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According to new state-reported statistics for fiscal year 1999, 1.8 million children in low-income families are receiving federal child-care subsidies on an average monthly basis. This is a slight increase from the 1.5 million children served in 1998. Yet, with 15 million children estimated to be eligible for federal support, only 12 percent of those children are receiving federal help due to limited federal funds.

A companion report, "National Study of Child Care for Low-Income Families, State and Community Substudy," confirmed that even when additional state funds are included, many children still go unserved. The study also reported that, because of the strong economy and more parents working, states were spending significantly more for child care, with a median increase of 78 percent from 1997 to 1999 in the states studied. Yet, a survey of 17 states showed that those states were only able to serve 15 to 20 percent of federally eligible children in 1999. The study, prepared by Abt Associates for HHS, also reported waiting lists in 12 of the 17 states.

"The information released today confirms that working families still do not have adequate access to safe and affordable child care for their children--something that is crucial if they are to keep their jobs," said Secretary Shalala. "Our appropriations bill now before Congress includes an $817 million increase in the Child Care and Development Block Grant. It is imperative that Congress pass this bill now and provide critical child care support for America's working families."

Even though states are continuing to use all the federal funds available to them for child care, today's findings demonstrate the extent that eligible children are going unserved. In fiscal year 1999, states spent $5.2 billion in federal funds, including transfers from their welfare block grant, and spent $1.6 billion from their own funds. During that time, only 1.8 million of the approximately 15 million children eligible for federal child care support received federal funds.

Studies in Florida and North Carolina have found that increased child care subsidies result in increased employment rates and earnings for low-income working families. Conversely, parents who have no child care support are seven times more likely to rely on public assistance than employed parents who receive a subsidy. A study of Santa Clara, Calif. showed that one-third of low-income parents were unable to work because they could not afford child care, while another third reduced their work hours.

"Studies show that subsidized child care helps parents stay employed while a lack of subsidies results in more parents giving up jobs or reducing their work hours," said Olivia A. Golden, HHS assistant secretary for children and families. "This is the reason that the administration has proposed a major increase in child care funds, which is currently part of the bipartisan conference agreement on Labor-HHS appropriations before Congress. Prompt action by Congress is needed to ensure that these funds reach the working families who need them."

Never before has the American economy been this strong and the need for affordable, quality child care this critical, Golden noted. With the unemployment rate recently at a 30-year low, many employers are straining to find workers. Meanwhile, more parents are entering the work force. In 1996, 3 out of 4 mothers with children between 6 and 17 were working compared to 1 in 4 mothers in 1965. Two-thirds of mothers with children under 6 now work.

The state-reported statistics released today highlight that 84 percent of all families who received child care subsidies did so because the parents were employed. The majority of families, 68 percent, were responsible for co-payments at an average of 6 percent of their income. Nearly three-quarters of all children receiving subsidies were served in licensed care, while 15 percent of all children receiving subsidies were cared for by relatives. About two-thirds of the children were under 6 years old.

A state-by-state listing of children served is available at: www.hhs.gov/news/press/2000pres/20001206a.pdf.

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