What is the Child Care Modernization Act?

The bipartisan Child Care Modernization Act (CCMA) would reauthorize the Child Care and Development Block Grant (CCDBG), the federal law underlying the nation’s primary child care support program, through fiscal year 2030. The legislation would broaden and clarify eligibility, change how states determine provider payment rates, strengthen support for the child care workforce, establish a supply and facilities grant, and improve reporting on families who are eligible for assistance but remain unserved. 

For more than 30 years, CCDBG has provided states with federal funding and flexibility to help low-income families access child care. States use federal and state Child Care and Development Fund (CCDF) resources to provide child care assistance, support quality improvement, establish health and safety requirements, and administer the program through a mixed-delivery system of center-, home-, and faith-based organizations, schools, and other providers. Congress last reauthorized CCDBG in 2014, strengtheninghealth and safety protections, background checks, inspections, consumer information, and continuity of assistance.  

In the years since, child care costs have increased, provider staffing challenges have persisted, and many communities continue to face shortages in the supply of child care, particularly for infants and toddlers, children with disabilities, families working nontraditional hours, and rural families. BPC polling found that 4 in 10 caregivers have difficulty finding care that meets their needs; among them, 6 in 10 report that someone in their household had missed work, reduced hours, or changed jobs because of those challenges. 

Modernizing Eligibility around Families’ Lives 

Over the course of a working life, a parent may move between jobs, pursue training, become self-employed, take temporary leave, or step away from work to address a personal or family health issue. Child care can enable a parent to prepare for, remain in, or return to the workforce during each of these transitions. 

CCMA would broaden the federal definition of eligible activities to include full- and part-time employment, self-employment, education and training, and certain health treatment, among others. The legislation would also extend eligibility to children experiencing homelessness, in kinship care, needing protective services, and living with a parent older than 65—families who face circumstances that do not align neatly with traditional work requirements. 

Additional hours, a raise, or a new job can push a family above the income threshold before it can reasonably absorb the full cost of care, creating a loss of support just when a parent is advancing in the workforce. CCMA would also give states greater flexibility in supporting families as their income rises by allowing states to seek a waiver to serve families above the current ceiling of 85% of state median income. States would continue to prioritize and serve eligible children below that threshold to support families moving toward greater economic stability without displacing those prioritized by the program. 

Recognizing Family Choice through Mixed Delivery 

Families’ child care needs and preferences often change as children grow. Parents weigh and make tradeoffs between trust, quality, cost, location, work schedules, cultural fit, and a child’s developmental needs. A setting that works well during infancy may not during early childhood or school-age years.  

CCDBG already allows families to use assistance across eligible provider types. By explicitly recognizing mixed delivery, CCMA would affirm that child care takes place across different settings. Because CCMA ties state rate-setting requirements directly to the mixed-delivery system it defines, it would ensure that states hear from different provider types across geographies when building cost-estimation models. This makes it more likely that payment rates reflect the operating realities of providers.  

Connecting Provider Payments to the True Cost of Quality Care 

Historically, states have relied heavily on market-rate surveys to inform child care subsidy payment rates. These surveys measure the prices providers charge families, which are often constrained by what parents can afford, rather than the full cost of providing care. Provider rates affect whether participating in CCDBG is financially viable for programs and whether they can retain qualified educators, and offer stable, quality care—not simply whether a child care slot exists. 

CCMA would require states to set and pay provider rates in accordance with a statistically valid cost-estimation model. The model must reflect fixed and operating expenses, workforce costs, and cost variations based on geography, provider type, children’s ages and needs, nontraditional hours, and quality. CCMA would maintain CCDBG’s existing requirement that states establish a sliding fee scale to determine family cost sharing while ensuring those costs do not become a barrier to access. It would strengthen that framework by requiring an appropriately reduced copayment for families using part-time care. 

Creating New Tools to Expand Supply 

Child care assistance can help families afford care, but it cannot create a slot where none exists. CCDBG funds generally cannot be used for construction, permanent improvements, or major renovations—limiting states’ ability to support expanding care. 

CCMA would address this gap with a new child care supply and facilities grant program. The federal government would award these grants to states, territories, Indian Tribes, and Tribal organizations, which could reserve up to 10% for administration of subgrants and technical assistance, and would use the remainder to deliver two types of subgrants to qualified providers: 

• Startup and Supply Expansion Subgrantsto support providers with startup costs, meeting health, safety, and quality state licensing requirements, establishing family child care networks, or expanding types of care facing particular shortages.  
• Facilities Subgrantsfor repairs, remodeling, renovation, construction, or permanent improvements. 

Providers receiving either type of subgrant would be required to commit to becoming or remaining CCDBG-eligible providers and serving eligible children on an ongoing basis. Priority would go to providers serving underserved populations, including children in rural areas, infants and toddlers, children with disabilities, and families needing care during nontraditional hours. 

Improving Transparency and Accountability 

Child care data is fragmented across programs, agencies, and provider settings. This leaves states without a full picture of which eligible families remain unserved, what they are paying for care, and where affordable options are lacking. Most program data begin with families who are receiving assistance. Yet withonly a fraction of federally eligible children receiving a subsidy, understanding who remains unserved, and why, is just as important as knowing who is enrolled. 

CCMA would require states to report on unserved families, including the affordable options available to them, how the state could reduce families’ copayment burden, and how the state intends to expand access to these families over the following five years. Additional reporting would track state progress on affordability, parental choice, provider payments, workforce stability, quality, and program integrity, and whether the new supply and facilities grants are increasing the number of providers and child care slots. Together, these requirements would help pinpoint where the program is falling short and target resources accordingly. 

A Foundation for Future Progress 

CCMA provides a strong foundation for investment, incorporating lessons learned since 2014. Its reforms recognize that affordability, supply, workforce capacity, provider operating costs, family choice, and effective administration are interconnected, better positioning states to support families, strengthen communities, and respond to child care’s broader role in the economy. That said, CCMA would not resolve every challenge, nor guarantee that every eligible family receives assistance. Fully realizing the legislation’s goals would require increased state and federal investments alongside the updated framework.