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The report, "Access to Child Care for Low-Income Working Families," estimates that 14.7 million children in low-income families were eligible to receive a subsidy under federal income limits in 1998, but only 1.5 million children received assistance. According to the report, a family of three earning $15,000 without child care assistance would pay between 24 percent and 45 percent of their income on child care. If these same families received child care subsidies, they would only need to spend between 1 percent and 7 percent of their income on child care. The report was released at a press conference today by Secretary Shalala and Senators Chris Dodd (D-CT) and Jim Jeffords (R-VT).

"This timely and important report provides conclusive evidence that millions of low-income parents eligible for child care assistance are not getting the critical support they need to stay employed," said Secretary Shalala. "Bipartisan support for a wise and worthwhile investment in child care for America's working families is growing, but the clock is ticking for Congress to act. For working parents and their children, there's not a moment to lose."

Recent studies of 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 wait for 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, California 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.

Under the 1996 welfare law that consolidated most federal child care funding, states could serve 14.7 million children at the federal limit of 85 percent of the state median income level. However, most states have set their income caps well below the ceiling. There were approximately 10 million children eligible under state-set limits in 1998, of whom only 15 percent were served. At the federal maximum limit, 27 states are serving less than 10 percent of eligible children, with the remaining states serving between 10 and 25 percent.

Even though states are continuing to use all the federal funds available to them for child care large numbers of children still go unserved. In fiscal year 1998, states spent $3.5 billion in federal funds, including transfers from their welfare block grant, and spent $1.6 billion from their own funds. In 1998, the number of children served rose to 1.5 million, up from 1.25 million in 1997. These numbers cover children served by the Child Care and Development Block Grant, created by the 1996 welfare reform law.

"Recent studies conclude that child care subsidies make a difference for parents trying to get and keep a job," said Olivia A. Golden, HHS assistant secretary for children and families. "If we are to keep the promise to families leaving welfare, or struggling to avoid welfare in the first place, then we must increase the funds for child care to help them succeed at work and at home."

Never before has the American economy been this strong and the need for affordable child care this critical, Golden noted. With the unemployment rate at 4.2 percent, 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 six now work.

The President's balanced budget includes an historic initiative to improve child care for America's working families. The initiative proposes over $19 billion over five years for child care - the single largest investment in child care in this country's history. The proposal would expand assistance through the Child Care and Development Block Grant (CCDBG) for working families, enhance child care tax credits, and give communities the resources to improve the quality of care for children across income levels.

Today's report also notes that many parents are working non-traditional shifts. These parents face even more complicated challenges, as availability of child care for those non-day shifts is extremely limited. Statistics further report that the proportion of low income employed parents working non-traditional shifts is greater than higher income parents. There are 4.2 million preschool children with mothers who work non-day shifts, representing 4 out of 10 preschoolers overall, and 52 percent of preschoolers from families with incomes below 200 percent of poverty.

The report contains previously released summaries of studies that describe the importance of quality child care and its impacts on the learning and social development of children. Several recent studies reveal that high quality child care programs result in higher test scores, better preparedness for school and reduced behavioral problems in children.

The report is available on the Internet at: www.acf.dhhs.gov/news. A table of state by state numbers is available at: www.hhs.gov/news/press/1999pres/991019.pdf (requires free Adobe Acrobat Reader software) www.adobe.com/products/acrobat/readstep2.html.

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