Even with two incomes, Charity Pallum said she and her husband would not be able to afford child care for their 1-year-old twins. But because of federal child care subsidies, both Pallum, a teacher, and her husband, who works at a car dealership, are able to work full-time.
Now, the Trump administration is increasing the reporting burdens for states to access the money. If Pallum’s family were to lose that support, her husband might have to stop working, putting a pinch on their family budget.
“I guess our plans are, ’We’re just going to see how this goes,’” said Pallum, a teacher living in Ada, Minnesota.
The Trump administration’s crackdown on the $12 billion Child Care and Development Fund, which subsidizes care for 1.4 million children from low-income households, has rattled child care providers and families that rely on the aid money. Citing unspecified allegations of fraud, Trump administration officials are requiring states to provide extra documentation before receiving the money.
It’s unclear if or when child care providers and families like Pallum’s would feel the pinch. Some states, like Minnesota, also invest state resources in child care programs, which could insulate families from any impacts.
Child care centers are bracing for scrutiny and possible cuts
The administration announced last week that state officials will be required to provide additional information to receive the federal child care money. On Tuesday, the U.S. Department of Health and Human Services announced a “freeze” that will require officials in five Democratic-led states to provide even more exhaustive documentation.
The department said it also would withhold other federal safety net money for those states — California, Colorado, Illinois, Minnesota and New York — including Temporary Assistance for Needy Families, which supports low-income parents with children under 18 with direct payments and by providing them with child care.
The administration has not released information about the fraud allegations that prompted the new scrutiny.
HHS said in a statement that it “identified concerns that these benefits intended for American citizens and lawful residents may have been improperly provided to individuals who are not eligible under federal law.”
The actions raised fears of payment delays and disruptions for the beleaguered child care industry, which has been struggling under staff shortages, long waits for subsidy programs and the effects of the Trump administration crackdown on immigration.
“Child centers are always living on the margins. Our staff are never paid enough. We can’t charge families enough privately to cover what staffers make,” said Jeanie Harris, executive director of programs at First Learning, a group of child care centers in New York state. “So we’re always living on the margins, especially with the subsidy programs, and any change or hit our reimbursements is going to be a house of cards.”
Providers say they already face extensive regulations
Already, child care providers comply with extensive regulations to receive federal subsides. Dawn Uribe, who runs Mis Amigos Preschool with several Minnesota locations, said staff have to make sure kids sign in and out with the correct ID, and it can take a month to get paid for services. For years, inspectors have regularly visited to assess their records.
“There’s already so much oversight that goes into this so I don’t really understand how much more they can do,” Uribe said.
The legwork required to meet federal subsidy requirements has at times made Uribe question whether she wants to keep accepting children who receive subsidies. Ultimately, it’s worth it to ensure she can provide care to low-income kids who need it, she said.
“We’re doing the best we can, and it’s hard work,” Uribe said.
Karen DeVos, who runs three childcare facilities in rural northwest Minnesota, is preparing her staff to pull records on the spot in case an investigator shows up unannounced. Daycare centers are regularly subjected to audits and attendance checks, she said.
“If we continue to view every provider as somebody who could be committing fraud, we are going to lose really valuable resources in our child care providers,” DeVos said. “There is only so much stress that people can take and not knowing every single day if somebody is going to knock on your door and accuse you of something is terrifying.”
Pallum said neither she nor her husband want to risk skipping paychecks if they lose the child care subsidy.
“We have responsibilities to our families and we have responsibilities to our work, and we want to maintain both,” said Pallum. With federal childcare funds, “we can give our twins a consistent schedule. They do so much for the twins and they do so much for us, just being consistent and being able to live up to our responsibilities as parents and as community members.”
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