CHILD CARE UPDATE

March 13, 2003

Yesterday, the Senate Finance Committee held its first Washington-based hearing on the reauthorization of TANF and mandatory Child Care funding in this session of Congress. Earlier in the year, the Committee held a hearing in the state of Iowa—the home state to Committee Chair Charles Grassley.

Senator Grassley suggested that the committee might attempt to vote on legislation sometime in the spring, perhaps as late as May.

As was the case last year, child care was a significant issue for committee members. Chairman Grassley indicated that he wanted to work on the issue in a bipartisan basis and wanted to work with states as one of the crucial stakeholders.

The primary witness was Secretary Tommy Thompson from the Department of Health and Human Services. A great deal of the questioned revolved around the administration’s and the House’s proposal to increase work requirements for TANF recipients. The House/Administration proposal would raise current requirements from 30 hours per week to 40 hours with only a $200 million increase in mandatory child care funding over the five year period of the reauthorization. In particular members raised concerns regarding how the work requirements would increase child care demands. Secretary Thompson defended the proposal and pointed to the House’s inclusion of authorizing language that would allow child care funding to increase by $200 million a year if the Senate and House Appropriations Committee’s agreed to such increases each year.

Child care is funded in two ways: mandatory funding is automatically released each year and is not dependent upon the annual appropriations debate and process. Discretionary funding requires an annual appropriation. Child care funding provided this way must compete with education, Head Start, child welfare, health research and other such human services. Currently Child Care funding includes $2.7 billion in mandatory funds and $2.1 billion in discretionary funding.

Senator’s Comments

Senator Baucus raised concerns about the work rates and how difficult it was to find child care in rural areas.

Senator Breaux raised concerns about the work rates and lack of child care funding. He cited previous Congressional Budget Office analysis of the proposal which indicate it will take over $11 billion more for states to implement the entire proposal with at least $5 billion of that required to meet the increased child care needs.

Senator Jeffords expressed concerns over not fully funding early childhood education funding.

Senator Bingaman criticized the fact that the House bill could increase funding for child care only if future appropriations bills included such increases. He pointed to tight future budgets.

Senator Rockefeller talked about the tough situation his state of West Virginia is in and that the state has already had to cut back child care eligibility and services. He pointed out that the bill would only make that situation worse.

Next Steps

The House has passed HR 4, TANF and Child Care reauthorization. A description is available on our web site. The Senate Finance Committee must pass their version of TANF reauthorization along with mandatory funding of child care. The Senate HELP Committee will have to pass a child care reauthorization and in all likelihood the two bills would be combined as one bill for Senate floor debate.

There still seems to be support in the senate for increased child care funding beyond what either the House or White House support. A bipartisan group of Senators in this committee last year voted for $5.5 billion in increases in mandatory child care funds. It is not clear how those members will line up yet. It does appear that senator Grassley will support increases in work requirements but not the level the White House wants. It is also unclear how much of a child care increase he would support.

At this point the Senate may act on their bill in April or as late as May. It is unclear about timing. The Finance Committee will also be responsible for any tax cut package and Medicare prescription drug and Medicare reform proposal.

Next week the Senate intends to debate a budget resolution. That should take a full week of debate. If a war starts in Iraq next week, the floor schedule could change as members take up legislation to fund a war. This would likely pushing time back on all legislation.