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After distributing over $24 billion in child care stabilization grants, the American Rescue Plan Act (ARPA) is set to expire September 30, precipitating a ‘fiscal cliff’ for many programs. A fall 2022 survey from the National Association For Young Children found 35% of providers surveyed credit ARPA funds with keeping their businesses open. If funds are not continued, analysts expect to see closures, reduced access to care, reductions in already poor wages and consequent staffing shortages. According to the Century Foundation, up to 3.2 million children would lose access to care, and the economic costs to states would surpass $10.6 billion per year.

To address the fiscal cliff, federal lawmakers have now introduced the Child Care Stabilization Act, proposing $16 billion per year for the next five years, to offset operating costs, maintain or improve wages, and minimize drastic increases in tuition. It includes provisions to expand access to care for infants and children with disabilities. The plan would function similarly to ARPA funds. Many in the field are contacting their representatives to express opinions on the need for continued funds.

In an upcoming Exchange article, Karen Foster-Jorgensen explores lessons learned from the pandemic and recovery funds and suggests, "One helpful perspective is to look at our organizations as though they are starting new today. What if we were at the beginning of our business cycle, how would we create a business model setting us up for success?"

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