Child Care Reauthorization: A Side-by-Side Comparison of Child Care Provisions in H.R. 4, S. 880 (108th Congress), and Current Law
Released: 2005-01-03T00:00:00

Introduction

"Child care reauthorization" is composed of two parts: legislation to reauthorize the ChildCare and Development Block Grant (CCDBG) Act and legislation to extend mandatory fundingappropriated under Section 418 of the Social Security Act. The CCDBG Act authorizesdiscretionary funds and contains all provisions pertaining to the administration of CCDBG programs. Section 418 of the Social Security Act appropriates mandatory money to be administered underprovisions included in the CCDBG Act.

The 108th Congress did not complete action to reauthorize either the CCDBG Act itself, orthe mandatory child care funding appropriated under the Social Security Act (along with theTemporary Assistance for Needy Families block grant). Both expired at the end of FY2002. However, funding for the CCDBG has been continued via a series of temporary extensions (in thecase of the mandatory funding) and annual appropriations law (for the discretionary funding portion).

In terms of reauthorization legislation, the House passed a consolidated bill, H.R. 4 (Personal Responsibility, Work, and Family Promotion Act of 2003), whichincluded discretionary funding authorization, a mandatory appropriation, and amendments to theCCDBG Act (alongside provisions to amend and extend funding for Temporary Assistance forNeedy Families [TANF] (1) ).

In the Senate, two separate bills were reported from their respective committees, butultimately failed to reach a final vote on the full Senate floor. The Senate Finance Committee'sreported substitute version of H.R. 4 (Personal Responsibility and IndividualDevelopment for Everyone Act [PRIDE]) included mandatory funding for child care, while theSenate Health, Education, Labor, and Pensions Committee's reported bill, S. 880 (TheCaring for Children Act of 2003), included all provisions pertaining to discretionary fundingauthorization, and would have amended the CCDBG Act itself. Although the Senate bills nevermade it to a final floor vote, it should be noted that when the legislation was brought to the floor, oneamendment, offered by Senator Snowe, was accepted (78-20). That amendment proposed to increasemandatory child care funding above the amounts proposed in the House-passed, and Senatecommittee bill. Below is a summary of key provisions in all three bills (and the Snowe amendment,as passed on the floor), followed by Table 1 , a detailed side-by-side comparison of each bill'sprovisions with current law. (2)

Summary of Provisions

Funding

Discretionary Authorization. The discretionaryportion of child care funding is authorized by the Child Care and Development Block Grant Act (asamended in 1996). Under current law, discretionary CCDBG funding is authorized at $1 billionannually. However, actual appropriation levels, determined during the annual appropriationsprocess, have exceeded the authorized level (e.g., FY2004 = $2.1 billion). Both the House versionof H.R. 4 (The Personal Responsibility, Work, and Family Promotion Act of 2003), and S. 880 (The Caring for Children Act of 2003) proposed to authorize discretionaryfunding at $2.3 billion in FY2004, rising by $200 million each year, up to $3.1 billion in FY2008. (The discretionary funding authorization does not fall under the Senate Finance Committee'sjurisdiction, and therefore was not addressed in the Senate committee-reported version of H.R.4.)

Mandatory Appropriation. Mandatory fundingfor the CCDBG was preappropriated in Section 418 of the Social Security Act for FY1997-2002,as part of the welfare law of 1996 ( P.L. 104-193 ). A series of temporary extensions have continuedthat funding since the close of FY2002. Funding has been maintained at the FY2002 annual rate of$2.717 billion.

The House-passed version of H.R. 4 would have set mandatory child carefunding at $2.917 billion for each of FY2004-2008 (for an increase of $1 billion over five yearsabove current funding). The version of H.R. 4 reported by the Senate Finance Committeecontained the same $1 billion increase in mandatory child care funding over five years; however,Senator Snowe expressed plans at the time of voting for the committee bill to offer an amendmentfor a greater child care increase when the bill was brought to the Senate floor. (The mandatoryfunding does not fall under Senate HELP Committee jurisdiction, and therefore was not addressedin S. 880 .)

When the bill was considered on the floor (March 30, 2004), S.Amdt. 2937 (Snowe) was offered and approved by a vote of 78-20. The amendment would have provided anadditional $6 billion (over five years) in mandatory child care funding, above the $1 billion ($200million in each of five years) provided in the underlying bill, H.R. 4 (as passed by theHouse, and as passed by the Senate Finance Committee). The additional $6 billion would have beenallotted among the years as follows: $700 million in FY2005; $1 billion in FY2006; $1.2 billion inFY2007; $1.4 billion in FY2008; and $1.7 billion in FY2009.

Authority to Transfer TANF Funds. Undercurrent law, states have the authority to transfer up to 30% of their annual TANF block grant to theCCDBG (only 20% if they choose to transfer 10% to the Social Services Block Grant). TheHouse-passed version of H.R. 4 would have allowed states to transfer up to 50% of theirannual TANF grants to the CCDBG. The Senate version of H.R. 4 proposed to maintaincurrent law.

Use of Funds for Direct Services. Current lawincludes no provision requiring a given percentage of funds appropriated under the CCDBG Act tobe spent on direct services. S. 880 would have required that after the reservation ofset-asides, at least 70% of the funds remaining be used to fund direct services (as defined by thestate). The House bill had no comparable provision.

Option to Use Excess Funds for Increasing PaymentRates. S. 880 would have allowed states that receive funding abovetheir FY2003 levels to use a portion of the excess to support payment rate increases for providersand to establish tiered payment rates. Under S. 880 , stricter requirements to set paymentrates in accordance with biennial market rate surveys would have been added to the statute.

Quality Activities

Quality Set-Aside. Current law requires that atleast 4% of each state's total CCDBG expenditures (from all sources -- e.g., mandatory,discretionary, matching funds) be used for quality activities, described as: providing comprehensiveconsumer education to parents and the public, activities that increase parental choice, and activitiesdesigned to improve the quality and availability of child care in the state.

Both the House-passed version of H.R. 4 and the HELP Committee's S. 880 would have raised the percentage of CCDBG funds that must be spent for qualityactivities to a minimum of 6%.

Definition of "Quality Activities". Both billsprovided greater detail than current law in terms of defining what classifies as a "quality activity." In each, categories of activities were outlined to include school readiness activities (includingactivities to enhance early literacy); training and professional development for staff; and initiativesor programs to promote or increase retention of qualified staff. The categories reflected a newemphasis on school readiness as a goal of the CCDBG. The Senate bill ( S. 880 ) alsospecified that quality funds could have been spent on evaluating and assessing the quality ofprograms, and their effectiveness in improving overall school preparedness. While S. 880clearly stated that quality funds must be spent for any of the six listed purposes, H.R. 4 (House) provided three broad categories, similar in topic to those in S. 880, with a fourth,more general category of "other activities as approved by the state."

Eligibility

Federal law currently requires that children eligible for services under the CCDBG must havefamily income that does not exceed 85% of the state median (for a family of that size). However,states have the discretion to adopt income eligibility limits below this federal maximum. Both theHouse-passed version of H.R. 4 and S. 880 proposed to eliminate thefederal maximum of 85% of state median income (SMI) from the CCDBG law, replacing it with aprovision allowing states to set income eligibility levels (with no federal ceiling), with prioritiesbased on need.

State Plan Requirements

Under current CCDBG law, states are required to submit plans every two years, certifyingthat their CCDBG programs include specified elements addressing areas such as parental choice,parental access, consumer education, licensing, and health and safety requirements.

Both the House version of H.R. 4 and the HELP Committee's S. 880 would have amended current law to require that additional elements be certified in their stateplans. Areas that would have been modified or added related to providing consumer educationinformation; describing or demonstrating state coordination of child care services with other earlychildhood education programs; certifying compliance with the quality set-aside percentagerequirement; and addressing special needs child care.

Unlike the House version of H.R. 4 , S. 880 included provisionsrequiring that in their state plans, states demonstrate that the process for redetermining eligibilityoccur no more frequently than every six months (with limited exceptions), and also that the state plandescribe any training requirements in effect for child care providers. The Senate bill would also haveput into statute the requirement that the provider payment rates, described in the state plan, be setin accordance with a statistically valid and reliable biennial survey of market rates (without reducingthe number of families served). State plans would also have been required to include the results ofthose surveys and to contain a description of how the state will provide for timely payment toproviders. Results of the survey would also have been required to be made available to the publicno later than 30 days after the survey's completion.

Data Collection and Reporting Requirements

Current law specifies a set of data reporting requirements for states to collect in theadministration of their CCDBG programs. States collect data on a monthly basis and submit to theDepartment of Health and Human Services (HHS) disaggregated data on a quarterly basis. Anaggregate report is required to be submitted to HHS on an annual basis.

S. 880 would have retained the quarterly reporting in current law, but wouldhave amended the list of data elements that states would be required to collect on a monthly basis. (See Table 1 for details.) It would also have eliminated the separate annual report, instead requiringthat the fourth quarterly report include information on the annual number and type of child careproviders and the method of payment they receive. The House version of H.R. 4 wouldhave retained current law, containing none of these provisions.

Other Provisions

Titles II and III of S. 880 proposed provisions that stood apart from CCDBG lawor Section 418 of the Social Security Act. Title II of the bill contained provisions to enhance securityat child care centers in federal facilities, and Title III would have established a small business childcare grant program, through which competitive grants would have been awarded to states forestablishment and operation of employer-operated child care programs.

Detailed Comparison of Child Care Provisions of both House and Senate Versions of H.R. 4, S. 880, and Current Law

Table 1 provides a detailed comparison of the child care provisions included in theHouse-passed and Senate Finance Committee-reported versions of H.R. 4 , the SenateHELP Committee-reported S. 880 , with current law. In some cases, current law refersto the Child Care and Development Block Grant Act, while current law provisions pertaining to themandatory child care funding are included in Section 418 of the Social Security Act. The bracketedreferences in each of the cells refer to the section of the applicable law or proposed bill. In thesection regarding the mandatory (entitlement) funding, the Snowe amendment, as passed during theshort-lived Senate floor consideration is noted.

Table 1. Comparison of Current Law with Child Care Provisions in H.R. 4 as Passed by the House, asReported by the Senate Finance Committee, and S. 880