The Child Care and Development Fund (CCDF) is the main source of federal funding dedicated primarily to child care subsidies for low-income working families. The term "CCDF" is not found in statute. Instead, it was coined by the U.S. Department of Health and Human Services (HHS) in regulations issued after the 1996 welfare reform law made major changes to federal child care programs. The term serves as a useful catch-all when discussing the complex financing structure currently underlying federal funding for child care. The CCDF encompasses several funding streams, including federal discretionary child care funds authorized by the Child Care and Development Block Grant (CCDBG) Act, federal mandatory child care funds authorized by Section 418 of the Social Security Act (sometimes referred to as the Child Care Entitlement to States (CCES)), state maintenance-of-effort (MOE) and matching funds associated with the Child Care Entitlement to States, and federal funds transferred to the CCDF from states' Temporary Assistance for Needy Families (TANF) block grants. Mandatory and discretionary CCDF funds are appropriated separately and are allocated to states using different formulas. Although these funds are allocated to states in different ways, federal law generally directs states to spend these dollars according to the same CCDBG Act rules. TANF funds transferred to the CCDF are also subject to CCDBG Act rules. States spent roughly $8.6 billion from these combined federal and state funding streams in FY2012, the most recent year for which data are fully available. Separate from the CCDF, statute allows states to spend federal TANF funds and state TANF MOE on child care services directly within state TANF programs. However, these "TANF-direct" child care expenditures are not subject to CCDBG Act rules. In FY2012, states spent roughly $2.8 billion in TANF-direct child care programs, when counting expenditures of federal TANF funds and certain state TANF MOE funds. This means that TANF-direct child care spending (federal and state) bolstered total spending on child care by 33% in FY2012. Because of this broad universe of funding streams, federal appropriations are not necessarily the best measure of total spending on child care. Instead, appropriations to the CCDF represent the minimum level of federal investment in child care. The CCDF (through the CCES) also sets minimum expectations regarding state investments in child care. TANF statute then gives states the flexibility to augment CCDF appropriations with additional funds, either via transfers to the CCDF or with TANF-direct child care spending. As a result, CCDF appropriations tell only part of the child care story. This report attempts to provide a more complete picture by reviewing trends in total child care spending from the CCDF and TANF since FY2000. It briefly describes the legislative evolution of these funding streams, with particular emphasis on the welfare reform law of 1996. This law largely established the current federal landscape, setting up a formal infrastructure for child care programs through the CCDF, while giving states the option to provide additional child care investments with TANF funds. In doing this, the 1996 law set up an interesting dynamic: the federal government determines basic program rules and minimum spending levels for the CCDF, while state governments determine whether TANF funds will be spent on child care and, if so, what basic program rules will apply. Following this discussion, the report presents detailed historical expenditure data across funding streams, as well as data on children served (where possible). The report concludes with some brief observations about what these spending trends may mean for the current child care landscape, with particular consideration given to the substantial nature of TANF contributions to total child care spending, as well as implications of the CCDBG reauthorization law enacted in November 2014. Readers should note that it is beyond the scope of this report to examine spending on child care from other federal programs or tax provisions (e.g., the Child and Dependent Care Tax Credit). For a broader discussion of federal funding streams that may be used to support child care and early education, see CRS Report R40212, Early Childhood Care and Education Programs: Background and Funding . This section presents highlights of key trends in CCDF and TANF child care spending over the period of FY2000-FY2012. Note that CCDF expenditure data in this report (including estimated TANF transfers) are tracked against the year in which they were initially awarded or allocated. For instance, "FY2012 expenditures" are funds that were allocated to states in FY2012 and spent during FY2012-FY2014. By contrast, data for TANF-direct child care (federal and state) reflect total spending in a given year, regardless of the year in which the funds were first made available. Total Spending: Over the course of this period, total combined CCDF and TANF spending on child care (federal and state) increased in nominal dollars from $10.2 billion in FY2000 to $11.4 billion in FY2012, an increase of $1.2 billion (+12%). However, when adjusting for inflation (i.e., using constant or real dollars ), total spending declined over this same period, from $13.7 billion in FY2000 to $11.4 billion in FY2012, a decrease of $2.3 billion (-17%). Historic al Peak: Combined CCDF and TANF spending on child care (federal and state) peaked in FY2009, regardless of whether dollars are adjusted for inflation. Spending for that year totaled $14.0 billion in nominal dollars and nearly $15.0 billion in constant dollars. This historical peak was primarily driven by the influx of $2.0 billion in additional discretionary appropriations from the American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5 ). Federal vs. State Share: Federal spending accounted for roughly 70% of all expenditures over this period, with state contributions making up the remaining roughly 30%. CCDF expenditures accounted for the majority of federal spending in all years, with TANF-direct federal child care accounting for between 10% and 15%. CCDF vs. TANF-Direct: Spending from the CCDF (federal and state, including TANF transfers) accounted for about 75% of all expenditures on child care during this period. TANF-direct child care spending (federal and state) accounted for the remaining 25%. Notably, these TANF-direct dollars are not subject to CCDBG Act rules. TANF Contributions: Total federal and state spending on child care originating in TANF programs represented more than one-third (between 36% and 48%) of all child care expenditures for each of FY2000 to FY2012. These totals include TANF transfers, which are subject to CCDBG Act rules and are generally treated as discretionary CCDF expenditures. TANF transfers peaked at the beginning of this period, representing 68% of discretionary CCDF expenditures and 30% of all CCDF expenditures for FY2000. Since then, TANF transfers have generally declined. In FY2012, TANF transfers of $1.4 billion accounted for 39% of discretionary CCDF expenditures and 16% of all CCDF expenditures for that year. Children Served: Data are not collected on the number of children served by TANF-direct child care, so the total number of children served by these combined funding streams is not known. However, data are collected on children served by the CCDF. These data show that the number of children served in an average month by the CCDF has experienced fluctuations but has generally been on the decline since FY2006. Over the course of FY2000-FY2012, the caseload peaked at roughly 1.8 million children served in an average month in FY2001 and dropped to a low of roughly 1.5 million in FY2012, a decrease of almost 359,000 children (-20%). The CCDF—and its relationship to TANF—is better understood by tracing its evolution from the federal supports for child care that existed prior to 1996, when the welfare reform law ( P.L. 104-193 ) simultaneously repealed, created, and consolidated federal child care programs (see Figure  1 ). Before 1996, four separate federal programs supported child care for low-income families: Aid to Families with Dependent Children (AFDC) Child Care, Transitional Child Care, At-Risk Child Care, and the Child Care and Development Block Grant. Three of these four programs—AFDC Child Care, Transitional Child Care, and At-Risk Child Care—were associated with AFDC, the cash welfare system in place at that time. Each of these three programs was funded with mandatory money and fell under the jurisdiction of the Ways and Means Committee in the House and the Finance Committee in the Senate. The AFDC Child Care and Transitional Child Care programs were both open-ended federal entitlements, while the At-Risk Child Care program was a "capped entitlement" to states. All three programs were funded jointly by the federal government and the states, with the relative share of federal and state contributions determined by the Federal Medical Assistance Percentage (FMAP) matching rate, also known as the Medicaid matching rate. The fourth pre-1996 child care program for low-income families was the CCDBG, which was established by the CCDBG Act of 1990 as a component of the Omnibus Budget Reconciliation Act ( P.L. 101-508 ). The CCDBG was designed to support child care for low-income families who were not connected to the AFDC welfare system. Unlike the AFDC-related programs, the CCDBG was funded with annual discretionary appropriations. States were not required to match the federal funding they received from the discretionary CCDBG.