Child care is one of the hottest topics in public discourse today, and for good reason. The sector is finally (if a bit slowly) getting the attention it deserves, and several universal truths have emerged:

1. The ROI for early childhood investment is staggering. From a purely economic standpoint, few investments pay off as strongly or as consistently as early childhood. The National Forum on Early Childhood Policy and Programs estimates returns between $4 and $9 per every $1 invested in high-quality early childhood programs.
2. Child care is a bipartisan issue. Although specific strategies and priorities may differ from right to left, all of society benefits from well-funded and well-functioning early care and education systems.
3. Child care is ripe for modernization. We’re not going to see sustainable gains by pouring more money into the old way of doing things. Better data and technology infrastructure can reduce barriers to entry, improve efficiencies, and give policymakers the data they need to make informed decisions.

July 2026 Updates

HHS Has a Transparency Problem

HHS and ACF continue to raise eyebrows with perceived censorship and funding blocks affecting programs, proposals, and research results that seemingly do not align with the administration’s agenda. We saw two more examples of this in the past month. 

HHS canceled one-fifth of the research sessions on the National Research Conference on Early Childhood’s agenda less than a week before the conference began. As reported by The Hechinger Report, the connections between the canceled sessions were ambiguous, with no clear rationale for why some similar sessions remained on the docket. One conference attendee remarked that “...these are not radical sessions, these are seemingly run-of-the-mill research presentations.” Researchers did not receive any explanation for the cancellations.

This kind of closed-door, seemingly arbitrary decision-making reared its head early in the year when the administration’s “fraud” claims resulting from the work of a right-wing YouTuber led to a since-lifted funding freeze in five Democrat-led states. As reported by The Hill and others, the American Civil Liberties Union, two of its state-level affiliates, the National Center for Law and Economic Justice, and the National Women’s Law Center have joined forces to file a lawsuit seeking records related to that funding freeze. The groups had originally submitted a Freedom of Information Act request in March, but no records have been received. 

As the federal agency under which so many early care and education programs fall, ACF’s recent pattern of obfuscation and misdirection is alarming. It’s easy to understand how states, researchers, and ECE advocates on the ground are increasingly wary of pursuing long-term projects or relying too heavily on federal funding when it often feels like the next politically motivated shoe could drop at any minute. 

Bipartisan Bills of Note

The Child Care Small Business Insight and Improvement Act of 2026 (H.R.9553), introduced by Reps. Greg Landsman (D-Ohio) and Dan Meuser (R-Pennsylvania), would “require the Administrator of the Small Business Administration to submit to Congress a report on for-profit child care providers, and for other purposes.” The authors of the report would be required to: 

• Assess the challenges and needs of for-profit providers
• Provide an accounting of the resources and support SBA offers to such providers
• Identify deficiencies in said resources and support
• Recommend legislative actions necessary to address the aforementioned challenges and needs
• Identify leadership needs for implementation of such recommendations
• Identify instances of fraud among these providers and recommend statutory changes to prevent misuses of federal funds

The READ Act (S.4689), introduced by Sens. Bill Cassidy (R-Louisiana) and Maggie Hassan (D-New Hampshire), would federalize regulations that have previously been taken up by states to align reading instruction with evidence-based (science of reading) approaches. The Act would: 

• Align curriculum and classroom instruction with the science of reading
• Support state agencies in their implementation of the science of reading
• Improve teacher prep and professional development
• Promote early identification and intervention for students at risk of reading difficulties
• Support data-driven literacy strategies with an eye toward closing opportunity gaps
• Protect and strengthen the literary research capacity of IES and other credible sources

This kind of action will be increasingly relevant for the ECE community, given the growing understanding that “the foundations of literacy begin before kindergarten.” Read: How Early Childhood and K-12 Systems Can Work Together to Support Early Literacy (Center for American Progress)

Updates from the States

California Governor Gavin Newsom signed a final budget featuring funding to expand the state’s child care subsidy program by nearly 23,000 slots. The bill also granted universal eligibility to families in poor school districts and children of school district employees. This was a big win for families and advocates after previous talks of possible cuts to the program. California did not end up increasing compensation for preschool providers, a long-term concern in so many parts of the country today. Read: After threat of cuts, California expands subsidized child care by more than 20,000 spaces (Los Angeles Times)

Illinois and Kansas both celebrated the launch of their new early childhood state agencies on July 1. The Illinois Department of Early Childhood and the Kansas Office of Early Childhood will join the growing list of designated state agencies for early care and education with a direct line to the governor, a best practice we examined in detail last month in Faces of ECE with Elliot Regenstein. 

New York school districts sent more than $170 million in unused Universal Pre-K funding back to the state after last school year. While some districts did so because they met 100% of the demand for services, others have been returning the money every year without filling the need. This inconsistency has been addressed through legislation, and all school districts will be required to use their available funding beginning in the 2028-2029 school year. Read: $170m in unused UPK funding returned to state; senator says Monroe-Woodbury sent back the most (News 12 Hudson Valley)

North Carolina ended up infusing its child care subsidy program with $97 million in new funding without touching its $400 million Opportunity Scholarship school choice program, which had previously been considered as a potential source for the expansion. Instead, the final budget directs $97 million in federal funds to boost reimbursement rates for providers and set a statewide floor, a significant boon to rural providers who received far less under the previous model. With the state’s waitlist sitting at more than 15,000 children, the additional funding should relieve some of the immediate pressure. Read: Budget delivers child care subsidies without defunding school vouchers (The Carolina Journal)

Virginia’s recently approved biennium budget would fully eliminate waitlists for the state’s Child Care Subsidy Program, while also providing room to expand the budget by just under 10% (~6,700 new slots). This milestone marks a massive turnaround from this time last year when the waitlist was approaching 13,000 children. Virginia policy advocates say there is still work to be done to build the supply needed to expand access throughout the state. Read: State budget would eliminate Child Care Subsidy Program waitlist (VPM)  

Trending Original Research and Reports

New America’s Aaron Loewenberg sparked an important conversation about the fine line between necessary regulation reform and dangerous deregulation with his exploration of recently proposed and enacted changes in Indiana and Iowa. His closing point says it all: “The goal of reform should be to make it easier for providers to deliver high-quality care, not to make it easier to deliver cheaper care at the expense of quality.” Read: Reducing Red Tape in Child Care: Sensible Reform or a Race to the Bottom?

Linda Smith’s new Child Care Trust organization issued its first report since launching. They explored what would happen to the child care gap should federal funding for Head Start ever be eliminated. The numbers are astounding. The dissolution of Head Start would result in a 15% increase in children unable to access child care (654,500 kids in total). Read: Head Start’s Impact on the Child Care Gap

Child Care Aware of America conducted a state-by-state analysis of the gap between subsidy reimbursement rates and the true cost of providing child care. The results were as expected—state child care systems are deeply underfunded, and providers are being forced to make the choice to either shoulder the burden or shut their business down altogether. Explore: Examining the Gaps - Child Care Prices, Costs, and Subsidies

The Prenatal-to-3 Policy Impact Center published an interesting report segmenting state early childhood governance into three distinct typologies: whole child, school readiness, and parents’ workforce participation. The report does a good job of weighing pros and cons at a high level, supplemented by deep-dive case studies from multiple states. Explore: Early Childhood Governance Typologies - Patterns in State Governance Across the Nation

The Bipartisan Policy Center published an eye-opening case study of the CHIPS Act child care requirement, written by the senior advisors for child care within the CHIPS Program Office. This report offers a unique inside look into the outcomes and challenges associated with implementing one of the country’s largest ever employer-driven child care initiatives. The results offered a strong microcosm of the same issues being experienced by other private-public partnership ventures, including the structural barriers that get in the way of employer participation. Read: The Infrastructure Needed to Make Child Care Investments Work: The CHIPS Act Child Care Requirement as a Case Study

ICYMI: June 2026 Updates

The Child Care Modernization Act is So Back

On June 9, Reps. Ryan Mackenzie (R-Pennsylvania), Susie Lee (D-Nevada), Ashley Hinson (R-Iowa), and Kristen McDonald Rivet (D-Michigan) introduced the Child Care Modernization Act in the House. The Act, which had most recently been introduced in the Senate last September, includes the following provisions: 

• New grants for child care supply building and the construction and improvement of child care facilities
• The introduction of cost estimation models for calculating provider reimbursement rates more closely aligned with the true cost of care
• Additional technical assistance to in-home and rural child care providers
• Flexibility for states to expand eligibility for CCDBG-funded programs
• The removal of regulatory burdens for rural providers
• Continued support for mixed delivery systems and family choice

The Act is, in many ways, a big step toward aligning CCDBG (last reauthorized in 2014) with the needs of today and delivering some semblance of future-readiness to the program. It is supported by a laundry list of who’s who in ECE and has repeatedly been shown to have strong public support from voters across party lines. Now is the time to act!

Read: First Five Things to Know About: The Child Care Modernization Act (First Five Years Fund)

Military Child Care Receives an Informative Review

The U.S. military child care system has long been looked to as a model framework for both employer-sponsored child care initiatives—the Department of Defense (DoD) operates the largest such program in the country—and workforce development efforts targeting its 19,000 child care workers. This month, the U.S. Government Accountability Office (GAO) issued two reports shining a light on two potential sticking points for military families in need of care: provider eligibility challenges and workforce recruitment and retention difficulties. 

On the topic of supply, GAO found that community-based child care providers reported significant obstacles related to their eligibility to participate in the DoD’s fee assistance program. These challenges, many of which mirror the barriers posed by state licensing and quality program requirements throughout the country, include difficulty navigating program requirements, costly and time-consuming administrative burden related to accreditation, and a lack of clear communication related to ineligibility reasons and next steps. GAO’s recommendation was for DoD to provide more information to providers regarding eligibility-related decisions. 

On the workforce front, the report acknowledged ongoing difficulties recruiting and retaining workers for their child care programs. It includes a breakdown of where our military services are investing in recruitment bonuses and retention allowances (shout out to the Navy, which didn’t have the data to differentiate between the two). Not surprisingly, one of the most impactful benefits from a retention standpoint was the program’s child care fee discounts, which include free child care for the first child enrolled at a DoD child development center. This aligns with what is rapidly becoming a best practice at the state level. 

Read: Before They Can Serve Our Country, Many Military Parents Need Child Care (U.S. Government Accountability Office)

Updates From the States

Maryland’s new Early Care and Education Coalition will seek to “come together to create stronger alignment and coordination and overall strengthened implementation of Maryland’s childhood system.” The coalition, led by many of Maryland’s most influential players in the ECE space will initially be focused on improving the state’s ECE workforce infrastructure, including a workforce registry and career lattice. Read: Newly formed early childcare coalition aims to drive home importance of work (The Baltimore Sun)

Nebraska celebrated a big win for its families when Governor Jim Pillen ceremoniously signed LB 304 into law at Omaha’s Kids Can Community Center alongside Senators Wendy DeBoer and Brad von Gillern, marking the culmination of a lengthy bipartisan effort. The bill permanently extended higher eligibility limits for the state’s childcare subsidy program that had previously been due to sunset in October of this year. The higher threshold represents a nearly $20,000 per year income cap raise from $42,000 to $61,050 for a typical family of four. Read: Gov. Pillen, Senators, and Childcare Advocates Celebrate Signing of LB 304 (Nebraska Office of the Governor)

New Hampshire closed out its legislative session with a mixed bag of results in ECE. The state passed bills giving retired kinship caregivers access to the state childcare scholarship program, continuing a ratio waiver program, creating a new child care tax credit for businesses, and simplifying zoning laws. Not making it across the finish line were multiple proposals that would have injected new funding into the child care scholarship program, one to upgrade its technology infrastructure and reduce lag time for parents and providers, and one that would have increased the program’s income eligibility threshold. A governor-endorsed on-site child care tax credit for businesses also failed to make it out of the Senate. Read: The childcare bills that failed to make it across the finish line in 2026 (New Hampshire Bulletin)

South Carolina’s required three-year audit of DSS programs focused on the department’s oversight of child care providers this year. The resulting report called out gaps in ongoing monitoring of providers that have appealed a revoked license, inconsistencies, long turnaround times, and outdated infrastructure in the licensing process, and unclear communication to providers about the state’s ABC Quality rating program. In the wake of the report, DSS Chief External Affairs Officer, Connelly Anne Ragley, noted that implementation of the audit’s recommendations will require additional funding appropriations. Read: Families pay $10K for child care in SC, audit finds. Is access key to lower cost? (The State)

Virginia became the latest state to embark on a public-private partnership journey with Governor Abigail Spanberger signing the new Employee Child Care Assistance Program into law. This Tri-Share-like approach, to be administered by the Virginia Early Childhood Foundation, will match funds from employers contributing to the child care costs of their employees. Read: Governor Spanberger Signs Bipartisan Legislation Lowering Childcare Costs for Parents (Official Virginia Governor Website)

The clock strikes midnight this month in Wisconsin, where a massive child care supply crisis is about to get much worse. Despite years of drum-banging and a temporary reprieve in 2025, child care stabilization funding for providers ends on June 30, putting the future of as many as one in four centers in jeopardy. To make matters worse, there does not appear to be any avenue for hope between now and the passage of the 2027 state budget, “which will be hammered out by a new governor and a new state Legislature.” Read: Childcare providers are about to lose a safety net (News From The States)

Trending Original Research and Reports

Brittany Walsh at the Bipartisan Policy Center analyzed the child care workforce to give us some eye-opening statistics on the demographics, experience, compensation, and education of early childhood professionals in the United States today. Explore: Who Cares for Our Kids? Understanding the Child Care Workforce

Child Care Aware of America released its Child Care in America: 2025 Price & Supply report in late May. The report offers a comprehensive and aesthetically pleasing look at “a system under strain,” with limited progress in supply building and a continuing trend of rising prices for families. Explore: Child Care in America: 2025 Price & Supply

New America published the results of a “largest-of-its-kind, point-in-time” national survey of U.S. parents with young children under age six. The results reflect a parenting landscape in which families want more time with their children and more flexibility in care and employment options. Explore: What Parents of Young Kids Want: Insights from the 2026 National Parent Survey

Rebecca Gale’s self-labeled “research novella” for New America on Vermont’s long and winding path toward the 2023 landmark child care legislation known as Act 76 is a masterclass in long-form journalism. The piece serves both as a blueprint for meaningful change at the state level and as an emotional, engaging examination of the need for strong leadership, cross-sector collaboration, and the flexibility to pivot at a moment’s notice. This was my favorite read of the month. Read: Vermont Needed Child Care; Here’s How They Got It

The Prenatal-to-3 Policy Impact Center at Vanderbilt University published a deep-dive study on the supply of center- and home-based child care in greater Davidson County, Nashville, Tennessee. The findings, presented across an executive summary and five separate research briefs, are being used “to inform expansion planning, resource allocation, and policy and funding advocacy.” It’s a terrific example of data-driven decision making at the local level, and an approach we hope will expand to more communities. Explore: Davidson County Child Care Landscape Study 

Sara Mickelson, writing for Vox, made the rounds this month with her piece examining how ongoing supply issues have hampered the implementation of New Mexico’s “universal childcare” system. Read: How to screw up universal childcare (Paywall)