Child Care Issues in the 108th Congress

CRS Report for Congress
Child Care Issues
th
in the 108 Congress
Updated December 17, 2004
Melinda Gish
Domestic Social Policy Division

Congressional Research Service ˜ The Library of Congress

Child Care Issues in the 108 Congress
Summary
The 108^th Congress inherited several child care-related agenda items from the
previous Congress, including tasks of providing FY2003 appropriations for many
child care-related programs and the reauthorization of both the Child Care and
Development Block Grant (CCDBG) and the welfare block grant (Temporary
Assistance for Needy Families (TANF). The appropriations task was completed,
whereas the issue of reauthorizing CCDBG and TANF will again spill over, into the
hands of the 109^th Congress.
FY2003 appropriations were provided in the form of the Consolidated
Appropriations Resolution 2003, signed into law (P.L. 108-7) on February 20, 2003.
Among other funding, the law included $2.1 billion in discretionary funds for the
CCDBG and $6.668 billion for Head Start. Mandatory child care funding and TANF
block grant funding (both of which expired at the end of FY2002) have been
provided at the FY2002 level via a series of temporary extensions, as the programs
await reauthorization. The 109^th Congress will confront an additional extension if
reauthorization legislation is not passed before March 31, 2005.
Two weeks prior to the signing of the FY2003 appropriations law, the
Administration released its budget request for FY2004. It proposed to maintain level
funding for the CCDBG, TANF, and the Social Services Block Grant (SSBG), while
providing increases for Head Start, Early Reading First, and Individuals with
Disabilities Education Act (IDEA) grants for infants and families. The FY2004
budget requested cuts in funding for the 21^st Century Community Learning Centers
and Even Start.
The President’s FY2004 budget also included proposals to transfer the Head
Start program from HHS to the Department of Education, and to offer states the
opportunity to administer the Head Start program, both in the context of the
program’s anticipated reauthorization, which, like that of CCDBG and TANF, did^th
not occur during the 108 Congress. The House-passed reauthorization bill (H.R.
2210) did not include the transfer proposal, but it did propose an eight-state
demonstration program. The Senate HELP committee-reported bill (S. 1940)
contained neither the transfer nor the state demonstration proposals, and differed
markedly from the House-passed bill. A Strategic Teacher Education Program and
a national reporting system for assessing Head Start programs’ effectiveness with
respect to promoting school readiness were implemented without legislative action.
The FY2004 appropriations bill was not signed into law (P.L. 108-199) until 10
days before the President’s FY2005 budget was released. FY2004 appropriations
generally maintained the prior year’s funding, with Head Start and Early Reading
First receiving increases. For FY2005, the President requested level funding for the
CCDBG, SSBG, 21stCCLC and IDEA preschool; increases for Head Start, Early
Reading First, and IDEA infants and families; and no funding for the Early Learning
Fund and Even Start. Final FY2005 appropriations mirrored only a portion of the
proposed increases, and did not eliminate the latter two programs.

Contents
Recent Developments..........................................1
Federal Child Care-Related Programs and Tax Provisions..............1
Child Care and Development Block Grant (CCDBG)..............1
Temporary Assistance for Needy Families (TANF)...............2
Child and Adult Care Food Program (CACFP)...................3
Social Services Block Grant (SSBG)...........................3
Head Start................................................3
21^st Century Community Learning Centers (21^st CCLC)............4
Even Start................................................4
Individuals with Disabilities Education Act (IDEA) Programs.......5
Early Learning Fund/Early Learning Opportunities Act Program.....5
Early Reading First........................................5
Early Childhood Educator Professional Development.............5
Loan Forgiveness for Child Care Providers......................5
Child Care Access Means Parents in School (CAMPIS)............6
Dependent Care Tax Credit (DCTC)...........................6
Dependent Care Assistance Program (DCAP)....................6
FY2003 Appropriations.........................................8
FY2004: Comparing President Bush’s Budget Proposals
to the Final Appropriation Levels ...........................9
CCDBG .................................................9
Social Services Block Grant.................................9
Head Start................................................9
21^st Century Community Learning Centers.....................10
Even Start...............................................10
IDEA Grants for Infants and Families.........................11
IDEA Preschool Grants....................................11
Early Learning Fund/Early Learning Opportunities Act Program....11
Early Childhood Educator Professional Development............11
Early Reading First.......................................11
Child Care Access Means Parents in School (CAMPIS)...........12
Loan Forgiveness for Child Care Providers.....................12
President Bush’s FY2005 Budget Request.........................14
FY2005 Appropriations........................................15
Administration’s Early Childhood Initiative........................17
Legislative Activity in the 108^th Congress..........................17
Child Care and Welfare Reauthorization.......................17
Comprehensive Child Care Legislation........................19
Other Child Care-Related Legislation.........................20
Hearings ....................................................20

List of Tables
Table 1. Funding for Federal Child Care and Related Programs,
FY2001-FY2005 ..............................................7
Table 2. Comparison of FY2004 President’s Request and House
and Senate Proposals with Final FY2004 Appropriations..............13
Table 3. Bush Administration’s FY2005 Funding Request Compared
to FY2004 Funding for Select Programs...........................15
Table 4. FY2005 Proposed and Enacted Funding Levels for Select Programs.16

th
Child Care Issues in the 108 Congress
Recent Developments
On December 8, 2004, the Consolidated Appropriations Act, 2005 (H.R. 4818)
was signed into law (P.L. 108-447), providing funding for a variety of child care and
related programs. The law includes an across-the-board rescission of 0.8%, which
applies to the discretionary programs discussed in this report; however, not all federal
agencies (e.g., the Department of Health and Human Services) have released funding
tables reflecting the rescission, so precise appropriation levels remain to be seen.
(For details regarding FY2005 funding for child care and related programs, see
FY2005 Appropriations, later in this report.)
On September 30, 2004, Congress approved H.R. 5149 (P.L. 108-308), a
measure to extend funding (at the current rates) for both TANF and the mandatory
portion of the Child Care and Development Fund through March 31, 2005. (Both the
TANF and CCDF programs continue to await reauthorization.)
Federal Child Care-Related Programs and Tax Provisions
Several federal programs support child care or related services, primarily for
low-income working families. In addition, the tax code includes provisions
specifically targeted to assist families with child care expenses. Descriptions of those
programs and tax provisions follow, as does Table 1, which shows funding (or
estimated revenue loss or obligations where applicable) for the programs and tax
provisions for the past five years. In many cases, other Congressional Research
Service (CRS) reports are referenced as sources for more detailed information about
individual programs. Several programs were up for reauthorization during the 108^th
Congress (i.e., CCDBG, TANF, Head Start, and IDEA), and readers should be aware
that this report does not attempt to cover all issues connected with each of those
reauthoriz ations.
Child Care and Development Block Grant (CCDBG).¹ The primary
federal grant program funding child care is the CCDBG, which was created in 1990,
and reauthorized and substantially expanded in 1996, as part of welfare reform. The
CCDBG has been due to be reauthorized since the end of FY2002, and remains so^th
as the 108 Congress comes to a close. The CCDBG is administered by HHS, and
provides formula block grants to states, which use the grants to subsidize the child
care expenses of families with children under age 13, if the parents are working or
in school and family income is less than 85% of the state median. (In practice, many

¹ For more information, see CRS Report RL30785, The Child Care and Development Block
Grant: Background and Funding, by Melinda Gish.

states establish income eligibility levels that are lower than this federal threshold.)
Child care services are provided on a sliding fee scale basis, and parents may choose
to receive assistance through vouchers or certificates, which can be used with a
provider of the parents’ choice, including sectarian providers and relatives.
States receiving CCDBG funds must establish child care licensing standards,
although federal law does not dictate what these standards should be or what types
of providers must be covered. In addition, states must have health and safety
requirements applicable to all providers receiving CCDBG subsidies that address
prevention and control of infectious diseases, building and physical premises safety,
and health and safety training for care givers. However, federal law does not dictate
the specific contents of these requirements.
The CCDBG is funded through both discretionary and capped entitlement grants
(referred to in combination as the Child Care and Development Fund, or CCDF), and
state maintenance-of-effort (MOE) and matching requirements apply to part of the
entitlement funds.² States must use at least 4% of their total funds to improve the
quality and availability of child care, and according to statute, must target 70% of
entitlement funds on welfare recipients working toward self-sufficiency or families
at risk of welfare dependency. However, because all families falling below the 85%
of state median income requirement can be categorized as “at risk,” the 70% targeting
of the welfare and at-risk population does not necessarily mean welfare families must
be served. In theory, all funds may be used for low-income, non-welfare, working
families. However, state plans indicate that many states guarantee child care to
welfare families. No more than 5% of state allotments may be used for state
administrative costs.
For FY2005, the Consolidated Appropriations Act (P.L. 108-447) provides $2.1
billion (minus an across-the-board rescission of 0.8%) in discretionary funding for
the Child Care and Development Block Grant. Mandatory (or “entitlement”)
CCDBG funding beginning in FY2003 has been provided at the FY2002 rate ($2.717
billion for the year), under a series of funding extensions. The eighth extension
(H.R. 5149) was approved by Congress and signed into law (P.L. 108-308) on
September 30, 2004. It provides funding (at the same FY2002 rate) through March

31, 2005.

Temporary Assistance for Needy Families (TANF). TANF, created in
the 1996 welfare reform law (P.L. 104-193), provides fixed block grants ($16.5 billion
annually through FY2002, and extended through March 31, 2005, by H.R. 5149/P.L.
108-308) for state-designed programs of time-limited and work-conditioned aid to needy
families with children. Child care is one of many services for which states may use
TANF funding. In FY2003, HHS reports that states spent $1.7 billion in federal
TANF funds for child care within the TANF program, and $1.77 billion in state
TANF and separate state program (SSP) MOE funds. (Of that $1.77 billion in state
spending, approximately $905 million could be “double counted” as state spending

² For more detailed information on the CCDF financing structure and spending trends, see
CRS Report RL31274, Child Care: Funding and Spending under Federal Block Grants, by
Melinda Gish.

toward the CCDF MOE requirement.) In addition, states may transfer up to 30% of
their TANF allotments to the CCDBG (CCDF), to be spent according to the rules of
that program (as opposed to TANF rules). The transfer from the FY2003 TANF
allotment to the CCDBG totaled almost $1.9 billion (representing 11% of the
FY2003 TANF allotment).³
Child and Adult Care Food Program (CACFP). The CACFP provides
federal funds (in some cases commodities) for meals and snacks served in licensed
child care centers, family and group day care homes, and Head Start centers. Child
care providers that are exempt from state licensing requirements must comply with
alternative state or federal standards. Children under 12, migrant children under 15,
and children with disabilities of any age may participate, although most are
preschoolers. Eligible providers are usually public and private nonprofit
organizations. The CACFP is an open-ended entitlement, administered by the
Department of Agriculture. For FY2005, obligations are estimated to be $2.1
billion.⁴
Social Services Block Grant (SSBG). Title XX of the Social Security Act
authorizes Social Services Block Grants, which may be used for social services at the
states’ discretion. There are no federal income eligibility requirements, targeting
provisions, service mandates, or matching requirements. An HHS analysis of state
expenditures indicates that almost 8% of total SSBG expenditures made in FY2002
($205 million) were for child care in that year, almost equal to those made for child
care in FY2001 ($201 million). Title XX is a capped entitlement, and state
allocations are based on relative population size. It should be noted that although the
SSBG has an entitlement ceiling, appropriations may not always abide by it. For
example, the ceiling in FY2001 was $1.7 billion; however, Congress appropriated
$1.725 billion for that year, despite the ceiling. The Consolidated Appropriations
Act, 2005 (P.L. 108-447) provides $1.7 billion for the SSBG and maintains states’
authority to transfer up to 10% of their TANF block grants to the SSBG. (Note: the
SSBG is not a discretionary program, and thus is not affected by the across-the-board⁵
rescission.)
Head Start. Head Start provides comprehensive early childhood education
and development services to low-income preschool children, typically (but not
always) on a part-time basis. The Head Start Act has been due to be reauthorized
since the end of FY2003; however, the Act was not reauthorized during the 108^th
Congress. Funding has nevertheless been provided through the appropriations
process. Under current law, Head Start funds are provided directly by HHS to local
grantees, which must comply with detailed federal performance standards. However,
in its FY2004 budget request, the Administration proposed to give states the

³ For more information on use of TANF funding for child care, see CRS Report RL31274,
Child Care: Funding and Spending under Federal Block Grants, by Melinda Gish.
⁴ See CRS Report RL31577, Child Nutrition and WIC Programs: Background and Funding,
by Joe Richardson.
⁵ See CRS Report 94-953, Social Services Block Grant (Title XX of the Social Security Act),
by Melinda Gish.

opportunity to administer Head Start, provided they demonstrate how Head Start will
be coordinated with other preschool programs and services to emphasize developing
skills and behaviors including language development; pre-reading skills; numeracy;
and social and emotional competence, while meeting state-established accountability
standards. This proposal proved controversial in both the House and Senate, and
reauthorization legislation proposed by the House included a more limited version
of it. There was no sign of the provision in the Senate’s committee reported bill. The
Head Start reauthorization bill passed by the House (H.R. 2210) on July 25, 2003,
would have restricted the state demonstration option to a maximum of eight states,
whereas the Senate HELP Committee-reported bill (S. 1940), proposed no state
demonstration option.⁶ Similarly, the President’s FY2004 budget proposal to fully
transfer authority over the Head Start program from HHS to the Department of
Education by FY2005 was not championed in either the House or Senate legislation
proposed during the 108^th Congress.
The most recent available data show funded enrollment for Head Start in
FY2003 to have totaled 909,608 children (of whom almost 73,000 were under age
three, participating in Early Head Start). The Consolidated Appropriations Act, 2005
(P.L. 108-447) provides $6.899 billion for Head Start, of which $1.4 billion becomes
available in FY2006. (Note: The $6.899 billion does not reflect the across-the-board

0.8% offset, to which Head Start is subject.)

21^st Century Community Learning Centers (21^st CCLC). The 21^st

Century Community Learning Centers program is administered by the Department
of Education and is authorized under the Elementary and Secondary Education Act
(ESEA), as amended in 2002 by the No Child Left Behind Act (P.L. 107-110).⁷^st
Funding for the 21 CCLC program is provided to states under a formula grant, based
on states’ shares of Title I, Part A funds. States then use their allocations to make
competitive awards to local educational agencies, community-based organizations,
or consortia of public or private agencies that primarily serve students who attend
schools with concentrations of poor students or low-performing schools. The focus
of the program is to provide after-school academic enrichment opportunities for
children in these communities. The appropriation provided by the Consolidated
Appropriations Act, 2005 (P.L. 108-447) is $991 billion. (This amount does reflect
the 0.8% rescission — as provided by tables released by the Department of Education
on December 9, 2004.)
Even Start. The Department of Education administers the Even Start program,
which provides grants for family literacy projects that include early childhood
education.⁸ The appropriations for FY2005 is $225 million (which reflects the 0.8%
offset).

⁶ For more information, see CRS Report RL30952, Head Start Issues in the 108^th Congress,
by Melinda Gish.
⁷ For more information, see CRS Report RL31240, 21^st Century Community Learning
Centers in P.L. 107-110: Background and Funding, by Gail McCallion.
⁸ For more information, see CRS Report RL30448, Even Start Family Literacy Programs:
Background and Reauthorization Issues, by Gail McCallion.

Individuals with Disabilities Education Act (IDEA) Programs. The
Individuals with Disabilities Education Act (IDEA) authorizes an early intervention
program for infants and toddlers with disabilities and their families, and preschool
grants for children with disabilities.⁹ IDEA was reauthorized during the 108^th
Congress. FY2005 appropriations for the IDEA infants and toddlers program are
$441 million, and the funding level for the preschool grants program is $385 million
(both amounts reflect the 0.8% offset).
Early Learning Fund/Early Learning Opportunities Act Program.
This HHS program (referred to by both names), authorized by the FY2001
Consolidated Appropriations Act (P.L. 106-554), provides grants to communities to
enhance school readiness for children under five, specifically by funding efforts to
improve the cognitive, physical, social, and emotional development of these children.
Although authorized at $600 million, FY2002 funding for the program was set at $25
million; FY2003 funding was set at $34 million (despite the President’s FY2003
budget proposal to eliminate the program) and for FY2004, P.L. 108-199 included
$34 million for the Early Learning Fund. The FY2005 appropriation (prior to the

0.8% rescission) is $36 million.

Early Reading First. The Early Reading First program, authorized by the
Elementary and Secondary Education Act of 1965 (as amended), supports local
efforts to enhance the school readiness of young children — particularly those from
low-income families — through scientific research-based strategies and professional
development that are designed to enhance the verbal skills, phonological awareness,
letter knowledge, and pre-reading skills of preschool age children.¹⁰ The program
provides competitive grants to eligible local educational agencies (LEAs) and to
public or private organizations or agencies that are located in eligible LEAs. The
Department of Education may award grants for up to six years. For FY2005, this
program is funded at $104 million (0.8% offset included).
Early Childhood Educator Professional Development. The
Department of Education provides competitive grants to partnerships to improve the
knowledge and skills of early childhood educators who work in communities that
have high concentrations of children living in poverty. For FY2005, $15 million is
appropriated for these grants.
Loan Forgiveness for Child Care Providers. Authorized under the
Higher Education Act amendments of 1998, the loan forgiveness for child care
providers program aimed to retain and encourage more highly trained individuals to
enter into the early child care profession. “Early child care” covered activities and
services provided for the education and care of children from birth through age five.
Under this program, borrowers who had earned a degree in early childhood
education, and worked for two full years as a child care provider in a low-income
community, could have had a portion of their federal program loan obligations

⁹ For more information, see CRS Report RL31273, Individuals with Disabilities Education
Act (IDEA): Early Childhood Programs (Section 619 and Part C), by Richard Apling.
¹⁰ For more information, see CRS Report RL31241, Reading First and Early Reading First:
Background and Funding, by Gail McCallion.

forgiven. FY2001 marked the first year that this program was funded, at $1 million
— the same amount appropriated for FY2002 and FY2003. This program was not
funded for FY2004 or FY2005.
Child Care Access Means Parents in School (CAMPIS). Authorized
under the Higher Education Act amendments of 1998, and first funded for FY1999
at $5 million, the CAMPIS program is designed to support the participation of low-
income parents in post-secondary education through campus-based child care
services. Discretionary grants of up to four years in duration are awarded
competitively to institutions of higher education, to either supplement existing child
care services, or to start a new program. Funding for FY2005, as included in the
Consolidated Appropriations Act, is $16 million.
Dependent Care Tax Credit (DCTC). The DCTC is a non-refundable tax
credit for employment-related expenses incurred for the care of a dependent child
under 13 or a disabled dependent or spouse, under Section 21 of the tax code.¹¹
Beginning in tax year 2003, the Economic Growth and Tax Relief Reconciliation Act
of 2001 (P.L. 107-16) increases the maximum credit rate to 35% of expenses up to
$3,000 for one child (for a credit of $1,050), and up to $6,000 for two or more
children (for a credit of $2,100). The 35% rate will apply to taxpayers with adjusted
gross incomes of $15,000 or less. The rate will decrease by 1% for each additional
$2,000 increment (or portion thereof) in income until the rate reaches 20% for
taxpayers with incomes over $43,000. The current estimated revenue loss for 2004
is $3.1 billion, and $2.6 billion for 2005 as determined by the Joint Committee on
Taxation (JCT).
Dependent Care Assistance Program (DCAP). Under Section 129 of the
tax code, payments made by a taxpayer’s employer for dependent care assistance may
be excluded from the employee’s income and, therefore, not be subject to federal¹²
income tax or employment taxes. The maximum exclusion is $5,000. Section 125
of the tax code allows employers to include dependent care assistance, along with
other fringe benefits, in nontaxable flexible benefit or “cafeteria” plans. The
estimated revenue loss associated with this income exclusion is $800 million in 2004
and $900 billion for 2005.

¹¹ For more information, see CRS Report RS21466, Dependent Care: Current Tax Benefits
and Legislative Issues, by Christine Scott.
¹² Ibid.

Table 1. Funding for Federal Child Care and Related Programs,
FY2001-FY2005
($ in millions)
^Program^(Fed^eral^A^d^mⁱⁿ^.^A^g^en^cy)²⁰⁰¹²⁰⁰²²⁰⁰³²⁰⁰⁴²⁰⁰⁵
^CCDB^{G -}^d^iscr^etioⁿ^a^r^y^p^o^r^tioⁿ^a^(H^H^S⁾^$2,000^$2,100^$2,086ⁱ^$2,087^l^$2,100^m
^CCDB^{G -}^eⁿ^titlem^eⁿ^t^p^o^r^tioⁿ⁽^HHS)²^,5⁶⁷²^,⁷¹⁷²^,⁷¹⁷^c^2,717^c^2,717^c
^TA^N^F^b^(HHS)^b^bbbb
^C^hⁱ^l^d^an^{d A}^d^u^l^t^C^a^{re F}^{ood (U}^S^D^A⁾^1,742^d^1,831^d^1,926^d^2,013^d^2,059^d
^{Social Serv}^ices^B^l^ock^Gran^ts^d^(HHS)¹^,7²⁵^e^1,700^e^1,700^e^1,700^e^1,700^e
^{Head Start (HHS)}⁶^,200^f^6,538^f^6,667^g^6,775^f,^l^6,899^f,^l
²¹^st^Ce^nt^ur^y^Co^m^m^uni^t^y^Le^a^rⁿⁱ^ngⁱ^l^m
^C^eⁿ^t^ers^(ED⁾⁸⁴⁶^1,000⁹⁹⁴⁹⁹⁹⁹⁹¹
^Ev^en^S^t^art^(ED⁾²⁵⁰²⁵⁰²⁴⁸ⁱ²⁴⁷^l²²⁵^m
^I^D^EA^Iⁿ^f^aⁿ^t^{s an}^d^Fam^{ilies (}^E^D)³⁸⁴⁴¹⁷⁴³⁴ⁱ⁴⁴⁴^l⁴⁴¹^m
^ID^EA^Pres^ch^ool^G^r^an^t^s^(ED⁾³⁹⁰³⁹⁰³⁸⁷ⁱ³⁸⁸^l³⁸⁵^m
^E^a^r^l^y^Le^a^rⁿⁱ^{ng Fund}^/^E^L^O^A⁽^H^H^S⁾²⁰²⁵³⁴ⁱ³⁴^l³⁶^m
^E^a^r^l^y^Re^a^dⁱ^{ng Fi}^r^s^t⁽^E^D⁾^n/^a⁷⁵⁷⁵ⁱ⁹⁴^l¹⁰⁴^m
^Earl^y^C^hⁱ^l^d^h^{ood Edu}^cat^{or Prof}^{. D}^e^v^e^l^op.ⁱ^l^m
^(ED⁾¹⁰¹⁵¹⁵¹⁵¹⁵
^L^o^an^f^o^rg^iv^en^es^s^f^o^{r ch}^{ild care prov}^idersⁱ
^(ED)¹¹¹⁰⁰
^C^h^{ild care A}^cces^s^Mean^s^P^a^ren^t^sⁱⁿ^jⁱ^l^m
^S^c^h^ool^(ED⁾²⁵²²¹⁶¹⁶¹⁶
^Depen^d^en^{t C}^a^{re T}^a^x^C^r^{edit (T}^reas^u^r^y⁾^2,500^h^2,500^h^3,200^k^3,100^k^2,600^k
^Depen^d^en^{t C}^a^{re A}^s^sⁱ^s^t^an^{ce P}^r^og^ram⁵⁰⁰^h⁶⁰⁰^h⁸⁰⁰^h⁸⁰⁰^h⁹⁰⁰^h
^(T^reas^u^r^y⁾
^So^urce^{: T}^a^{ble prepared by}^th^{e C}^oⁿ^g^r^es^sⁱ^on^{al R}^e^s^earch^Serv^{ice (C}^R^S^).
^{a. T}^h^{e C}^C^D^B^G^dis^c^retion^a^ry^am^ouⁿ^t^s^s^h^owⁿⁱⁿ^each^colu^mⁿ^ref^l^{ect th}^e^{appropriated f}^uⁿ^dⁱⁿ^g^{to be}
^m^a^{de av}^{ailable f}^o^{r th}^{at g}ⁱ^v^eⁿ^y^{ear, tak}ⁱⁿ^g^th^{e adv}^aⁿ^{ce f}^uⁿ^dⁱⁿ^gⁱⁿ^{to accou}ⁿ^t^.
^b^.^TA^N^F^f^uⁿ^d^s⁽^$16.⁵^b^illio^{n a}^nnua^lly⁾^m^a^y^b^e^use^d^fo^r^c^h^ild^c^a^r^e^,^b^u^{t a}^r^e^no^{t sp}^e^cⁱ^fic^a^lly
^ap^p^r^o^p^r^iated^{as su}^ch^{. HHS rep}^o^r^{ts th}^{at m}^o^{st recen}^tly^states^sp^en^t^$¹^.⁷^b^illioⁿⁱⁿ^f^e^d^e^{ral T}^A^NF
^f^uⁿ^d^s^f^o^{r ch}ⁱ^l^d^{care w}ⁱ^t^hⁱⁿ^t^h^{e T}^A^N^F^prog^ramⁱⁿ^F^Y^2003.^A^l^s^o^,^t^h^e^F^Y²⁰⁰³^t^r^an^s^f^er^f^r^om^t^h^e
^{FY2003 T}^A^NF^allotm^en^{t to th}^{e C}^C^DB^{G totaled $1.9 billion}^(repres^en^tin^g^{11% of}^th^e^T^A^NF
^allo^tm^en^t)^.
^c.^F^uⁿ^dⁱⁿ^g^f^o^r^T^A^N^F^an^d^t^h^e^m^aⁿ^d^at^ory^portⁱ^oⁿ^of^C^C^D^BG^f^uⁿ^dⁱⁿ^g^f^o^{r F}^Y^{2003 w}^a^s^provⁱ^d^ed^(at
^t^h^{e F}^Y^{2002 rat}^e^s⁾^t^h^ro^{ugh a}^se^rⁱ^e^s^o^f^t^e^m^p^o^r^a^r^y^e^x^t^e^nsi^o^ns.^Fo^r^FY^{2004, f}^uⁿ^dⁱⁿ^g^w^a^s^al^s^o
^provⁱ^d^{ed v}ⁱ^{a ex}^t^eⁿ^sⁱ^oⁿ^s^(P.L^{. 108-}^{262 carri}^{ed f}^uⁿ^dⁱⁿ^g^t^h^ro^{ugh Se}^p^t^.³⁰^,^{2004). F}^o^{r F}^Y^2005,
^P.L^.^108-^{308 ex}^t^eⁿ^d^s^f^uⁿ^dⁱⁿ^g^at^t^hⁱ^s^s^a^m^e^rat^e^t^h^ro^{ugh M}^a^r^c^{h 3}¹^,^2005.
^d^.^Estim^ated^o^b^lig^atioⁿ^s^{, Dep}^a^r^t^m^eⁿ^t^o^f^A^g^rⁱ^cu^ltu^r^e^.
^{e. T}^o^{tal SSB}^{G appropriation}^am^ouⁿ^t^s^h^owⁿ^.^In^{FY2002 (m}^os^{t recen}^{t data}^av^ailable),^$205^m^illion
ⁱⁿ^SSB^{G ex}^pen^d^itu^res^w^e^{re f}^o^{r ch}^{ild care.}
^f^.^In^each^o^f^th^{ese y}^{ears, $}¹^.⁴^b^illioⁿ^w^a^{s ad}^v^aⁿ^{ce ap}^p^r^o^p^r^iated^f^o^{r th}^{e f}^o^llo^wⁱⁿ^g^y^ear.
^g^.^Of^th^{e $6.668 billion}^,^{$5.268 billion}^w^a^s^av^aila^{ble f}^o^{r FY2003, an}^{d $1.4 billion}^w^a^s^av^{ailable in}
^{FY2004. T}^h^{e $5.268 b}^illion^w^a^s^ex^em^{pt f}^r^om^res^c^is^sⁱ^on^s^(or^“^o^f^f^s^ets^”⁾ⁱⁿ^clu^d^edⁱⁿ^P^.^L^.^108-^7.

^How^e^v^e^r^,^t^h^{e adv}^aⁿ^{ce appropriation}^of^{$1.4 b}^illion^f^o^{r FY2004, in}^clu^d^{ed in}^P^.^L^.^108-^{7 w}^a^s
^s^u^bj^ect^t^o^t^h^{e 0.59%}^res^cⁱ^s^sⁱ^onⁱⁿ^cl^u^d^{ed i}ⁿ^t^h^{e F}^Y^{2004 appropri}^a^tⁱ^oⁿ^s^l^a^w^(P.L^{. 108-}^199).
^h^.^Estim^ated^r^e^v^eⁿ^u^e^lo^{ss, J}^oⁱⁿ^{t Co}^m^m^{ittee o}ⁿ^T^a^x^a^tioⁿ^.
ⁱ^.^A^m^ouⁿ^t^ref^l^ect^s^res^cⁱ^s^sⁱ^onⁱⁿ^cl^u^d^{ed i}ⁿ^P.L^.^108-^7.
^j^.^T^h^{is am}^o^uⁿ^t^ex^clu^d^es^$³^m^illioⁿⁱⁿ^uⁿ^o^b^lig^ated^f^uⁿ^d^{s tr}^an^sf^er^r^e^d^to^th^{e P}^r^o^g^r^a^m^A^d^mⁱⁿⁱ^str^a^tioⁿ
^acco^uⁿ^t^to^h^e^lp^o^f^f^s^et^a^$³^.⁷^m^illioⁿ^rescissioⁿⁱⁿ^ad^mⁱⁿⁱ^strativ^{e an}^d^related^ex^p^eⁿ^s^{es p}^u^rsu^aⁿ^t
^t^o^s^ectⁱ^oⁿ^{803 of}^t^h^{e F}^Y^{2002 S}^u^ppl^em^en^t^a^l^A^ppropri^a^tⁱ^oⁿ^s^A^c^t^.
^k^.^Estim^ated^r^e^v^eⁿ^u^e^lo^{ss, J}^oⁱⁿ^{t Co}^m^m^{ittee o}ⁿ^T^a^x^a^tⁱ^oⁿ^.^No^te^:^T^h^{e Econ}^omⁱ^c^G^r^ow^t^h^an^{d T}^a^x
^R^e^lⁱ^e^f^R^e^c^oⁿ^c^iliation^A^c^{t of}^{2001 (EGT}^R^R^A^{) rais}^{ed th}^{e lim}^{it on}^ex^pen^s^es^allow^e^{d f}^o^{r th}^e
^credi^t^,^begⁱⁿⁿⁱⁿ^gⁱⁿ^t^a^x^y^{ear 2003.}
^l^.^T^h^es^{e di}^s^c^retⁱ^oⁿ^a^ry^prog^ram^s^w^e^{re s}^u^bj^ect^t^o^an^acros^s^-^t^h^e-^{board res}^cⁱ^s^sⁱ^on^of^0.59%ⁱⁿ^cl^u^d^edⁱⁿ
^P.L^.^108-^{199. F}^o^{r t}^h^{e l}^a^rg^{er prog}^ram^s^{, t}^h^{e l}ⁱ^s^t^e^{d am}^ouⁿ^t^ref^l^ect^s^t^h^{e res}^cⁱ^s^sⁱ^on^,^w^h^ereas^f^o^{r t}^h^e
^s^m^{aller prog}^ram^s^{, th}^{e u}^s^{e of}^rouⁿ^dⁱⁿ^gⁱⁿ^th^{e table m}^a^s^k^s^th^{e decreas}^eⁱⁿ^th^{e actu}^a^l
^appropri^a^tⁱ^oⁿ^.
^m^.^T^h^es^{e di}^s^c^retⁱ^oⁿ^a^ry^prog^ram^s^{are s}^u^bj^ect^t^o^aⁿ^a^c^r^o^s^s^-^t^h^e-^{board res}^cⁱ^s^sⁱ^on^of^0.8%ⁱⁿ^cl^u^d^{ed i}ⁿ
^P.L^.^108-^{447. T}^h^{e D}^e^part^m^eⁿ^t^of^Edu^catⁱ^oⁿ^h^a^s^rel^eas^{ed t}^a^bl^es^wⁱ^t^h^of^f^s^et^am^ouⁿ^t^s^,^an^d^t^h^os^e
^a^m^o^unt^{s a}^r^e^r^e^fl^e^c^t^e^d^he^r^e^.^H^H^S^,^ho^w^e^ve^r^,^ha^{s no}^t^p^r^o^vⁱ^d^e^dⁱⁿ^f^o^r^m^a^tⁱ^oⁿ^r^e^ga^r^dⁱ^{ng ho}^w^t^h^e
^of^f^s^et^af^f^ect^sⁱ^t^s^prog^ram^s^{, an}^{d t}^h^eref^{ore t}^h^e^H^H^S^appropri^a^tⁱ^oⁿⁿ^u^m^bers^s^h^owⁿ^{do n}^o^t^ref^l^ect
^the^r^e^sc^issioⁿ^.
ⁿ^/^a:ⁿ^o^t^applⁱ^cabl^e^{, prog}^ramⁿ^o^t^au^t^h^ori^{zed pri}^o^{r t}^o^F^Y^2002.
FY2003 Appropriations
For FY2003, Congress did not pass an individual bill making appropriations for
the Departments of Labor, HHS, and Education. Instead, with 11 of 13
appropriations bills yet to be completed at the close of the 2002 fiscal year
(September 30, 2002), followed by the end of the calendar year and Congressional^th
session, the new 108 Congress undertook the task of passing an omnibus
appropriations bill. They ultimately passed a consolidated resolution (H.J.Res.
2/H.Rept.108-10), and it was signed into law (P.L. 108-7) by the President on
February 20, 2003. Funding for the Departments of Labor, HHS, and Education was
included in Division G of the law, and those levels are reflected in the FY2003
column of Table 1.
Readers should be aware that the Consolidated Appropriations Resolution, 2003
(P.L. 108-7), included provisions (Division N, Title VI) to cut a percentage (0.65%)
of discretionary funding provided in specified Divisions (A-K), as an offset to
increased spending in the law. The FY2003 amounts shown in Table 1 reflect the
“across-the-board” cut, however, in some cases the rescinded portion is small enough
to not affect the rounded total. Of the programs addressed in this report, only Head
Start received discretionary funding from this act that was specifically exempted
from the percentage reduction.¹³
In the period between the beginning of FY2003 and enactment of P.L. 108-7,
funding for programs lacking FY2003 appropriations measures was extended on a
temporary basis via a series of continuing resolutions (CRs). A total of nine CRs
were signed into law (the final being H.J.Res. 18/P.L. 108-5) before the Consolidated
Appropriations Resolution, 2003 (H.J.Res. 2) was enacted (P.L. 108-7).

¹³ The provision to exempt Head Start from any across-the-board rescission was proposed
by Sen. Dodd as an amendment to H.J.Res. 2, and was accepted by the Senate.

FY2004: Comparing President Bush’s Budget Proposals to
the Final Appropriation Levels
President Bush released his Administration’s proposed budget for FY2004 on
February 3, 2003. A final appropriations bill was not signed into law (P.L. 108-199)
until January, 23, 2004, following a series of continuing resolutions. The omnibus
bill consolidated appropriations for multiple agencies, including the Departments of
HHS and Education, both of which administer child care-related programs. The
following is a summary of child care-related funding and initiatives proposed in the
FY2004 budget documents, and how those compared to enacted funding levels.
Table 2 shows how the funding requested by the President for FY2004 compared to
House and Senate proposals, and ultimately, to the levels signed into law (P.L. 108-

199).

CCDBG. The Administration’s FY2004 budget included a request for the same
rounded levels of CCDBG discretionary and mandatory (“entitlement”) funding as
were appropriated for FY2003 (and FY2002): $2.1 billion in discretionary funding,
and $2.717 billion in mandatory funding. Likewise, the budget request proposed that
the same set-asides be reserved from the discretionary funding total: $19 million for
child care resource and referral (of which $1 million would be dedicated for the Child
Care Aware hotline); $273 million for quality child care activities (of which $100
million would be dedicated to improving infant and toddler care); and $10 million
for child care research and evaluation.
The FY2004 appropriations law included the President’s requested level of
funding for the discretionary portion of the CCDBG, minus an across-the-board
rescission of 0.59% that applied to many discretionary programs in the bill. The
rounded figure remained $2.1 billion for FY2004, and that amount encompasses all
the set-asides requested by the President. (The mandatory portion of CCDBG
funding is not appropriated as part of the appropriations bill process; however, such
funding was provided for FY2004 at the same rate as in FY2003 through a series of
extensions, the final of FY2004 being P.L. 108-262.)
Social Services Block Grant. The President’s FY2004 budget proposed to
continue funding the SSBG at its authorized level of $1.7 billion. The
Administration also proposed to maintain states’ authority to transfer up to 10% of
their TANF allotments to the SSBG if they so chose.
The FY2004 appropriations law provided the same level of funding for the
SSBG as was appropriated in FY2003, and as was requested by the President. The
transfer authority of 10% was also maintained.
Head Start. The Administration’s FY2004 budget request included a funding
increase for Head Start of $148 million, which would have taken its total to $6.816
billion (of which $1.4 billion would be advance appropriated for FY2005). The
budget request also included background information and proposals that were
expected to be addressed as part of the program’s anticipated reauthorization in 2004.

According to the FY2004 budget request, the Administration expected that in
FY2004 almost 923,000 children would receive Head Start services, including
62,000 in Early Head Start. The Administration contended that the increased
funding, coupled with the President’s proposal to allow states to administer Head
Start in coordination with other preschool programs, would enable the program to
maintain current service levels and increase enrollment by up to 10,500 children.
(FY2004 program data are not yet available.) The FY2004 budget explained that “in
order to improve coordination between Head Start and other federal, state, and local
programs affecting pre-school children, the President plans to move responsibility for
managing the Head Start program from the Department of Health and Human
Services to the Department of Education.”¹⁴ It proposed that this transition begin in
2004, with the Department of Education assuming full responsibility for the program
in 2005.
The Administration’s transfer proposal was not included in any legislative
proposals introduced during the 108^th Congress, however, the House reauthorization
bill (H.R. 2210) would have allowed state administration for up to a maximum of
eight states. The bill reported from the Senate HELP Committee, S. 1940, contained
no such provision to allow state administration of Head Start.
The FY2004 consolidated appropriations law included $6.816 billion, minus an
across-the-board rescission of 0.59%, which reduced the Head Start funding total to
approximately $6.775 billion.
21^st Century Community Learning Centers. The Administration
requested $600 million for 21^st CCLC, a decrease of $394 million from the FY2003
level. In the explanation of the request for less funding, the budget justification cited
“disappointing initial findings from a rigorous evaluation of the centers funded in the
program’s first three years” (1999-2001).
Despite the President’s initial request, Congress proposed (and the President
approved) funding the 21^st CCLC program at a level of $1 billion. With the across-
the-board rescission taken into account, the appropriation for FY2004 was $999
million.
Even Start. The Administration requested $175 million for Even Start in
FY2004, which marked a decrease of $73 million from the FY2003 funding level.
The Department of Education’s budget justifications cited the results from national
evaluations of Even Start as support for decreasing the program’s funding level.
Furthermore, Even Start was among programs rated as “ineffective” by the Office of
Management and Budget’s new “Program Assessment Rating Tool” (PART).
According to the Administration, the PART identified several weaknesses in Even
Start, including lack of numerical targets to demonstrate progress toward short-term
and long-term goals, and also cited findings from the aforementioned national
evaluations.

¹⁴ See Fiscal Year 2004 Budget of the U.S. Government: Analytical Perspectives, p. 251.

The FY2004 appropriations law funded Even Start at a level of $248 million,
less the rescission, reducing it to $247 million, still more than the President’s
requested amount.
IDEA Grants for Infants and Families. The Administration requested
$447 million for the IDEA grants for infants and families in FY2004, which reflected
an increase of almost $13 million above the FY2003 funding level. The
Administration asserted that the proposed funding level would help states in meeting
rising costs associated with implementing statewide systems, expanding child-find
activities, serving larger numbers of children, increasing the focus on providing
services in natural environments, and improving transition services for children with
disabilities and their families.
The FY2004 appropriation was slightly below the President’s request, as the
across-the-board rescission reduced the funding level to $444 million.
IDEA Preschool Grants. The Administration requested $390 million for the
IDEA preschool grants in FY2004 — the same rounded level as appropriated in
FY2003 prior to the rescission, which decreased funding by about $2.5 million. In
2002, the preschool grant program served 617,394 children aged three through five
years, and the Department of Education predicts that the number of children served
will increase by 2.5% from 2003 to 2004.
As with the IDEA grants for infants and families, the FY2004 appropriations
law funded the IDEA preschool grants at the level requested by the President — less
the 0.59% rescission — which brought it to a level of $388 million.
Early Learning Fund/Early Learning Opportunities Act Program.
The Administration requested no funds in its FY2004 budget for this program.
Instead, the President proposed to fund similar activities through the Early Reading
First program and the Early Childhood Education Professional Development Grant.
Although the House followed the President’s lead in proposing to eliminate the
Early Learning Opportunities Act program, the Senate favored funding it, and
ultimately, the FY2004 appropriations law included $34 million for this program.
Early Childhood Educator Professional Development. The
Administration requested $15 million for supporting Early Childhood Educator
Professional Development in FY2004, the same level provided in FY2003, prior to
the $98,000 rescission. According to budget justifications, the request would support
a new round of grants for use in helping local communities (especially those with
high concentrations of young children in poverty) to improve the knowledge and
skills of early childhood educators and care givers.
The FY2004 appropriations law included $25 million for Early Childhood
Educator Professional Development, as requested by the President in his FY2004
budget.
Early Reading First. The Administration requested $100 million for the
Early Reading First program in FY2004, an increase of $25 million over the FY2003

funding level. The proposed increase would support efforts in additional low-income
communities to develop model programs for fostering the school readiness of young
children. As mentioned above, the Administration proposed to eliminate the Early
Learning Opportunities Act program (also known as the Early Learning Fund) to fund
similar programs through the Early Reading First program and the Early Childhood
Education Professional Development Grant (see above).
The Early Reading First program received an increase in funding under the
FY2004 appropriations law, but not as much as was requested by the President. The
law included $94 million for this program in FY2004.
Child Care Access Means Parents in School (CAMPIS). The
Administration requested $15 million in FY2004 for CAMPIS. This marks a
decrease of slightly over $1 million from the FY2003 appropriation level. The
Administration stated that the FY2004 funds would be used for the continuation of
grants first funded in FY2001 and FY2002. No funds were requested for new grant
awards.
The FY2004 appropriations law maintained CAMPIS funding at a level of $16
million — $1 million more than was requested by the President.
Loan Forgiveness for Child Care Providers. The Administration
requested no funding for this program in FY2004, and none was appropriated.
According to the Department of Education’s budget justifications, “funding at the
current level [$994,000 in FY2003] is not cost-effective to administer and does not
support a broad enough pool of recipients from which representative data on the
effectiveness of loan forgiveness can be assessed.” The same document notes that
the elimination of funding would not affect existing recipients, because funds have
already been obligated to support them through the five-year forgiveness period.

Table 2. Comparison of FY2004 President’s Request and House
and Senate Proposals with Final FY2004 Appropriations
($ in millions)
^FY²⁰⁰⁴^FY²⁰⁰⁴
^House-^Seⁿ^a^te^-^FY^{2004 O}^mⁿⁱ^b^u^s
^FY²⁰⁰⁴^p^a^ssed^p^a^ssed^H^.^R^.²⁶⁷³^a
^P^resi^d^en^t’s^b^{ill H}^.^R.^versi^oⁿ⁽^H^.R^e^p^t^.^108-⁴⁰¹⁾
^Program^r^e^que^s^t²⁶⁶⁰^H^.^R^.²⁶⁶⁰^P.L^.^108-¹⁹⁹
^C^C^D^B^G^di^s^c^retⁱ^oⁿ^a^ry^{$ 2,100}^$2,100^$2,100^$2,087
^C^C^D^B^G^m^aⁿ^d^at^ory²^,717^—^-^b^{— -}^b^{— -}^b
^S^S^B^G¹^,700^1,700^1,700^1,700
^H^{ead S}^t^art⁶^,816^6,816^6,816^6,775
^21s^t^C^C^L^C⁶⁰⁰^1,000^1,000⁹⁹⁹
^Ev^en^S^t^art¹⁷⁵²⁵⁰¹⁷⁵²⁴⁷
^I^D^EAⁱⁿ^f^aⁿ^t^{s an}^d^f^a^m^ilies⁴⁴⁷⁴⁴⁷⁴⁴⁷⁴⁴⁴
^ID^EA^Pres^ch^ool³⁹⁰³⁹⁰³⁹⁰³⁸⁸
^E^a^r^l^y^Le^a^rⁿⁱ^{ng Fund}⁰⁰³⁸³⁴
^Earl^y^C^hⁱ^l^d^h^{ood Edu}^cat^or
^Prof^es^sⁱ^on^al^D^e^v^e^l^opm^en^t¹⁵¹⁵¹⁵¹⁵
^Earl^y^R^eadiⁿ^g^Fⁱ^rs^t¹⁰⁰¹⁰⁰⁸⁵⁹⁴
^C^h^{ild C}^a^{re A}^cces^s^Mean^s
^Paren^t^sⁱⁿ^S^c^h^ool^(C^A^M^PIS⁾¹⁵¹⁵¹⁶¹⁶
^L^o^an^Forg^iv^en^es^s^f^o^{r ch}^ild
^{care prov}^iders⁰⁰⁰⁰
^Source:^T^a^{ble prepared by}^th^{e C}^oⁿ^g^r^es^sⁱ^on^{al R}^e^s^earch^Serv^{ice (C}^R^S^).
^a.^T^h^{e om}ⁿⁱ^bu^s^appropri^a^tⁱ^oⁿ^s^l^a^wⁱⁿ^cl^u^d^{ed an}^acros^s^t^h^{e board res}^cⁱ^s^sⁱ^on^of^0.59%^t^h^at^applⁱ^e^s^t^o
^dⁱ^sc^r^e^tⁱ^o^na^r^y^p^r^o^g^r^a^m^s^lⁱ^s^t^e^d^he^r^e⁽^a^m^o^{ng o}^t^he^r^s⁾^.^T^h^e^D^e^p^a^r^t^m^e^nt^o^f^E^d^uc^a^tⁱ^o^{n ha}^{s r}^e^l^e^a^s^e^d
^tab^l^{es w}^ith^th^{e ap}^p^r^o^p^r^iatioⁿ^am^o^uⁿ^t^{s r}^e^f^l^ectin^g^th^{e r}^e^scissioⁿ^{, an}^d^th^at^is^r^e^f^l^ectedⁱⁿ^th^{e tab}^l^e,
^as^{are t}^h^{e am}^ouⁿ^t^sⁱⁿ^cl^u^d^{ed i}ⁿ^t^h^{e F}^Y^{2005 H}^H^S^bu^dg^et^j^u^s^tⁱ^fⁱ^catⁱ^oⁿ^s^{, w}^hⁱ^c^h^ref^l^ect^t^h^e
^r^e^scissioⁿ^.^P^l^{ease n}^o^{te, h}^o^w^e^v^e^r^,^th^{at in}^so^m^e^{cases th}^{e r}^e^scissioⁿ^am^o^uⁿ^t^{is n}^e^g^lig^ib^{le d}^u^e^to
^r^o^uⁿ^dⁱⁿ^g^u^s^edⁱⁿ^th^{is tab}^l^e.
^{b. T}^h^{e m}^aⁿ^d^at^ory^portⁱ^oⁿ^of^C^C^D^B^G^fundiⁿ^gⁱ^sⁿ^o^tⁱⁿ^cl^u^d^{ed i}ⁿ^t^h^{e L}^a^bor/^H^H^S^/^E^D^{or om}ⁿⁱ^bu^s
^ap^p^r^o^p^r^iatioⁿ^s^b^{ills. L}ⁱ^k^e^th^{e T}^A^{NF b}^l^o^c^k^g^r^an^{t, th}^e^m^aⁿ^d^ato^r^y^ch^ild^car^{e f}^uⁿ^dⁱⁿ^g^h^a^{s b}^een
^f^uⁿ^d^ed^vⁱ^{a ad}^d^itioⁿ^a^{l leg}ⁱ^slativ^{e actio}ⁿⁱⁿ^th^{e f}^o^r^m^o^f^t^e^m^p^o^r^a^r^y^ex^ten^s^ioⁿ^s^{. (}^F^uⁿ^dⁱⁿ^g^w^a^s
^p^r^o^vⁱ^d^e^d^t^h^r^o^{ugh Se}^p^t^.³⁰^,^{2004 v}ⁱ^{a P.L}^.^108-^262.)
The final column of Table 2 shows the final child care and related program
funding amounts included in the omnibus as passed into law. These were the levels
agreed to in conference (H.Rept. 108-401). Previously, the House passed its version
of a Labor/HHS/ED FY2004 appropriations bill (H.R. 2660) on July 10, 2003, and
Table 2 shows the amounts that were included in that bill for comparison. Likewise,
the table shows the amounts that were included in the amended version of H.R. 2660
as passed by the Senate on September 10, 2003. All amounts can be compared to the
President’s requested funding levels, shown in the first column of numbers.

President Bush’s FY2005 Budget Request
On February 2, 2004, President Bush released his budget request for FY2005.
For several programs, such as the CCDBG, SSBG, and 21stCCLC, the President
proposed to maintain funding at the same rounded level provided in FY2004. (In the
case of the CCDBG, the requested amount was $12 million more than the final
FY2004 appropriation including the rescission.) Two child care-related programs
were proposed to be eliminated: Even Start, and the Early Learning Opportunities
Act program (but both were ultimately funded in the FY2005 appropriations law —
P.L. 108-447). Instead of continuing to fund these two programs, the Administration
proposed to redirect funds to Reading First and Early Reading First, which they
contended were more successful literacy programs. The budget proposed to increase
funding for Early Reading First by $38 million.
The Administration also proposed to increase funding for Head Start — by $169
million. The President’s FY2005 budget requested $6.9 billion for Head Start,
estimating that it would help provide 919,000 children with Head Start services
(including 62,000 children in Early Head Start) in FY2005. Of the $6.9 billion, the
Administration proposed to use $45 million to fund nine state pilot projects to
coordinate state preschool programs, federal child care grants, and Head Start into
a comprehensive system of early childhood programs. This coordination was
proposed in keeping with the Administration’s goal of improving preschool
programs to help ensure school readiness.
The Administration’s budget documents also stated that in FY2005, Head Start
will contribute to the President’s Marriage and Healthy Family Development
Initiative by offering training for between 2,000 and 3,000 Head Start parents “in a
science-based curriculum designed to improve early language and literacy skill
out com es.”
Table 3 provides the Administration’s proposed funding levels for child care
and related programs for FY2005 compared to the level of funding received for
FY2004.

Table 3. Bush Administration’s FY2005 Funding Request
Compared to FY2004 Funding for Select Programs
($ in millions)
^Di^fferen^ce
^(+/-)
^b^e^tw^een
^P^resi^d^en^t’s
^FY²⁰⁰⁵
^r^e^que^s^t
^P^resi^d^en^{t’s req}^u^e^st^FY²⁰⁰⁴^aⁿ^d^FY²⁰⁰⁴^a
^Pr^o^g^r^a^m^FY²⁰⁰⁵^F^unding^F^undi^ng
^C^C^D^B^G^di^s^c^retⁱ^oⁿ^a^ry^$2,100^$2,087^+$12
^C^C^D^B^G^m^aⁿ^d^at^ory²^,717^2,717^s^a^m^e^l^e^v^e^l
^S^S^B^G¹^,700^1,700^s^a^m^e^l^e^v^e^l
^H^{ead S}^t^art⁶^,944^6,775^+$169
^21s^t^C^C^L^C⁹⁹⁹⁹⁹⁹^s^a^m^e^l^e^v^e^l
^Ev^en^S^t^art⁰²⁴⁷^-^$247
^I^D^EAⁱⁿ^f^aⁿ^t^{s an}^d^f^a^m^ilies⁴⁶⁷⁴⁴⁴^+$²³
^ID^EA^Pres^ch^ool³⁸⁸³⁸⁸^s^a^m^e^l^e^v^e^l
^E^a^r^l^y^Le^a^rⁿⁱ^{ng Fund}⁰³⁴^-^$³⁴
^Earl^y^C^hⁱ^l^d^h^{ood Edu}^cat^{or Prof}^es^sⁱ^on^al
^Dev^e^lopm^en^t¹⁵¹⁵^s^am^{e lev}^e^l
^Earl^y^R^eadiⁿ^g^Fⁱ^rs^t¹³²⁹⁴^+$38
^Child^Ca^r^e^A^c^c^e^{ss M}^e^aⁿ^{s P}^a^r^e^{nts in}
^S^c^h^ool^(C^A^M^PIS⁾¹⁶¹⁶^s^a^m^e^l^e^v^e^l
^Source:^T^a^{ble prepared by}^th^{e C}^oⁿ^g^r^es^sⁱ^on^{al R}^e^s^earch^Serv^ice
^{a. T}^h^{e om}ⁿⁱ^bu^s^appropri^a^tⁱ^oⁿ^s^l^a^w^(P.L^{. 108-}^{199) i}ⁿ^cl^u^d^{ed an}^acros^s^-^t^h^e-^{board res}^cⁱ^s^sⁱ^on^of^0.59%^.
^T^h^{e di}^f^f^e^ren^ces^s^h^owⁿⁱⁿ^t^hⁱ^s^col^u^mⁿ^w^e^{re cal}^cu^l^a^t^e^{d u}^sⁱⁿ^g^t^h^{e F}^Y^{2004 app}^r^opri^a^tⁱ^oⁿ^l^e^v^e^l^s
^lⁱ^s^t^e^{d i}ⁿ^t^h^{e H}^H^S^F^Y^{2005 bu}^dg^et^j^u^s^tⁱ^fⁱ^catⁱ^oⁿ^,^an^{d, i}ⁿ^t^h^{e cas}^{e of}^D^e^part^m^e^nt^o^f^E^d^u^catⁱ^oⁿ
^prog^ram^s^{, t}^h^{e t}^a^bl^es^rel^eas^{ed al}^on^g^sⁱ^d^{e t}^h^{e F}^Y^{2005 bu}^dg^et^requ^es^t^.^In^s^o^m^e^ca^se^s,^r^o^uⁿ^d^ed
^fi^gur^e^s^m^a^y^m^a^{sk sl}ⁱ^ght^c^h^a^nge^{s i}ⁿ^fundⁱ^ng.
FY2005 Appropriations
At the close of FY2004, Congress had yet to pass an appropriations bill for
FY2005, and as a result, a series of continuing resolutions (P.L. 108-309, P.L. 108-
416, and P.L. 108-434) extended funding for the federal government up through
December 8, 2004, when the Consolidated Appropriations Act 2005 (H.R. 4818) was
ultimately signed into law (P.L. 108-447). Funding for the Departments of Labor,
Health and Human Services, and Education — the departments responsible for
administering most of the child care and related programs described in this report —
is included in Division F of the law. The law does include an across-the-board offset
of 0.8% for most discretionary programs for which FY2005 funds have been
appropriated. Not all federal agencies have released revised appropriation numbers
reflecting how the rescission will be applied to programs under their purview. The
Department of Education, however, has published revised amounts, and this report
reflects that.

The final column of Table 4 shows the FY2005 appropriation levels included
in the final law. (Reminder: HHS has not yet released revised appropriation amounts
to reflect the offset.) Also shown in the table are the amounts that were proposed by
the President in his FY2005 budget, and the proposed funding levels passed by the
House and Senate Appropriations Committee, respectively.
Other than the proposed funding levels for Head Start and Even Start, the House
and Senate Committee-passed bills mirrored each other with respect to funding for
programs shown in the table. However, one difference between the House and
Senate Committee versions concerned the allowable transfer authority of TANF
funds to the SSBG. Under the House bill (H.R. 5006) the percentage of a state’s
TANF block grant that it may transfer to the SSBG would have been reduced from
10% to 4.5%, whereas the Senate’s committee-passed bill, and ultimately, the final
law, maintains the percentage at 10%.
Table 4. FY2005 Proposed and Enacted Funding Levels for
Select Programs
($ in millions)
^House-^Seⁿ^a^te^FY²⁰⁰⁵
^p^a^ssed^C^o^mmi^t^t^e^e^-^F^undi^ng
^P^resi^d^en^t’s^H^.^R^.⁵⁰⁰⁶^pas^s^e^d
^r^e^que^s^t^f^o^r^(fo^r^{S. 2810 (}^f^o^r^(P.L^.
^Pr^o^g^r^a^m^FY²⁰⁰⁵^FY²⁰⁰⁵⁾^FY²⁰⁰⁵⁾^108-447)
^C^C^D^B^G^di^s^c^retⁱ^oⁿ^a^ry^(H^H^S⁾^$2,100^$2,100^$2,100^2,100
^C^C^DB^{G m}^aⁿ^d^ato^r^y^(HHS)²^,7¹⁷^NA^a^NA^a^NA^a
^S^S^B^G^(H^H^S⁾¹^,700^1,700^1,700^1,700
^H^{ead S}^t^art^(H^H^S⁾⁶^,944^6,899^6,935^6,899
^21s^t^C^C^L^C^(ED⁾⁹⁹⁹⁹⁹⁹^1,007⁹⁹¹
^Ev^en^S^t^art^(ED⁾⁰²⁴⁷⁰²²⁵
^I^D^EAⁱⁿ^f^aⁿ^t^{s an}^d^f^a^m^{ilies (}^E^D)⁴⁶⁷⁴⁶⁷⁴⁴⁴⁴⁴¹
^ID^EA^Pres^ch^ool^(ED⁾³⁸⁸³⁸⁸³⁹⁰³⁸⁵
^E^a^r^l^y^Le^a^rⁿⁱ^{ng Fund}⁽^H^H^S⁾⁰⁰⁰³⁶
^Earl^y^C^hⁱ^l^d^h^{ood Edu}^cat^{or Prof}^es^sⁱ^on^al
^D^e^v^e^l^opm^en^t^(ED⁾¹⁵¹⁵¹⁵¹⁵
^Earl^y^R^eadiⁿ^g^Fⁱ^rs^t^(ED⁾¹³²¹³²¹¹⁰¹⁰⁴
^Child^Ca^r^e^A^c^c^e^{ss M}^e^aⁿ^{s P}^a^r^e^{nts in}
^S^c^h^ool^(C^A^M^PIS⁾^(ED⁾¹⁶¹⁶¹⁶¹⁶
^Source:^T^a^{ble prepared by}^th^{e C}^oⁿ^g^r^es^sⁱ^on^{al R}^e^s^earch^Serv^ice
^a.^T^h^e^m^aⁿ^d^ato^r^y^p^o^r^tioⁿ^o^f^CCDB^G^f^uⁿ^dⁱⁿ^g^{is n}^o^{t in}^clu^d^edⁱⁿ^th^{e L}^a^b^o^r^{/HHS/ED ap}^p^r^o^p^r^iatioⁿ^s
^b^{ills. L}ⁱ^k^e^th^e^T^A^N^F^b^l^o^c^k^g^r^an^{t, th}^{e m}^aⁿ^d^ato^r^y^ch^ild^car^{e f}^uⁿ^dⁱⁿ^g^h^a^{s b}^een^p^r^o^v^id^ed^vⁱ^a
^addition^a^{l leg}ⁱ^s^l^ativ^{e action}ⁱⁿ^th^{e f}^o^rm^of^tem^porary^ext^e^nsⁱ^oⁿ^s^{. For FY2005, a tem}^porary
^ex^t^eⁿ^sⁱ^oⁿ^(P.L^{. 108-}^{308) prov}ⁱ^d^es^f^uⁿ^dⁱⁿ^g^at^t^h^e^a^nnua^l^r^a^t^e^o^f^$²^.^{717 billion}^th^ro^{ugh M}^a^r^c^h
^{31, 2005.}

Administration’s Early Childhood Initiative
Proposals included in the FY2004 and FY2005 budgets and other efforts
underway during the 108^th Congress reflect the goals outlined in Good Start, Grow
Smart: The Bush Administration’s Early Childhood Initiative, first announced
by the President in April of 2002. Good Start, Grow Smart focuses on three overall
areas: 1) strengthening Head Start; 2) partnering with states to improve early
childhood education; and 3) providing information to teachers, care givers, and
parents. As mentioned above, the President’s FY2004 budget proposed to transfer
the Head Start program to the Department of Education, as well as to provide states
with the option to administer the program. The Head Start reauthorization bill passed
by the House (H.R. 2210) did not include the proposal to transfer the program to ED,
but did include provisions to allow a maximum of eight states to administer the
program (provided they meet designated requirements).
The Administration moved ahead with two additional efforts that are in keeping
with the Good Start, Grow Smart initiative, but that did not require legislative
changes to the Head Start Act. One is the Strategic Teacher Education Program, also
known as Project STEP, described by the Head Start Bureau as “a comprehensive,
multi-faceted, sequential professional development endeavor to ensure teachers use
research-based strategies to implement early and emergent literacy.” As part of this
development, during the summer and fall of 2002, 3,000 Head Start staff and 100
state child care administrators received 32 hours of training in strategies to support
children’s emerging literacy. Those who were trained are expected to serve as
“mentor coaches” for staff within their respective Head Start programs.
The second effort is the development and implementation of a national reporting
system that can be used to assess the effectiveness of Head Start programs in
achieving successful outcomes for children in terms of school readiness —
particularly the areas of literacy and number knowledge. This national reporting
system was implemented starting in the Fall of 2003, and assesses Head Start four-
and five-year olds twice a year on educational performance measures — using
indicators that were included in legislation as part of the 1998 reauthorization of
Head Start.
Legislative Activity in the 108^th Congress
Child Care and Welfare Reauthorization. Several bills pertaining
specifically to TANF and CCDBG reauthorization were introduced in the latter part
of the 107^th Congress, however, none were passed into law. Therefore, the^th
reauthorizations of both programs remained on the agenda in the 108 Congress.
Legislation to reauthorize the programs received attention, but never made it out of
both House and Senate. The House passed reauthorization bills for both
TANF/CCDBG (H.R. 4) and Head Start (H.R. 2210), whereas in the Senate,
comparable bills: H.R. 4 (TANF/mandatory child care funding), S. 880 (CCDBG),
and S. 1940 (Head Start) were reported out of committee, but did not clear the floor.
H.R. 4 (TANF/mandatory child care) was on the floor for consideration March 29-
April 1, and one amendment (Snowe) to increase mandatory child care funding was
passed (78-20); however, the Senate did not resume consideration of the bill during

the remainder of the 108^th Congress. Following are brief summaries of the child care
provisions included in bills that were introduced in the House and Senate.
S. 880, The Caring for Children Act of 2003 (Reported by Senate
HELP Committee, April 2, 2003). S. 880 was approved in committee with
bipartisan support. Title I of the bill would have amended and reauthorized the Child
Care and Development Block Grant (CCDBG). It included provisions that would
have authorized discretionary funding at $2.3 billion in FY2004, increasing by $200
million increments to a level of $3.1 billion in FY2008; increased the percentage of
funds that must be used for quality activities (newly specified in the proposal) from
4% to 6%; instructed states to use not less than 70% of funds remaining after quality
and administrative set-asides for direct services (as defined by states); added three
new goals to the act: 1) improving the quality of child care, 2) promoting school
preparedness through developmentally and age-appropriate activities in child care,
and 3) promoting parental and family involvement in the education of young children
in child care settings; eliminated the federal eligibility maximum limit of 85% of
state median income (SMI); required states to describe in their state plans how they
would coordinate with other early childhood programs such as Head Start, state pre-
kindergarten, and IDEA to expand accessibility to and continuity of care; required
states to conduct statistically valid market rate surveys within two years preceding
their state plans, and to set rates in accordance with the results (without reducing the
number of children served); expanded data collection requirements; and required
states beginning in FY2004 to submit a plan addressing the quality of child care
services provided. Title II of the bill contained provisions to enhance security at
child care centers in federal facilities, and Title III would have established a small
business child care grant program, through which competitive grants would be
awarded to states for establishment and operation of employer-operated child care
programs.
S. 1443, by Senator Carper (introduced July 22, 2003). The Building
on Welfare Success Act of 2003 (S. 1443) was a welfare reauthorization bill that
included an extension and increase in mandatory funding for the Child Care and
Development Fund (CCDF). The bill would have amended Sec. 418 of the Social
Security Act to provide an additional $6 billion above current funding levels over the
next five years. In FY2004, $3.467 billion would have been provided for the
mandatory portion of the CCDF, rising to $4.717 billion in FY2008.
H.R. 4, by Representative Pryce (introduced February 4, 2003,
passed the House February 13, 2003). The Personal Responsibility, Work,
and Family Promotion Act of 2003, H.R. 4, mirrored the welfare and child care¹⁵
reauthorization bill passed by the House last Congress, with respect to the bill’s
child care provisions. H.R. 4 would have set mandatory child care funding at $2.917
billion in each of FY2004-2008 (for an increase of $1 billion over five years above
current funding). The authorized level for the discretionary portion of Child Care
and Development Block Grant (CCDBG) funding would have been increased by

¹⁵ For more detailed information on previous legislative activity during the 107^th Congress,
see CRS Report RL30944, Child Care Issues in the 107^th Congress, by Melinda Gish.

$200 million annually beginning in FY2004 ($2.3 billion), reaching $3.1 billion in
FY2008.
This bill would also have increased the child care quality set-aside from 4% to
6%, and would have amended state child care plan requirements to encourage states
to improve the quality of child care available to families, and to promote school
readiness by encouraging the exposure of children in care to nurturing environments
and developmentally-appropriate activities. Likewise, the bill would have allowed
states to establish CCDBG income eligibility limits at any level (prioritized by need),
eliminating current law’s federal limit of 85% of state median income. Lastly, the
bill would have required that aggregated statistics on child care supply, demand, and
quality be included in biennial reports to Congress.
H.R. 4 (Senate Finance Committee Version) Personal Responsibility
and Individual Development for Everyone (Reported by Senate Finance
Committee, October 3, 2003). The Senate Finance Committee reported a
substitute version of welfare reauthorization bill H.R. 4, entitled PRIDE, on October
3, 2003. The legislation would have increased mandatory child care funding by $1
billion over five years above the current funding level of $2.717 billion a year. This
is the same level of child care funding proposed in the House-passed version of H.R.
4. During the mark-up of PRIDE, Senator Snowe indicated plans to offer an
amendment for a greater child care increase when the bill was brought to the Senate
floor (see below).
Snowe Amendment to H.R. 4 (approved March 30, 2004; 78-20).
S.Amdt. 2937 would have provided an additional $6 billion (over five years) in
mandatory child care funding, above the $1 billion ($200 million in each of five
years) provided in the underlying bill, H.R. 4. The additional $6 billion would have
been allotted among the years as follows: $700 million in FY2005; $1 billion in
FY2006; $1.2 billion in FY2007; $1.4 billion in FY2008; and $1.7 billion in
FY2009.
S. 5, by Senator Talent (introduced February 14, 2003). The
Compassion and Personal Responsibility Act, S. 5, contained identical child care
provisions (Title II of the bill) to those included in the House-passed version of H.R.

4 (see above).

S. 261, by Senator Bingaman (introduced January 30, 2003). The
Children First Act of 2003, S. 261, included provisions that would have increased
mandatory funding for child care ($3.967 billion in FY2004, rising to $5.967 billion
in FY2008). In addition, it would have increased the child care quality set-aside from
4% to 10%. The bill would also have amended Title IV-A of the Social Security Act
to exclude child care assistance from the determination of the five-year limit on
TANF assistance.
Comprehensive Child Care Legislation. The largest and most
comprehensive child care-related bill introduced during the 108^th Congress was the
Leave No Child Behind Act of 2003 (S. 448/H.R. 936), introduced by Senator Dodd
and Representative George Miller. The bill was a reintroduced version of earlier
legislation, and features proposals that would have: increased the CCDBG

discretionary funding authorization to $3.5 billion in FY2004, rising to over $20
billion for FY2013; increased the Head Start authorized funding level to $7 billion
in FY2004, rising to $20 billion in FY2013; allocated 5% of total CCDBG funds in
FY2004 (rising to 10% in 2009) to improve and expand infant child care; expanded
the set-aside for Early Head Start; required states to pay child care providers at least
the 100^th percentile of the market rate for care; created a program to improve wages
and skills of child care staff; increased the CCDBG quality set-aside from 4% to
12%; and required all providers receiving CCDBG, or who work in programs
receiving CCDBG funding, to have training in early childhood development.
Another broad-reaching bill, the Right Start Act of 2003 (S. 18), was introduced
by Senator Daschle, and included increased funding authorization for Head Start
($7.5 billion in FY2004, rising to $10.5 billion in FY2008) as well as increased
mandatory funding for child care ($3.7 billion in FY2004, rising to $6.7 billion in
FY2008). This bill would also have increased the child care quality set-aside from

4% to 10%.

Other Child Care-Related Legislation. Other bills that were introduced^th
in the 108 Congress (but not enacted into law) include H.R. 895 (McCarthy), a bill
to provide for the construction and renovation of child care facilities; S. 668 (Reed),
a bill to improve quality and access to CCDF child care by increasing provider
payment rates; S. 388 (Roberts), a bill to expand the dependent care tax credit and
the dependent care assistance program; S. 864 (Edwards), a bill to provide child care
assistance grants to members of the military in active duty; H.R. 3007 (Kucinich) a
bill to assist states in establishing universal pre-K; S. 2654 (Dodd) a bill to create
“kindergarten plus” programs via competitive grants to states; H.R. 4296 (Pomeroy),
a bill to authorize the CAMPIS program at higher levels and to raise the minimum
grant level; and S. 405 (DeWine), a bill to provide loan forgiveness for preschool
teachers in a variety of educational and child care settings. Also pertaining to loan
forgiveness was S. 140 (Feinstein), which would extend loan forgiveness to Head
Start teachers for certain types of loans.
Hearings
^!On July 22, 2003, the Senate Committee on Health, Education,
Labor, and Pensions held a hearing, “Reauthorizing Head Start:
Preparing Children to Succeed in School and in Life.”
^!On March 12, 2003, the Senate Finance Committee held a hearing,
“Welfare Reform: Building on Success,” which featured discussion
of child care funding in the context of welfare reform.
^!On March 6, 2003, the House Education and Workforce
Committee’s Subcommittee on Education Reform held a hearing,
“Head Start: Working Towards Improved Results for Children.”
Testimony can be accessed at [http://edworkforce.house.gov/
hearings /108th/edr/headstart030603/wl030603.htm] .