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President Biden taps agencies to tackle rising costs of child care

The Biden administration wants to require some companies seeking federal funds to provide child care services for workers.
Posted at 6:31 AM, Apr 18, 2023

President Joe Biden is calling on agencies throughout the federal government to tackle the rising cost of child care in America after his efforts to work with Congress on the issue have stalled. 

The President signed an executive order on Tuesday that includes more than 50 directives across federal agencies to address the ongoing child and family-care challenges. 

During a Rose Garden address, President Biden announced an 'all of government' approach, including more than 50 directives across federal agencies — from requiring some companies seeking federal funds to provide child care services for workers, to directing certain agencies to lower co-pays for services.

"The actions we're taking today are about dignity, security and peace of mind for working families and caregivers all across the country. And they're good for the economy as well," Biden said. 

The executive order directs agencies from Veterans Affairs to Health and Human Services, the Department of Labor and the Office of Personnel Management to undergo evaluations, as well as identify programs that would allow an expansion of benefits or reimbursements for child and long-term care. 

The administration is also asking for the identification of programs working on federal projects to require those "seeking federal job-creating funds to expand access to care for their workers." 

This would work similarly, according to the administration, to a program for child and long-term care issued under the CHIPS Act

"That means federal agencies... will identify which programs can support child care and long-term care for workers who are delivering on these federal projects. Those agencies will then consider requiring or encouraging applicants seeking federal job creation funds to expand access to care for their workers," Susan Rice,  domestic policy adviser in the Biden administration, explained on a briefing call. 

At the HHS, the order requires a series of different rule-making policies, from working to increase the pay and benefits for Head Start teachers and staff to regulations that would improve the quality of home care jobs.

"Hundreds of thousands of older Americans and people with disabilities are on waiting lists for home care services. A core problem is the mismatch of the prices for care and what families can afford to pay," said Heather Boushey, member of the Council of Economic Advisers. "Yet, even so, care jobs remain among the lowest paid in our economy. Workers in care industries are 20 to 30% less than similar workers in related professions." 

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The President and congressional Democrats had hoped to pass plans that would boost child care subsidies nationally, including capping copayments at no more than 7% of annual household income. Those plans fell apart without bipartisan support. 

According to an analysis by Lending Tree, U.S. families who pay for child care spend 17.8% of their income, on average, on it. 

While families won't feel the impact of this order immediately, or likely in the near future, senior administration officials said each agency will move at its own pace to begin implementing changes. 

"They are all on slightly different, different timelines. But in all cases, we are looking to work with agencies to move as quickly as possible; and as quickly as possible is going to vary based on the specific thing," they said 

A recent study found lacking "affordable, high-quality child care costs the American economy $122 billion annually." and that "85% of primary caregivers said problems with child care hurt their efforts or time commitment at work." 

The administration said the order would not be accessing new money but trying to leverage funds already provided and using their authority effectively and leveraging incentives to ensure better access and jobs. 

"I expect the President to continue making case for (congressional action), but at the same time, this is an issue of fundamental importance in this country. And the goal is to do everything you can with every lever, you have to make most of the existing federal funds that are going out," a senior administration official said.