01/15/2012 03:41 pm ET Updated Mar 16, 2012

Federal Funding, Child Care and Jobs

Even as our nation's unemployment rate has fallen to 8.5%, unemployment remains stubbornly high in many areas. States like California, Nevada and Mississippi, in addition to Puerto Rico and the District of Columbia, experience unemployment rates significantly above the national average.

Squeezed state child care budgets are not helping. There is increasing attention being paid to the importance of child care in workforce development. Particularly for single mothers and for low income families generally, a lack of child care can be a barrier to their gaining credentials and to finding and maintaining work. Quality child care has been shown to be important for social mobility.

Last July, supplemental grants to 17 states under the 1996 Temporary Assistance for Needy Families (TANF) program expired. Since 1996, these states have expected this funding to help support their safety net. Moreover, as federal law allows up to 30% of TANF funds to be transferred to support child care, many states depend on TANF funds to support child care subsidies. State budgets are already severely strained by the recession. Many proposals to increase child care quality require investments that states cannot afford in the current environment. The lack of supplemental funding this year will likely reduce by more than $100M the available funds if not resurrected by Congress compared to years past.

As child care support can make a difference for some families in finding and maintaining employment, the expiration of the supplemental grants places additional pressure on states looking to make a dent in their unemployment rates. Of the 17 states that had received the supplemental funding, a majority have unemployment rates above the national average. Of the 47 largest metropolitan areas that exceed the national unemployment average, 24 of them are in states where supplemental TANF funding has run out. The federal fiscal crisis makes it difficult to renew the grants. As the connection between jobs and child care is increasingly made, the state and federal fiscal situation is increasingly important to consider.