A year after federal relief funding for child care ended, many states are confronting the troubling—yet familiar—signs of instability in their child care systems. The infusion of federal aid, paired with smart state policy, had helped programs reopen or stay open, and had even grown the supply of care in some states during and following the pandemic. Between 2023 and 2024, Child Care Aware of America found that the number of licensed centers grew by 1.6% and family child care homes by 4.8%. But with relief funds gone, flat funding for the Child Care and Development Block Grant in FY 2025, and flat or modestly increased federal funding for FY 2026, many states are grappling with what to do next. 

As of October 1, the federal government shut down after Congress failed to reach a funding agreement for FY26. While the federal programs supporting child care are not expected to have funding or operations impacted for the time being, many other vital programs won’t be able to run as usual. Government shutdowns create real harm for families and communities across the country.  

Even though the child care system faces challenges there are paths forward. Sustainable child care isn’t just possible—it’s achievable, if we act together. Experts discussed these paths forward during a Congressional briefing held by Child Care Aware® of America (CCAoA) and the Buffet Early Childhood Institute on September 10, 2025 to examine how to use what we have learned to improve the child care system. 

Update: As of October 1, the federal government shut down after Congress failed to reach a funding agreement for FY26. Please visit our page with further information on how the shut down is affecting child care programs. 

Congress is back from August recess, and making funding decisions that will impact child care accessibility and affordability nationwide. These decisions will shape the resources available to families and child care providers across the country. 

The 2025 state legislative sessions provided both opportunities and hurdles for states to improve their child care systems. In 2025, all states were in session while 47 states and Washington, D.C., were scheduled to pass budgets, meaning policymakers in every state had an opportunity to advance proposals that improve the child care system.   

The final 2025 tax reconciliation package (also known as the One Big Beautiful Bill Act – H.R.1) was signed into law on July 4, 2025. This bill passed both chambers by narrow margins. It passed 215-214 in the House of Representatives in May and 51-50 in the Senate on July 1st. The House then ultimately passed the Senate’s version of the bill 218-214.