Bill Proposes $20B Annual Boost for Child Care Aid, Adds $5B Yearly Grants for Workforce and Access Starting FY2026

More Cash for Child Care: What's Coming Down the Pipeline

This bill, the "Building Child Care for a Better Future Act," aims to significantly increase federal support for child care across the country, starting October 1, 2025. First up, it injects a hefty $20 billion into the existing Child Care Entitlement to States (CCES) program for fiscal year 2026. Think of CCES as a major funding stream states use to help families afford child care, often managed through their Child Care and Development Block Grant (CCDBG) lead agency. After 2026, this funding is set to keep pace with inflation or match the previous year's amount, whichever is higher, ensuring the support doesn't erode over time. A portion of this money is specifically set aside for Indian tribes and tribal organizations (5%), territories (4%), plus smaller amounts for technical help and research.

Targeting the Gaps: New Grants for Tough Spots

Beyond boosting existing programs, the bill introduces a brand-new grant program, funded at $5 billion each year starting in FY2026. The goal here is laser-focused: improving the child care workforce, increasing the number of available spots, boosting quality, and expanding access, especially in what the bill calls "areas of particular need." What counts as an area of need? That's up to the state, territory, or tribal lead agency to figure out, based on specific criteria and input from the community. They'll need to submit a plan detailing which areas they've identified and how they intend to use the grant money to make improvements there.

Building Blocks: How the Grant Money Gets Spent

So, what can this new $5 billion annual grant pot actually pay for? The bill lays out several options designed to tackle common child care challenges. Lead agencies can use the funds for:

• Direct support to providers: Giving grants or contracts to child care centers and home-based providers.
• Boosting the workforce: Funding training, professional development, and importantly, wage supplements or bonuses to help attract and keep qualified staff – a major issue in the sector.
• Creating more slots: Offering start-up funds or technical assistance to help new providers open or existing ones expand.
• Improving facilities: Providing financial help for buying land or buildings, or making improvements and renovations to child care facilities. This includes a provision ensuring workers on these construction projects are paid prevailing wages.
• Supporting networks: Funding networks that help family child care providers.

There are some guardrails on facility funding – the government won't hold an interest in privately-owned family child care homes improved with these funds, and its interest in other improved properties expires after 10 years.

Keeping it Real: Rules, Reports, and the Bigger Picture

To ensure this new federal money adds to, rather than replaces, existing efforts, states have to certify they'll use these funds to supplement, not supplant, their current child care spending. They also need to maintain minimum levels of their own general revenue spending on child care assistance. Collaboration between states/territories and tribal organizations is also encouraged. Furthermore, agencies receiving these grants will need to report regularly (at 1 year and 3 years) on how the money was used and what impact it had, with ongoing evaluations mandated by the bill. This structure aims to provide significant new resources while building in accountability to make sure the funds target the intended problems of workforce shortages, lack of supply, and access barriers in high-need communities.