have more time because the Chairman 
kept interrupting me. I am going to close with two quotes. 
Okay. The first is from John Adams says, morality and virtue 
are the foundation of a republic and necessary for society to 
be free.

    The second one is from our socialist communist Joseph 
Stalin, that says education is a weapon whose effect depends on 
who hands it is in and whom it is aimed. We got to be careful 
what we are trying to do here. With that, I yield back.

    The Chair. Senator Baldwin.

    Senator Baldwin. Thank you, Mr. Chairman. Thank you to all 
of our witnesses for appearing today. From the high cost of 
care to persistent and widespread shortages of care, the lack 
of access to affordable childcare is straining the finances of 
families in every corner of my state. But I also hear from 
Wisconsin business owners who report that access to childcare 
remains a primary barrier to hiring and retaining the employees 
that they need.

    I think Wisconsin has done well at using Federal 
investments to connect businesses with childcare needed for 
their workers, and I am glad to have the opportunity to share a 
little bit of that story at today's hearing. However, I am 
concerned about the ability of families and businesses in 
Wisconsin to continue to utilize these types of partnerships 
when the available funding runs out.

    I am also really concerned about our ability to provide 
meaningful investment to address that childcare crisis under 
the constraints of the debt limit deal that is being debated 
right now in the House and will ultimately come to the Senate. 
Ms. Hogan, Wisconsin used Federal dollars from our COVID-19 
response to create an innovative program that helps businesses 
purchase childcare slots for the benefit of their employees.

    This program, called the Partner Up Program, has also 
pioneered an innovative true cost of care model, which I know 
has been referred to already, that allows participating 
childcare providers to be paid what it actually costs to 
provide care to children, making it an attractive program for 
businesses and childcare programs alike.

    But I am concerned, as I said, when the Federal dollars run 
out, that innovative programs like this, both in Wisconsin and 
nationwide, will end. So, tell me, are we at risk right now of 
losing the momentum of addressing the childcare crisis if we 
fail to make up for the shortfall? What do you see?

    Ms. Hogan. I would say the short answer is yes, though we 
trust the parents and businesses who really need this 
investment will continue to push for the investments that are 
needed. But it is unfortunate that the funding is ending 
because it is--what you describe is such a great example of how 
a Federal, state, business, parent partnership can really work. 
And there are other examples, your neighbor in Michigan.

    There are great examples of these pieces coming together to 
really meet the needs. And it really proves the point of what 
happens when the Federal Government makes these investments and 
states can respond to those needs in ways that are responsive 
to what is happening on the ground.

    Senator Baldwin. Great. I have a question for you, Ms. 
Morman. As you well know, family childcare providers provide 
indispensable services to families across the country, and I am 
concerned about the fact that my state, Wisconsin, lost nearly 
25 percent of its family childcare providers in recent years.

    That is a dramatic drop. I have heard from Wisconsinites 
about the initial cost to become licensed, that it can be very 
daunting for would be family care providers. And at the same 
time, I know that families and childcare providers share a 
strong interest that these homes meet rigorous care and safety 
standards. Startup grants, like those that were included in the 
Child Care for Working Families Act, really helped family 
childcare providers meet licensing standards and offset these 
initial costs without sacrificing safety or quality.

    In your role as the head of an association of in-home 
family childcares, I ask you to talk about the importance of 
these startup grants. I am trying to think of an example that 
everyone could relate to.

    Say, you want to get in the business, but you don't have a 
fence around your backyard and the children are going to be 
playing out there. That cost of just putting in the fence, 
which you need for safety, might be daunting in terms of 
overcoming that and making something work.

    Tell me a little bit about startup grants, in addition, of 
course, to reasonable reimbursement rates, to help recruit and 
retain more family childcare providers.

    Ms. Morman. Yes, ma'am. More children spend time in home 
based childcare settings than any other childcare setting. 
Family childcare educators disproportionately care for infants 
and toddlers and children from low-income families, families of 
color, as well as families living in rural communities.

    Therefore, it is critical to ensure home based childcare 
providers have access to higher reimbursement rates and 
resources to startup their childcare programs to meet health, 
safety, and quality standards. When I started my program, I had 
to make modifications to my home and purchase furniture and 
materials for the childcare program. I used my savings, since I 
didn't have income from childcare yet.

    Steps to reduce barriers to licensing include providing 
startup grants and providing technical assistance from trusted 
advisers and coaches on topics like stages of child 
development, implementing a curriculum, and running a childcare 
business. Family childcare providers also faced housing 
insecurity at an alarming rate.

    According to a standard rapid survey, over one-quarter of 
home-based providers were worried about being evicted from 
their homes.

    The Chair. Ms. Morman, time has expired. Thank you very.

    Senator Baldwin. Yes. Thank you.

    The Chair. Senator Cassidy.

    Senator Cassidy. I defer to Senator Murkowski.

    Senator Murkowski. Thank you, Mr. Chairman. Thank you, 
Ranking Member. I am glad we are talking about childcare here 
this morning. I don't view childcare as a threat to me as a 
parent, about whether or not we are losing our values. As a 
parent, I want to know what is going on in my childcare 
facility. I want to know what is going on in my kid's school. I 
think that is incumbent upon me as that parent then to actively 
engage in that. But I want to have some choices. I want to have 
some options.

    In my state right now, 61 percent, 61 percent of Alaskans 
live in what they call a childcare desert. They have nothing. 
So, when we are looking for workers from everything from slope 
workers to teachers to doctors, I am having--I am having 
workforce issues in other spaces because we don't have access 
to childcare.

    The community of Valdez, the terminus of the Alaska 
pipeline, got a great little hospital there. They are trying to 
get some providers. They got some nurses that are lined up to 
come and they find out that the only licensed childcare 
facility in all of Valdez has closed down and there is no plan 
for it.

    The Coast Guard says, if we don't have childcare there in 
Valdez, we are not so sure about the viability of Valdez as a 
Coast Guard community. Childcare is not only a workforce issue, 
it is a military readiness issue. I had a sit down with the 
head of our childcare coalitions and I brought in the base 
commander from Joint Base Elmendorf Richardson, because he is 
telling me that the No. 1 challenge he has got right now when 
it comes to readiness is the availability of childcare.

    We talked about, is it what childcare providers are being 
paid? And we found out that in the military, at least on JBER, 
they have got flexibility to pay their childcare providers more 
and they still can't get the people that they needed. I asked a 
simple question, what more can we do? If it is not the pay, 
what is it?

    I was told, until you--until you allow child care providers 
to think that this is a career and not just a job where I am 
going to go get minimum wage and then hopefully I am going to 
get something better from there--our reality is child care is 
an imperative in so many of our communities, our states, and we 
have got to do more to address it.

    This weekend in our state's largest newspaper article about 
childcare in Alaska, 250 people on the wait list in a facility 
in Palmer at the childcare facility just up the road from where 
I used to live there in Anchorage. What children--what families 
are being charged for one kid, $1,700, you tell me how a family 
who is a teacher and a firefighter, is finding $1,700 dollars 
for their one kid.

    It is not only childcare deserts, it is the issue of 
affordability. I am told that on average in Alaska, families 
pay $982 per month for childcare. But again, that varies. I am 
looking at this and I am saying, there is a role here. There is 
a role for us. Last Congress, Senator Tim Scott introduced the 
Child Care and Development Block Grant Reauthorization.

    I co-sponsored that because I thought it was a good way to 
actually help assist childcare providers and families in their 
ability to be able to choose childcare without us here in the 
Federal Government micromanaging things. Senator Murray has a 
different approach to it, but I am looking at this and 
suggesting that we have a role here.

    We have a role. I perhaps might not have ever envisioned 
that at the Federal level it was incumbent upon us to weigh in 
here when it comes to childcare and access to childcare, but it 
is impacting our military security. It is impacting our 
economic security when you cannot get people to be able to 
return to work because there is no childcare for them.

    If anybody wants to comment on Senator Scott's 
reauthorization of the childcare development block grant, I am 
happy to hear that because I have taken my full 5 minutes, 
apparently. Go ahead, somebody. Ms. Hogan, you are picked on.

    Ms. Hogan. Well, what I really--I just, there so much--it 
is wonderful to hear you talk about the role, and I just want 
to appreciate the opportunities to have bipartisan agreement to 
build on what we have already done to ensure that there is 
childcare and early learning access. I especially want to lift 
up what you talked about in terms of this really not being a 
minimum wage job.

    The compensation needs to be commensurate with their 
incredible skills and value that goes into this. This is a 
difficult job. And the Senator from Oklahoma I know isn't here, 
but this question of regulations, when we make a--when we make 
it harder for an early childhood educator to do their job, when 
we reduce ratios and we reduce group sizes, one of the things 
that we need to talk about when we do that is we make it harder 
to recruit and retain early childhood educators.

    We actually reduce the supply when what we are trying to do 
is increase it. And that comes back to this question of the 
ways in which compensation really matters most. If we don't fix 
that, we are going to keep struggling with this challenge.

    The Chair. Thank you very much.

    Senator Kaine.

    Senator Kaine. Thank you, Mr. Chair, and thanks to the 
witnesses. I think there is a consensus, not in unity, but a 
consensus that we have got to do something about this and a lot 
of debate about what is the right way to do it. You know, the 
reality in Virginia--so I am a parent of three kids. One is an 
early childhood educator in a private pre-K program, long 
standing private pre-K program in Minneapolis.

    I travel all around the state, talk to people at military 
bases, and rural Floyd County, and metropolitan Richmond, 
Hampton Roads, and whether I am in a rural part of Virginia or 
in a really metropolitan part of Virginia, I hear the same 
story over and over again, that we can't pay our folks what 
they are worth. If we did pay them what they were worth, a 
whole lot of our parents couldn't afford it.

    Then from parents, I can't find affordable childcare and I 
would like to be in the workforce, but I am not because of the 
inability to find high quality, affordable childcare. At the 
same time as our unemployment rate is near the lowest it has 
been in 60 years and every employer in the state is telling me 
we can't hire people. We have got a massive reserve army of 
super talented people who would like to be in the workforce, 
and they say they are not for one reason, they can't find high 
quality, affordable childcare.

    Now Ms. Morman, my kids in Richmond did early childhood 
experience, some home based family childcare, some the Virginia 
Preschool Initiative. Two programs in church basements that 
were church run programs, and I support all of it, and I 
supported all of it when I was Governor.

    I guess you wouldn't be here today with us if you thought 
what we were trying to do was dictate a one size fits all 
style, one like Government run program, correct? You wouldn't 
come and testify to a Committee if that was what was up? In 
fact, you were talking about the value of the funding that you 
receive during COVID. The first set of funding was part of the 
CARES Act, which was bipartisan, Democrats and Republicans 
together said we would better help out childcare providers 
during this tough time.

    Then we did more in the American Rescue Plan, and that was 
just Democratic votes, only Democratic votes. But in the 
American Rescue plan, we didn't childcare--we didn't exclude 
family based care. We didn't exclude family based care run by 
faith filled people. We said, we need you.

    We want to support you. And the proposal that Senator 
Murray and I have is to do that. It is not to do a one size 
fits all. It is to have a program that would support high 
quality, but high quality delivered in a million different 
ways, including programs just like yours.

    You were candid, and I want to dig in a little more because 
I thought you were candid on the salary issue. You are paying 
$12 bucks. The state says you can get some additional 
resources, training if you can go to $17. But if you went to 
$17, how would that affect the parents who are coming to you?

    Ms. Morman. If I went to $17, I would have to increase my 
rates.

    Senator Kaine. A number of your parents, families couldn't 
afford it, right?

    Ms. Morman. I would lose them.

    Senator Kaine. Right. So, this is the gap I am hearing 
everywhere. My families struggle to afford this. My providers 
are worth a lot more than I paid them. But if I paid them that, 
then these families would be in a jam, and you wouldn't be able 
to provide services to them. And that is the gap that I think 
we have to find an answer for.

    I appreciate you are kind of just stating it so clearly in 
terms of how it affects you, because I hear this all over the 
place. I want to thank you too, as I am just continuing, this 
work that you did during COVID to call all of these childcare 
providers in the family settings to say if you were running a 
daycare center that had 50, 60, 70 kids, you might be more 
aware of these resources out there.

    But like the place where my son Nat went, first in life, 
there are four kids there. Marie Williams, I doubt, would have 
known about Federal funding available to help her over this 
tough time. What did you learn as you were reaching out to 
these 400 providers during this tough time that you might want 
to share with us?

    Ms. Morman. The money was crucial. It helped them to 
continue to be able to operate and serve the children that they 
had in care. Without those phone calls, providers would have 
lost out because it was a deadline. There were no extensions. 
You had to act, and you had to act then. And many providers 
were not aware because they were working. They didn't have time 
to check emails or to see what was going on. They were working, 
caring for the children that were in care.

    Senator Kaine. Just to put an exclamation point on the 
value of the work that you did, this was also during a time 
where because early phases of COVID, you don't exactly know--
you were having to grapple with social distancing issues that 
you might not have thought about. Three-year-olds aren't the 
greatest social distancers in the world or so I have noticed.

    Second, you probably had a whole lot of parents who were 
facing issues at their jobs, and even as they were struggling 
to pay what you would charge them, now if their jobs are in 
jeopardy or businesses are closed down and things like that, 
they had even more needs.

    But you were able to not easily kind of stretch because of 
this Federal assistance, stretch the fabric over the holes in 
the garment to kind of keep plugging along. That is what our 
assistance enabled you to do, correct?

    Ms. Morman. Definitely. Without it--and some providers did 
not make it because they weren't able to continue. Financially, 
they just couldn't afford to continue to run their business.

    Senator Kaine. Well, thanks for being a resource for 
others. I yield back to the Chair.

    The Chair. Thank you.

    Senator Cassidy.

    Senator Cassidy. I defer to Senator Marshall.

    Senator Marshall. Right. Thank you, Senator Cassidy and 
Chairman. Certainly, agree with everybody here that childcare 
is a significant problem. It is nothing new in rural America. 
It has now flooded over to urban America. I think I have shared 
before this Committee, the toughest part of my marriage, I 
remember, is working 36-hour shifts as a resident.

    My wife, the nurse, working 12-hour shifts with two 
preschool kids. Running a hospital, running a medical practice, 
childcare was always a major issue, of course, for nurses. We 
have had, gosh, the big roundtable at Kansas State University 
three or 4 years ago trying to bring in the best minds and what 
we could do or not do.

    Beyond that, I think I did a dozen roundtables this last 
week, and at every one of those roundtables, urban and rural 
America, this issue was brought up. I think what is interesting 
is each community has their own way to solve it, and it is so 
hard for me to sit here and say, this is one size that is going 
to work for everybody.

    Even just hearing everybody's ideas up here, it is next to 
impossible to figure out what would work best. Probably the 
best solution I have seen is Salina, Kansas took their YMCA and 
did a co-op there.

    They had an underutilized resource during the day, and 
different businesses--we are going to pay for a share, like 
five spots, seven spots, ten spots, whether they use them or 
not, so when you are running this co-op, you would at least 
have a fixed income.

    That was a very unique idea. I want to talk about the 45U 
tax credit, though. I hope that some of you are familiar with 
this, but I think it is an opportunity for small businesses, 
but it is very tight what you can use it for or not use it for. 
But by expanding the 45F tax credit, I think gives more 
flexibility to those people, those small businesses. Ms. Lukas, 
are you familiar with 45F at all?

    Ms. Lukas. Not really, I am sorry to say.

    Senator Marshall. Ms. Larin, re you familiar with it?

    Ms. Larin. Yes. GAO looked at use of the childcare tax 
credit by employers a few years ago and we found the take up 
rate was very low, and there are a number of reasons for that 
low usage. I think for one thing, it is--employers don't--
aren't really aware of the tax credit, and it remains very 
expensive to provide childcare to employees, but it is an 
option that is available to employers that is underutilized at 
this time.

    Senator Marshall. Right. What would you do to expand it to 
make it more user friendly? Any thoughts?

    Ms. Larin. We didn't make any recommendations around that. 
When we did the work, we were really looking at the use of the 
credit and challenges to using it.

    Senator Marshall. Right. Anybody else on the panel familiar 
with 45F? Okay. All right. Thank you. I yield back.

    The Chair. Thank you.

    Senator Smith.

    Senator Smith. Thank you very much, Chair Sanders. And 
thanks to all of you for being here today. I have been 
listening to this conversation, and I am really struck as I 
think about what this sounds like at home in Minnesota, because 
at home in Minnesota, I can tell you that childcare, access and 
affordability is a huge issue. And it is not just an issue in 
the blue parts of the state. It is an issue everywhere.

    In fact, I think most Minnesotans don't really see this as 
a political issue at all. You know, in small towns and rural 
places, I hear from farmers and small businesspeople and mayors 
and parents that childcare is just not working for them. And 
that is what we have all been talking about.

    I think this--as Senator Kaine said, there is understanding 
of that issue. I think the question is, what do we do about it? 
I want to just like focus in first on what we have done about 
it, because I want to dispel any myths that might exist about 
whether or not in the work that Congress did, Congress took 
action to shore up the childcare system because it was 
collapsing.

    If we hadn't done that, my understanding from talking to 
people in Minnesota is that this teetering on the edge of a 
cliff childcare system would be off the cliff and there would--
we would be even a much different situation.

    That is what I am hearing at home. Just to give you an 
example, 96 percent of childcare providers in Minnesota said 
that receiving the grant was helpful in keeping their program 
open and operating. 81 percent of people said that was a very 
helpful. Majority said that it helped them to retain staff.

    It made a difference. It made a real difference. 8,000 
childcare providers were able to keep their businesses afloat. 
I can tell you, I think this is probably pretty similar around 
the country. In rural parts of the state, that is more often 
than not, family childcare providers who are most at risk of 
having to close up because of the situation.

    Let me just go first to you, Ms. Groginsky, talking about 
what you have seen in New Mexico. Your home state has been very 
effective in utilizing the childcare stabilization grants. And 
could you just talk a bit more about how you--like sort of, how 
you were able to use those dollars to shore up the systemic 
position, New Mexico providers and families, for a better 
system?

    Ms. Groginsky. Thank you, Senator Smith. We put together a 
formula that made sure that we based it on licensed capacity, 
but we also wanted to incentivize infant toddler care and 
higher quality care and give more to centers and family 
childcare homes located in what we call high vulnerability 
index communities.

    We acted quickly with that. We, similarly, as a state, we 
called every provider to make sure they knew about the 
opportunity, and we thought that was very important, especially 
in our rural communities.

    Broadband access is very limited, so we know that phone 
calls, text messages were going to be critical. I feel good 
that we reached almost all of our providers. We directly talked 
to them, and they knew that the money was available.

    Senator Smith. You said also in your testimony that 
flexibility was so important because if you agree, as I do, 
that one size does not fit all, that means that individual 
providers are going to have different needs.

    Some--a small family provider in the midst of that pandemic 
needed to make some physical improvements to their space so 
that they were able to stay open, right. And the ability for 
individuals to be able to make their own decisions without the 
Federal Government saying, you must do this----

    Ms. Groginsky. That is exactly right. They were able to 
make choices about how they spent it with a list. Most people 
did invest in salaries, but they did things like improve their 
outdoor learning environments. They made things more safe and 
healthy. They put filters in their houses or in their childcare 
centers. So overall, again, they were much stronger by the end 
of the stabilization.

    Senator Smith. That continues to reap benefits, even though 
the fundamental market failure--I mean, I would say we have a 
market failure here. There is the supply and the demand, how 
much it costs and how much people are able to pay, is 
completely mismatched.

    Those are essentially the problems that we are working to 
solve, that Senator Murray and I and others, and Senator Warren 
and I have been working to try to resolve. Not by saying you 
must have a childcare system that is exactly this way, but by 
actually putting power in the hands of parents to make 
decisions about what that looks like.

    Miss--I am about to run out of time, so I am going to 
switch gears because I want to ask Ms. Morman something that I 
think is really important for the Committee to have on our 
minds. This actually isn't part of the jurisdiction of this 
Committee, Senator Sanders, but it is really important.

    During the pandemic, the Department of Agriculture issued a 
waiver that allowed us to extend flexibility to provide through 
the Child and Adult Care Food Program, so home-based providers 
could be reimbursed for the food that they provided in their 
systems. Ms. Morman, could you just--I know you are a home-
based provider.

    Could you talk briefly--and that program is going to expire 
if we don't take action. Could you talk just briefly about what 
your experiences were with that program and whether you think 
that there are things we should keep in mind as we look at 
whether it can be extended?

    Ms. Morman. Yes, ma'am. I participated in the childcare--
Child and Adult Care Food Program, which is an important 
program and source of funding for childcare community. However, 
major reforms are needed. Depending on where family childcare 
educators live or their own income, we are assigned to a tier.

    Tier one or tier two. In tier two, the already modest 
partial reimbursement rate is about half of the rate for tier 
one. Tearing only applies to family childcare. It does not 
apply to centers or Head Start programs.

    In the 20 years since tiering was introduced, the number of 
family childcare homes participating in the CACFP has decreased 
by 46 percent. Thanks to Congressional leadership when the 
pandemic struck, the USDA had the flexibility to temporarily 
move all family childcare programs to a tier one. We also 
received an additional $0.10 per meal or SNAP reimbursement.

    This was a lifeline as meals and childcare programs are 
vital sources of nutrition for children, children in my program 
for 10 to 14 hours per day, and I serve two meals and one 
snack, and a dinner for children who stay longer.

    I share your concern about the end of the waiver, which 
expires June 30th. The cost of food has increased 
significantly. The CACFP reimbursement only partially covers 
the cost of food, leaving us to regularly pay out of pocket to 
feed children.

    Senator Smith. Thank you, Ms. Morman. I know I have gone 
over time. I appreciated you bringing our attention to that. 
Thank you, Mr. Chair.

    The Chair. I am sorry to always have to interrupt you, but 
it is their fault.

    [Laughter.]

    Senator Smith. It was my fault. I asked a question. I knew 
was going to take more than 8 seconds.

    The Chair. Senator Cassidy.

    Senator Cassidy. First, Senator Budd.

    Senator Budd. Thank you, Senator Cassidy. Thank you, Chair. 
And again, I thank the panel, the witnesses, for being here 
today. I believe that parents should be empowered to make the 
best decisions for their family's childcare needs. And there 
really shouldn't be a one size fits all solution.

    I am concerned that proposals from my colleagues across the 
aisle, from the Democrats on this Committee, which would stifle 
parental choice by sweeping Government intervention to 
essentially take over the childcare system in our Country.

    Ms. Lukas, can you go into more detail about something that 
you and Senator Tuberville chatted about earlier? Can you go 
into more detail on why childcare should not function like a K 
through 12 school?

    Ms. Lukas. Well, there are so many reasons, but I think 
that the--that when you look at the youngest kids, we know that 
they have special needs. They need loving care. Their people 
have a variety of different preferences.

    Many parents want a home-based care and something that is a 
more loving and environment that reflects their values. As we 
move toward more toward basically just extending down our K-
through-12 public schools, I think we are going to lose a lot 
of that, and especially as we have seen with our K through 12 
public schools, all this controversy and parents? kind of 
waking up during COVID to recognizing that what was being 
taught isn't what they wanted to be taught.

    The tremendous lack of learning that is taking place in K 
through 12, rising violence in K through 12 education. I think 
there is just a lot to be concerned with. Plus, school 
closures. There is a lot of failures in COVID that I think 
brought people to question what's going on in our K through 12 
public schools.

    Senator Budd. Thank you. So how can policymakers support 
parents who would prefer to have one parent or maybe an 
extended family member stay home with the child?

    Ms. Lukas. I think as we are talking about this, there is 
so many great things that are going on at the state level, but 
I think that should give us humility. Like why does this money 
need to pass through the Federal Government rather than having 
states and their own programs?

    A lot of states are doing great work and enacting very 
interesting programs to help those who need childcare, but 
without make it harder for people to keep a parent at home.

    I do worry, as we talk about all this money going to 
support one kind of childcare arrangement, and that is paying 
someone else to care for your child, that we are effectively 
discouraging or disincentivizing, not only stay at home 
parents, but grandparent and other kind of community-based 
relationships.

    I think we should be supporting parents through tax 
credits, through tax deductions, lower tax rates, direct 
subsidies, but not making it conditional on paying somebody 
else to care for your kids.

    Senator Budd. Thank you very much. I yield back.

    The Chair. Senator Hassan.

    Senator Hassan. Well, thank you, Mr. Chairman and Ranking 
Member Cassidy for this hearing. Thanks to our witnesses for 
being here today. This is obviously a critical issue for all of 
us, for our constituents, for our families, and most 
importantly, for our kids. So, to Ms. Hogan, I wanted to start 
with a question to you.

    Unfortunately, many young children missed out on formative 
years of learning and socializing with peers due to the 
pandemic. A recent survey by the American Speech Language 
Hearing Association found that a large majority of speech 
language pathologists are reporting more young children who 
have delayed language or diagnosed language disorders and 
behavioral difficulties.

    Some of those students may require professional early 
intervention services, but parents and early childhood 
educators have an important role to play here as well. So, Ms. 
Hogan, what steps can we take to ensure that childcare staff 
receive the training necessary to support the healthy 
development of young children and their learning recovery?

    Ms. Hogan. Thank you so much for the question. And it is 
true, we also are hearing that from early childhood educators 
every day, that they are seeing a lot of challenges that kids 
are bringing to bear and making sure, again, we have talked 
about how difficult it is for families to access childcare.

    This is particularly true for families who have children 
with disabilities and families who need nontraditional hours. 
So really making sure that educators--it speaks to this 
question of the complexity in early learning and making sure 
that early childhood educators have access to gaining those 
skills and competencies they need.

    We have seen, again, states really go out of their way to 
make those investments in apprenticeships and scholarships and 
access to training and professional development that really 
supports early childhood educators and understanding across all 
settings how to support kids and their families.

    Senator Hassan. Well, thanks. I really appreciate that, 
because it is true, when you have a child who needs either a 
different approach or more complex understanding of 
development, it is really important for early childhood 
educators to get those supports and that training. Secretary 
Groginsky, I wanted to ask you a question.

    Along with Senator Young, I have introduced the bipartisan 
After Hours Child Care Act, which would expand access to 
childcare for Americans who work nontraditional hours. That 
third shift--sometimes that second shift, right. Lack of access 
to childcare during these nontraditional hours hits families in 
rural areas especially hard.

    I know Senator Smith touched on this in a question, but 
Secretary, how are you increasing access to childcare in rural 
areas and for families with nontraditional work schedules in 
your state?

    Ms. Groginsky. [Technical problems]--Senator Hassan, the 
ways that we are doing it is really through all of these three 
mechanisms, making sure that we are paying for the true cost of 
care, expanding eligibility for families up to that 400 percent 
of poverty, and really investing in the workforce.

    We know that our childcare programs need to stay open 
longer, and especially in our rural communities. We have seen 
children die because their families did not have access to 
childcare, and they had to leave their baby or their toddler 
with somebody so they could go to work in one of those evening 
jobs.

    Investing in childcare is about improving child well-being 
overall. So, all three of the things that we are doing in New 
Mexico are making a difference.

    Senator Hassan. Well, thank you for your work. And thank 
you, Mr. Chair. That is all I have.

    The Chair. Thank you.

    Senator Cassidy.

    Senator Cassidy. Senator Braun.

    Senator Braun. Thank you, Mr. Chairman and Ranking Member. 
I like these discussions because I come from the real world 
before I got here and how you actually try to fix these things. 
I remember the gentle memories of when our kids were raised, it 
just wasn't this complicated.

    We had plenty of local providers. Some of them, I wondered 
how they made it through the day with the pandemonium that 
seemed to be part of the process. Everything needs room for 
improvement. We are talking about putting more responsibility 
possibly on the shoulders of the Federal Government.

    One of the reasons I ran is because if you are good at 
finance and you know the numbers, you kind of look a little 
into the future, and I don't see a good business plan for this 
place to take on more responsibility. I am doing this as a 
problem solver, not really doing it in a political way.

    Senator Sanders and I had discussions. I think he and I 
have been the loudest Senators on reforming health care. That 
is a broken system--that one side wants more Government. We 
consider it maybe, Okay. It is not okay when it costs that 
much. Childcare, because I visit all of our 92 counties, a lot 
has to do with workforce there. You want more people to come 
into the workforce, you are going to have to have childcare. 
And it worked years ago. It is just not working now.

    My thinking is, unless you come up with real solutions, 
they will generally get to this forum and then you are stuck 
with more top down in already kind of bloated system that 
doesn't really look warm and fuzzy in terms of the finance part 
of it, in the long term. My question is, I will start with Ms. 
Groginsky, you have done something in a state. I think that is 
probably where a lot of the solutions are going to get done 
sustainably and paid for over time.

    Do you think this should be something that we consider here 
on top of whatever we have been doing that looks like we are 
getting into financial chaos, and I don't know what we have 
been knocking it out of the park on.

    You seem to have results. Can this be done in the bailiwick 
of states as opposed to trying to find solutions here? And 
where do you think it would be best done?

    Ms. Groginsky. Thank you, Senator Braun. I think we can't, 
the states can't do it without a significant Federal 
investment. I think that is what we saw--and a Federal 
investment that had the flexibility that we need----

    Senator Braun. Right there--that, you made a point there. 
Would you be willing to borrow the money from future 
generations to do it? Because back home and businesses and 
anything else, you are finding out through the force of having 
to live within your means, the solutions that really work. 
Would you really want more here if we are borrowing the money 
to do it? Because that is what you would be saying along with 
wanting to help.

    Ms. Groginsky. Thank you, Senator Braun. Yes, absolutely. 
The benefits will pay off. The return on investment is clear. 
And in New Mexico, over 70 percent of the voters said we want 
to have a Constitutional right to early childhood education, 
overwhelmingly. I think nationwide is the same case.

    We need to make that partnership between state and Federal 
and local so that parents have the choice they need to go to 
work, invest in their children's future, and that will return 
to us in dividends that we can't even imagine.

    Senator Braun. What that will do is pile on to our $31 
trillion in debt. And we are wrestling with this right now 
between two sides that I don't think are really taking it 
seriously. One side wants it $20 trillion out there in 10 
years, more.

    That heavy load of interest, I can tell you, is not going 
to be good for what you want are for the other things, Social 
Security and Medicare, long term. But I understand your opinion 
is that there wouldn't be the wherewithal. I do disagree with 
that----

    Ms. Groginsky. Without losing, as Ms. Hogan said, $1.2--
$122 billion in lost revenue right now. So that is something 
that we need to think about when we make these choices.

    Senator Braun. But anything we are trying to make up on 
lost revenue, we are borrowing the money to do it. Ms. Larin, 
where are you at on this issue? Clearly, people come here 
because they want money for things. If we were doing it 
responsibly, like we do everywhere else, it would be there.

    But you would be making tough decisions of trading off what 
the best use of that money would be. Can states do this on 
their own? And what do you think, if they got to look here, are 
you willing to borrow the money to do it?

    Ms. Larin. Yes. I mean, I think you raise an important 
point about states making decisions and the current system, the 
CCDF program, does allow states a fair amount of flexibility in 
how they use the funds.

    That is part of the reason that we don't know how all of 
the current spending is being spent, and we won't know that for 
a few years. And it is because different states are doing 
different things with that money. I think that is important, 
having the flexibility at the state level--I am sorry, I think 
I missed the other----

    Senator Braun. Well, you I think you made your point. I 
don't want to be gaveled by the Chairman for going over my 
time, but I will put this out there. Unless all of us as 
citizens, all of us that want to solve problems, if we don't 
start doing some of that in ways that are resourceful and maybe 
from the bottom up, I do think we are going to run into issues 
of how we pay for it here over time. Food for thought. Thank 
you.

    The Chair. Thank you.

    Senator Lujan.

    Senator Lujan. Thank you, Mr. Chairman. I want to come back 
to a point that Chair Sanders brought to our attention as well, 
and that was on the inherent conflict that exists in childcare.

    One area I hope that we all agree is that the wages that 
early childhood educators make is very, very low. I hope that 
we take a moment to understand what the impact on the system is 
but on those kids, especially some that may benefit from a 
curriculum, that social learning, and those that won't.

    What that means into future years of prosperity in 
community and across the country. Now, what is incredible about 
this conflict is it boils down to subsidy rates. Most states 
use market rates, as was pointed out by our secretary earlier, 
to calculate their subsidy rate and market rates report what 
providers are charging for childcare, which is typically only 
what parents can afford.

    As was pointed out, artificially low. These low market 
rates keep wages low, revenues low, and supply low. Now, New 
Mexico became the first state in the Nation, along with D.C., 
to use this alternative methodology to set rates. I appreciate 
that. Now, Secretary Groginsky, what kinds of factors went into 
the new methodology?

    Ms. Groginsky. Thank you, Senator Lujan. Really importantly 
was how much are we going to pay our early childhood staff? So, 
we set a floor initially at $12.10. We have now set that floor 
to $15 an hour. But we are also looking at things that state 
laws require, like paid sick leave. So, we put that into it. We 
put benefits.

    We make sure that there is enough staffing so that 
educators have time out of the classroom to plan for their 
children's learning and development. So, all of those things 
are modeled into the cost model.

    Then we determine a rate, and we determine what that cost, 
and then based on our revenues and our sources, we set a rate 
that will be comparable and competitive. Senator Lujan. Now, 
Secretary, did using that methodology, the new cost model for 
it, help to expand access for families, for kids?

    Ms. Groginsky. Senator, it did. We have seen that we now 
have over almost 2,000 more license capacity than when we ? 
pre-pandemic, and so we know that it was through this rate 
setting that was using a cost model that allowed providers to 
breathe easier, to attract and recruit staff, and fully staff 
their classrooms.

    Senator Lujan. Now, New Mexico was able to make childcare 
accessible for nearly all families by increasing income 
eligibility, providing a path forward for these young people to 
be able to get access to these programs predominantly at no 
cost. I always appreciate when folks remark on our budgets, 
that they are a reflection of values.

    I hope that more and more people value access to these 
programs for our kids. Because I can attest that getting access 
to these programs, I wouldn't be here if it wasn't for them. I 
think that is one show of success when we measure access to 
these programs and what it means as well.

    Now, while Federal emergency funds temporarily allowed 
this, there needs to be more flexibility in these Federal 
programs. I appreciate everyone raising that here as well. Now, 
Secretary, yes or no, should Congress make CCDBG funds more 
flexible by allowing states to expand eligibility beyond 85 
percent of state median income, and especially in low-income 
states?

    Ms. Groginsky. Yes.

    Senator Lujan. Currently, the Federal funds do not allow 
state grantees to use funds for facility renovation or 
construction. This limits supply, reducing access for not just 
choice for families, but especially for the kids. However, the 
Federal emergency funds allowed for facility investments. So, 
my question to you is, yes or no, should Congress make the 
CCDBG funds more flexible by allowing facility renovation and 
construction?

    Ms. Groginsky. Yes, as long as there is increased funding.

    Senator Lujan. Head Start, pre-K, and childcare programs 
have a profound return on investment, as has been pointed out 
today. Now, Secretary, based on what you have seen in New 
Mexico, what is the return on investment for early childhood 
education programs?

    Ms. Groginsky. Yes, a few years ago, our Legislative 
Finance Committee did a study that showed our pre-K program 
produced a $6 to every $1 invested return. And we know now, 
with these kind of investments in childcare, we are going to 
see similar returns across the birth to five system.

    Senator Lujan. Yes or no, would you argue that the state's 
return on investment for early childhood education programs has 
increased after these Federal investments created historic 
access and quality improvements in New Mexico?

    Ms. Groginsky. Absolutely.

    Senator Lujan. Thanks for that, Mr. Chairman. I yield back.

    The Chair. Thank you very much.

    Senator Cassidy.

    Senator Cassidy. Thank you all. Senator Markwayne had to 
leave. He finished--he asked that I submit some articles to the 
record on his behalf.

    The Chair. Without objection.

    [The following information can be found on page 67 through 
102 in Additional Material:]

    Senator Cassidy. Now, he brought up something in which--
very uncomfortable, very uncomfortable about how children were 
being judged by the color of their skin, at least implicitly, 
and not by the content of their character. A couple of things 
he asked to submit shows that was not a one off.

    It also, I just want to comment on this. I will be very 
quick. But it is also introducing the young 1-to 4-year-olds to 
the concept of transgenderism, with multiple things in there to 
kind of promote the eye kind of aspect.

    Ms. Hogan, this is your organization. Are parents 
informed--do you--does your organization recommend to those 
using this material that they inform the parents beforehand the 
content of the material?

    Ms. Hogan. I will just add that, I mean, our research--
NAEYC, and again, I am not looking what you are looking at, but 
our resources have been used by hundreds of thousands----

    Senator Cassidy. But that is not my question. I understand 
that. But my question is, do you recommend that your--that the 
people using your material tell the parents the content of the 
material that their children will be--their 1-to 4-year-olds 
will be exposed to?

    Ms. Hogan. The resources that--the resources that are for 
early childhood educators to help ensure that kids are----

    Senator Cassidy. But that is--you are kind of speaking past 
my question, so I am going to have to assume----

    Ms. Hogan. They are all done in partnership with families.

    Senator Cassidy. You do recommend that the parents are 
informed that their child will be discussing transgenderism in 
their----

    Ms. Hogan. We trust early childhood educators to partner 
with----

    Senator Cassidy. But there is no formal recommendation. And 
the reason I say that, and I think I can assume that because 
you are kind of--I don't mean to accuse, but you are kind of 
ducking the answer.

    The reason I raised that is that we start off--he who pays 
the piper, picks the tune, and we start off saying, we are 
going to have this program in which, oh, my gosh, faith based, 
this is Mormon, my gosh, you are going to a statue in heaven, 
in which faith-based organizations there is positive things.

    Ms. Groginsky, you have obviously spread it around. But I 
have learned that once the Federal Government gets this kind of 
financial hooks in, it begins dictating. Good example is the 
adoption agencies, which formally anyone, they can make their 
own decisions, and now if you are a Catholic agency and you 
don't want to adopt out to a same sex couple, you get the wrath 
of the Federal Government.

    That begins to evolve over time, and I think we have to 
recognize that trend. I think that would give pause if we are 
going to make the Federal role of financing so overweening.

    Ms. Morman, again, I have never seen a witness better 
prepared than you. I mean, I just want to compliment you right 
off the bat. But one thing you raise is that it is hard for you 
to compete with $17 per hour wage. I hear the same thing from 
Medicaid providers. I hear the same thing from hospitals.

    I hear the same thing from nursing homes. Frankly, I hear 
the same thing from fast food outlets. So, if we specifically 
targeted childcare as we are going to give you a bump so that 
everybody can pay at least $15 or $17 or whatever, inevitably 
you would pull from all these other worthy organizations. Is 
that fair to them?

    Ms. Morman. The need still does not change. The workers 
need childcare. Childcare needs other educators, and we need 
each other. So together, we have got to do something.

    Senator Cassidy. I accept that. I accept that. But accept 
my role where I have the home health agency on Medicaid 
reimbursement, which is fixed, and the struggle that owner has 
when she cannot pay her employees or attract them. I think that 
is something for us to recognize here.

    A little bit you are squeezing the tube of toothpaste. Ms. 
Larin, again, excellent presentation. I enjoyed what you had to 
share. And it made clear that the dollars that went out to 
agents went out to childcare agencies. In some case, you could 
have had a childcare facility that had no kids whatsoever, but 
because everybody was afraid to send their child, but they 
still got the check, correct?

    Ms. Larin. Yes. In the early days of the pandemic, that was 
the goal of these programs, was to stabilize the industry and 
keep the childcare centers from going out of business when 
there were no children.

    Senator Cassidy. Even when there were no children.

    Ms. Larin. Correct.

    Senator Cassidy. I think that is important to recognize 
that this was a short-term thing. And the reason that there was 
an encouragement or permission of waiver of co-pays is that we 
are thinking that parents may lose their jobs because the 
pandemic shut everything down, so you wanted them to be able to 
afford, should they lose their job or have to take a lower 
paying one.

    I think it is important to know the context of all this. In 
my remaining seconds, Ms. Lukas, you said something very good 
about allowing the dollar to follow the parent and the child. I 
will note, in New York State, I am told that there are 30,000 
unfilled childcare slots. By the way, it has been asserted 
several times that people cannot go to work because they cannot 
afford childcare. That is actually an assertion.

    There is no data. It may be true, but there is no data. And 
the fact that New York has 30,000 unfilled, like I would take 
your child, but I can't take your child, you don't want to send 
your child to me, suggest that may be true. Any comment on 
that? Because I thought your point, it should follow the 
parent, was very good.

    Ms. Lukas. Yes, I do think that there is--that your parents 
know best, and they have a better sense of what options are and 
they are going to look for value that makes sense for them. 
When I look at the Head Start program, I notice how much more 
expensive each hour of Head Start is. And this is the one 
Federal directly managed Federal program.

    Yet it costs almost in some cases significantly more per 
hour. And some--I think compared to some states, nearly twice 
as much. And the Obama administration had actually looked at 
trying to loosen Head Start so that parents could--you know, 
that Head Start would be required to provide more.

    But I think it would be better to give those parents better 
options so they don't have to go to Head Start, which provides 
relatively few hours, and instead could take their business 
elsewhere to other providers who will meet their needs and the 
flexibility that they need.

    Senator Cassidy. Thank you.

    The Chair. Senator Murray.

    Senator Murray. Oh, thank you very much, Mr. Chairman, for 
having this hearing, and for all of our panelists. We have a 
childcare crisis. We can skip around words and pretend that 
curriculum is the problem or something else.

    We have a childcare crisis, and we actually had a childcare 
crisis before COVID, but it was a silent crisis because parents 
did not talk about it, because they were worried when they went 
to get a job that if they said, I don't know what I am going to 
do with my kids, they wouldn't get that job.

    But the pandemic actually opened up this conversation and 
allowed us to see the reality in this country where we aren't 
taking childcare as a serious crisis. And we did make 
considerable investments at that time with the American Rescue 
Plan and really helped some of that stabilize. But we are about 
to--I mean, it hasn't gone away, and it has gotten worse.

    I will tell you, everywhere I go in my state, people talk 
about the fact that they do want to go get that job, but they 
cannot because there are 200th on a waiting list. Or they say 
to me, yes, there is a slot open, New York, but I can't afford 
it.

    It is half my salary, or I will have to work part time, 
which why am I working part time? That--this doesn't make any 
sense--this childcare system doesn't make any sense. And to 
boil it down to a discussion about curriculum or masks is 
ludicrous. We have a childcare crisis, and we need to deal with 
it as a country.

    I will tell you, I am concerned that the stabilization 
funds that end in June are going to make it even worse, and 
that is a reality we have to face, and we need to decide what 
we are going to do about it.

    We are going to have to decide how--what we do about the 
costs. Senator Kaine talked about it. There is a dilemma 
between raising your prices so that you can pay your childcare 
workers so you can open up more slots, but then parents can't 
afford it. That is exactly why Senator Kaine and I and others 
have introduced childcare legislation and it really goes after 
that.

    To diminish this to a conversation about Government run--I 
want to put that to rest right now. And, Ms. Hogan, let me ask 
you, we keep hearing this one size fits all, Government run. 
That is not how this works. That is how it is never going to 
work, and it is how it will not work.

    I would like you, Ms. Hogan, to just talk about how we put 
this together so that it is not a one size fits all. Talk about 
the state, Federal partnership and put this to rest for us.

    Ms. Hogan. Yes, I mean, I think of Federal funding is not a 
Federal takeover, and all of the proposals build on what we 
know works, and they support flexibility. They support and 
trust educator autonomy to decide the curriculum and the 
supports that work for them. So, these aren't real about what 
is happening on the ground.

    What we know is really happening on the ground is that, to 
your point, people cannot find or afford childcare, and 
educators cannot stay in jobs that they love because they can't 
make what they need to make to be valued and stay.

    I think what we have heard today too is parents want 
different things at different times. Sometimes different things 
in the same day. And so, you can't--they need to be able to 
have those options available for them.

    Childcare isn't something that you can just like turn on 
and off when families want it. It has got to exist in order for 
families to take advantage of it where and when they want it, 
in a mixed delivery system that works. We also, faith-based 
programs are incredibly important to NAEYC and to our entire 
system.

    I think 15 percent of parents use them and it is incredibly 
important to be able to actually look at what the proposals 
offer in terms of investing in family childcare, center based, 
faith-based programs, centers, and schools, and really have 
this system that provides for true family choice, which is not 
what families have right now.

    Senator Murray. Ms. Groginsky, can you add to that? I mean, 
I don't think in New Mexico that you put out a one size fits 
all demanded curriculum, told people they had to do it this way 
or leave. Tell me how that works.

    Ms. Groginsky. Yes. Thank you, Senator Murray. Such a great 
question. It is quite the opposite. We made the conditions so 
that they could work with families and develop the programs 
that families want.

    Expanding eligibility for families was key to our success. 
Families now have more choice. Providers now have more 
revenues. They can pay their staff better. But it is all in 
partnership. Everything in our regulations is you have to make 
sure families are involved. Families know what is happening.

    It is quite the opposite of a one size fits all, what has 
happened in childcare in this country. We need more Federal 
investment, though, to make it stick and to make it work for 
families, and businesses, and fuel our economy.

    Senator Murray. Well, exactly. I think it is really 
important as a parent, I know every parent looks around what is 
the best childcare facility I can go to, what reflects my 
values, knowing that this is part of what we have to do today. 
That choice is critically important and is inherent in how our 
childcare proposal is put together, so I really appreciate 
those responses. Thank you.

    The Chair. Senator Murray, thank you, and thank you for all 
the work you have done and are doing on childcare. Senator 
Cassidy, do you have a brief closing statement--?

    Senator Cassidy. I do not.

    The Chair. Okay. Let me just thank all of the witnesses and 
just--I will just say this, this discussion and how we deal 
with childcare is a real reflection on our National priorities. 
We talk about our love for children.

    The future of America is our children, but we don't put 
that into effect when we pay childcare workers $12 an hour, 
when we charge parents rates that are unaffordable, when we 
don't have enough slots available for working families.

    I don't think it is too much to ask that in the richest 
country in the history of the world, all of our children, no 
matter where they live, no matter what their background is, get 
the quality childcare, early childhood education they need in 
order to flourish in life. I don't think that is a radical 
socialistic, if you like, statement. I think that is something 
that the vast majority of the American people believe in.

    I think it is time we got our priorities right. And if we 
get our priorities right, we put children at the top of the 
list. We reform childcare. Federal Government has an enormously 
important role to play. Let me thank all of the witnesses for 
your testimony, for being here today. We appreciate it very 
much.

    This is the end of our hearing. For any Senators who wish 
to ask additional questions, questions for the record will be 
due in 10 business days, June 14th at 5.00 p.m.. Finally, as 
anonymous consent and to the record, one statement from 
stakeholders outlining their childcare priorities. So, ordered.

    [The following information can be found on page 66 in 
Additional Material:]

    The Chair. The Committee stands adjourned.

                          ADDITIONAL MATERIAL

                          Bipartisan Policy Center,
                                                      May 31, 2023.
Hon. Bernie Sanders, Chairman,
Hon. Bill Cassidy, M.D., Ranking Member,
Senate Committee on Health, Education, Labor, and Pensions,
428 Senate Dirksen Office Building,
Washington, DC 20510.

    Dear Chairman Sanders and Ranking Member Cassidy:

    On behalf of the Bipartisan Policy Center's (BPC) Early Childhood 
Initiative (ECI), I submit this letter for the record regarding the 
Senate Committee on Health, Education, Labor, and Pensions hearing, 
``Solving the Child Care Crisis: Meeting the Needs of Working Families 
and Child Care Workers,'' scheduled to be held on May 31, 2023.

    The pandemic shined a national spotlight on the systemic 
shortcomings of our Federal approach to supporting child care for 
America's working families. A workforce plagued by low compensation, 
underemployment, deteriorating facilities, and overwork, our child care 
providers responded to the crisis by showing up for work when it was 
considered unsafe for many other professions to do so. They cared for 
one of the most vulnerable populations and risked their own safety and 
well-being to ensure our first responders were able to combat COVID 
knowing their children were safe and cared for; bringing attention to 
the vital role of child care in our National economy. As the Nation 
emerged from isolation and returned to the office in droves, the child 
care sector responded again, continuing to fill the vital role of 
caregiver and guardian of our Nation's future.

    Throughout the pandemic, Congress echoed the national sentiment 
that for our economy to recover and to maintain a stable and thriving 
workforce, families needed a reliable child care system. Congress 
responded to the need with several relief packages to support children, 
families, and providers alike which were largely successful. \1\ 
However, the support that came in the form of supplemental funding and 
targeted waiving of regulations were short-lived. Long-term, 
sustainable solutions are required to maintain the momentum and 
successes achieved. BPC urges this body to continue its long bipartisan 
history of tackling our Nation's child care needs by
---------------------------------------------------------------------------
    \1\  https://bipartisanpolicy.org/explainer/child-care-programs-
crisis/ reauthorizing the Child Care and Development Block Grant 
(CCDBG), prioritizing the deteriorating state of child care 
infrastructure, increasing supports for the child care workforce 
including registered apprenticeships, and ensuring equitable child care 
for tribal communities.
---------------------------------------------------------------------------
                     Child Care Gap Economic Impact
    A lack of access to formal child care can have a significant 
economic impact on the Nation. In BPC's 2021 report ``Child Care in 35 
States: What We Know and Don't Know,'' we examined the supply of child 
care compared to the potential need and provided the first known 
estimate of the actual gap in care for children under age six. \2\ BPC 
found that over \3\ 4 million children with all available parents in 
the workforce do not have access to a formal child care slot. This 
means a 10-year, economic loss across just 35 states estimated between 
$143 and $217 billion.3
---------------------------------------------------------------------------
    \2\  https://bipartisanpolicy.org/report/child-care-gap/
    \3\  https://bipartisanpolicy.org/download/'file=/wp-content/
uploads/2021/11/BPC-Economic-Impact-Report--R01-1.pdf
---------------------------------------------------------------------------
                 Child Care and Development Block Grant
    The Child Care and Development Block Grant (CCDBG) is the leading 
Federal program established to help working families access child care 
services. Funded by both mandatory and discretionary resources, CCDBG 
currently serves more than 1.3 million children each month. \4\ The 
program has been chronically underfunded since its inception, limiting 
the program's overall efficacy.
---------------------------------------------------------------------------
    \4\  https://www.acf.hhs.gov/occ/fact-sheet

    Despite critical congressional interventions during the pandemic to 
help the child care workforce and keep programs open, a national 
shortage of child care workers and safe facilities persists. Without 
Federal reforms that focus on increasing the supply of child care, 
parents, especially those in rural and low-income areas, will be denied 
---------------------------------------------------------------------------
access to the child care that they need.

    BPC urges this body to consider the following CCDBG 
recommendations:

          Broaden the definition of ``direct services'' to 
        include facilities infrastructure to ensure supply side 
        stability.

          Broaden Federal requirements beyond market rate 
        studies to include the use of cost modeling tools. Cost 
        modeling helps develop creative investment strategies that 
        simultaneously address staff compensation and child care 
        affordability.

          Define mixed delivery to include a combination of 
        programs offered through child care centers, family child care 
        homes, Head Start programs, and public and private schools.

          Increase income eligibility up to 150 percent of 
        state median income (SMI) with priority to first serve families 
        at 85 percent of SMI.

          Require data collection to track success and impact 
        of state-led workforce investments.

                         Child Care Facilities
    The demand for child care is not decreasing, and children need and 
deserve quality facilities. Yet, there is a national shortage of safe, 
healthy child care facilities and a critical need to invest in child 
care infrastructure. Child care businesses simply do not have the 
capital to invest in facilities. Without a Federal investment, parents, 
especially those in rural parts of the country, will be denied access 
they need and facilities meeting only the minimum health and safety 
standards for those who can obtain access to care. In 2014, for 
example, the U.S. Department of Health and Human Services Office of the 
Inspector General (HHSOIG) investigated 227 facilities across 10 states 
and found that 96 percent of facilities receiving CCDBG funding had one 
or more potentially hazardous conditions, such as broken glass, 
unlocked gates, water damage, or chemicals within reach of young 
children. \5\
---------------------------------------------------------------------------
    \5\  https://oig.hhs.gov/oas/child-care/

    The child care business model operates within thin profit margins, 
which makes it difficult to prioritize facilities investments without 
requiring cuts to other critical operating expenses. Moreover, CCDBG 
dollars cannot be used to construct or renovate facilities. BPC urges 
the committee to establish a competitive grant program funded at a 
minimum of $10 billion for states to fund construction, renovation, 
business development, and technical assistance to child care providers.
                 Child Care Registered Apprenticeships
    With a workforce that is predominately female (92 percent), poorly 
paid, and with few benefits, child care is struggling to compete for 
workers in this tight labor market. \6\ Many child care programs are 
not operating at full capacity because they simply do not have the 
staff. The importance of addressing the workforce problems cannot be 
overstated.
---------------------------------------------------------------------------
    \6\  https://bipartisanpolicy.org/blog/characteristics-of-the-
child-care-workforce/

    Maintaining the workforce has been a longstanding challenge in the 
child care field. Costs associated with obtaining a degree are high and 
historically low pay make the child care profession unattractive to 
highly skilled teachers. With a median income of $27,490 per year in 
2021 \7\, many child care workers qualify for public benefits. 
Moreover, individuals in similar industries such as elementary teachers 
are often eligible for benefits that child care educators are not. 
Registered apprenticeships (RAs) are one way to support the child care 
workforce and increase knowledge, skills, and wages across the 
industry.
---------------------------------------------------------------------------
    \7\  https://www.bls.gov/ooh/personal-care-and-service/childcare-
workers.htm

    Apprenticeship programs, like those within the Workforce Innovation 
Opportunity Act (WIOA), combine on-the-job training, classroom 
instruction, and mentorship to produce skilled workers. These programs 
have existed for decades, helping workers in advanced manufacturing, 
construction, and agricultural industries. However, child care programs 
---------------------------------------------------------------------------
lack the capital necessary to establish and maintain RA programs.

    When RA programs do exist to support the child care workforce, 
employees receive wage bumps as a reward for increasing their skills 
and knowledge. Upon completion of an RA program, child care apprentices 
receive a credential, such as a Child Development Associate (CDA)--
giving these apprentices a competitive advantage in the workforce.

    As the Committee prioritizes its work in the 118th Congress, BPC 
urges it to consider the following policy recommendations:

          Authorize use of WIOA funds for startup costs for 
        states to develop and accelerate RAs as part of an early 
        childhood career pathway.

          Require states to include child care RAs as part of 
        their workforce funding.

          Direct HHS to include RAs as a career pathway in the 
        2025-2027 Child Care and Development Fund Plan preprint.

                           Tribal Child Care
    Accessing and affording quality child care is a challenge for most 
American families, but the challenges are greater for American Indian 
and Alaska Native (AI/AN) parents due to high poverty rates, limited 
job opportunities, and lack of proximity to any type of child care 
programs. \8\ AI/AN children eligible for subsidies receive them at 
less than half the rate of the national average, \9\ with just 6 
percent of those eligible receiving subsidies. \10\
---------------------------------------------------------------------------
    \8\  https://bipartisanpolicy.org/report/righting-a-wrong-
advancing-equity-in-child-care-funding-for-american-indian-alaska-
native-families/
    \9\  https://bipartisanpolicy.org/blog/accessing-child-care-
subsidies/
    \10\  https://www.clasp.org/sites/default/files/public/resources-
and-publications/publication-1/CloserLookAtLatinoAccess.pdf

    Insufficient funding for tribal child care restricts opportunities 
for AI/AN families with 53 percent of AI/AN parents indicating in a BPC 
survey that child care responsibilities impacted their ability to work 
over the past month. \11\ Improvements to current Federal programs 
through better data, less red tape, and increased transparency could 
help to improve access to child care for AI/AN families.
---------------------------------------------------------------------------
    \11\  https://bipartisanpolicy.org/blog/findings-from-bpcs-survey-
of-american-indian-alaska-native-parents/

    Therefore, BPC urges this Committee to consider the following 
---------------------------------------------------------------------------
policy recommendations:

          Set CCDBG funding levels for tribes based on the 
        number of AI/AN children rather than an arbitrary, flat 
        percentage of Federal funding.

          Authorize a pilot program within CCDBG to allow 
        tribes to provide services to AI/AN children living off the 
        reservation and outside of the current service area.

          Authorize tribes to access FBI fingerprinting to meet 
        CCDBG background check requirements while ensuring a timely 
        hiring process.

          Examine the extent to which HHS and the BIA 
        coordinate oversight of CCDBG funds transferred under P.L. 102-
        477 plans to support child care services and quality 
        improvement by conducting oversight hearings.

          Conduct oversight hearings to examine the U.S. Census 
        Bureau's work with tribes and other Federal agencies to ensure 
        more accurate data is collected. At a minimum, include the 
        Department(s) of HHS, Education, Agriculture, Labor, and 
        Interior (Bureau of Indian Affairs). Data includes items such 
        as number of children by age, location (on/off tribal lands), 
        employment status of parents, access to child care, and cost of 
        care.

    BPC appreciates the continued bipartisan dedication to child care 
and hopes you will consider us a resource as this Committee works 
toward improving our systems to help children and families. If you have 
any questions, please contact BPC Early Childhood Initiative Associate 
Director Brittany Walsh at [email protected].

            Sincerely,
                                            Linda K. Smith,
                                                          Director,
              Bipartisan Policy Center, Early Childhood Initiative.
                                 ______
                                 
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    [Whereupon, at 12:07 p.m., the hearing was adjourned.]

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