The Biden administration announced Thursday that they are releasing $39 billion in funds from the $1.9 trillion American Rescue Plan to help address the child care crisis brought about by the COVID-19 pandemic.

What You Need To Know

  • The White House announced Thursday that they are releasing $39 billion in funds to help address the ongoing child care crisis

  • Vice President Kamala Harris said Thursday afternoon that the historic investment will "give childcare providers and workers a lifeline, and it will give parents peace of mind” 

  • According to one study from December, approximately one in four child care providers closed during the pandemic; many were owned by women 

  • The funds will be used for upgrades to ventilation systems in child care centers, purchasing of PPE, rehiring laid-off workers, and more 

Vice President Kamala Harris spoke Thursday afternoon about the administration's historic investment in child care, saying the funds will “give childcare providers and workers a lifeline, and it will give parents peace of mind.” 

“The strength of our country, the resilience of our economy, depends on the affordability and availability of childcare,” she continued, adding: “When it comes to childcare in our country, families need help. Even before the pandemic, childcare cost too much, and it was too hard to find — and for too many families, outside of their reach. The pandemic has accelerated the flaws and the fissures in our system.”

Since the start of the pandemic, the White House said, nearly 2 million women have left the labor force, "disproportionately due to caregiving needs and undoing decades of progress improving women’s labor force participation rate," and as women work to regain employment, families of young children, particularly families of color, could face financial burdens in the coming years.

Early childhood and child care providers, which the administration notes are nearly all small businesses "overwhelmingly owned by women and disproportionately owned by people of color," have also suffered great losses during the COVID-19 pandemic, seeing decreasing revenues amid higher expenses for cleaning, personal protective equipment, and other costs to operate in a safe manner.

According to one study from December, approximately one in four child care providers closed during the pandemic, and those that stayed open have had to take on debt or lay off employees to survive.

“For many, many people, and many women in particular, childcare has often been the prerequisite for their ability to work. And for many others, childcare is their work,” Harris said Thursday. “That’s why in America, childcare should be readily available and affordable for all of those who need it.”

Per the White House, the $39 billion in funding "will provide a lifeline to hundreds of thousands of childcare providers and early childhood educators, provide a safe and healthy learning environment for more than 5 million children, and help parents, especially mothers, get back to work."

The Biden administration is directing tribes, states and territories to use the funding in the following ways:

  • Help child care centers and family child care providers contribute to rent or mortgage payments, utility or insurance bills, maintaining or improving facilities, and paying off debt incurred during the pandemic
  • Allow providers to keep workers on payroll, rehire laid off workers and recruit new workers, and increase the pay and benefits of child care workers and family child care providers
  • Provide direct subsidies to families performing essential work or earning below 85% state median income

The White House also touted the Child and Dependent Care Tax Credit (CDCTC) increase in the American Rescue Plan: "Thanks to the historic expansion of the CDCTC in the American Recovery Plan, a median income family with two kids under age 13 will receive up to $8,000 towards their child care expenses when they file taxes for 2021, compared with a maximum of $1,200 previously."

The administration will provide guidance to tribes, territories and states in the coming weeks.

"We are giving the people of this nation help — with checks, with lower healthcare costs, with childcare assistance, and so much more," Harris concluded Thursday's address. "We are giving America hope."

Click here to see the breakdown for how much funding each state, tribe and territory will receive.