First Five Nebraska is monitoring the government shutdown for any impact on child care and early learning programs. It is important to understand that states have multiple funding streams and flexibility in the timing for spending funds. Therefore, services are unlikely to be disrupted on a wide scale. This could change if a government shutdown continues.
Programs to watch
Head Start: Head Start provides early learning and care, nutrition, health screenings and other support services to young children from families with low income. Head Start funds are provided to grantees annually, with grants awarded throughout the year on the first of each month. However, the government is currently operating on a Continuing Resolution, a temporary spending measure that preserves funding for federal agencies and programs in the short term. As a result, programs are being awarded funds quarterly. Very few grantees receive funding on October 1st, so most services are unlikely to be affected immediately. However, if the shutdown continues, it becomes more likely that Head Start programs could see a disruption.
Child Care and Development Block Grant (CCDBG): As the largest source of federal funding for child care, the CCDBG provides flexible funding to help low-income families with the cost of child care. CCDBG combines two funding streams: discretionary CCDBG funds that are awarded annually, and mandatory funds under the Social Security Act. States have two years to show how they plan to direct these funds and another year to spend down the funds. This means services are unlikely to be disrupted on a wide scale, as long as payment systems continue to work uninterrupted.
How did we get here
Congress has the exclusive authority to set and spend funding for the federal government. Federal funding is divided into two types—Mandatory and Discretionary.
Mandatory spending accounts for about two-thirds of spending and does not need to be re-approved each year. It essentially operates on an “autopilot” system. Programs in this category include Social Security, Medicare and Medicaid, among other programs.
Discretionary spending is set each year through the appropriation process and includes most other spending, including funding for child care and early learning programs. Congress sets the funding levels for discretionary spending for the following Fiscal Year (FY), which runs October 1 to September 30 of the following calendar year. When Congress does not set this funding, it can pass a Continuing Resolution that continues appropriations at the same levels as the prior FY and allow more time to pass a spending bill. Alternatively, the government can shut down until a CR or appropriations bill is passed.
What’s next
First Five Nebraska will continue to watch what happens in the coming days. While there is no immediate change to funding streams for child care and early learning, programs with unspent dollars could begin to see a disruption if a shutdown stretches out.
While we at First Five Nebraska watch how this plays out, it will be important to keep an eye on payment systems to ensure they continue to operate as intended as well as any impacts furloughed workers may have on services.
