Administration’s “Bonfire” of Child Care Regulations Would Harm Families Across America
Seattle – A group of labor organizations are challenging an administration attempt to destroy regulations that support equal access to affordable, high-quality childcare. In a complaint filed today in the U.S. District Court for the Western District of Washington, the American Federation of State, Municipal, and County Employees (AFSCME), Service Employees International Union (SEIU), and SEIU Local 925 are asking the court to protect the Child Care and Development Fund (CCDF) from an arbitrary new regulation that would threaten to raise childcare costs for low-income families and hurt smaller childcare providers who operate on shoestring budgets and already struggle to keep their doors open. The plaintiffs are represented by Democracy Forward in the matter.
CCDF was created by Congress to provide eligible families with support for affordable, high-quality childcare. The program entrusts states, territories, and tribes with billions of dollars in federal funds each year to provide grants, contracts, and vouchers that parents can use to pay for care of their choice. Nearly 1 million families and 1.6 million children access childcare through the program each month, and more than 200,000 child care providers – mostly small businesses strained by high operating costs, low pay, workforce shortages, and thin margins – rely on the program as a lifeline to keep their doors open to the families they serve. In 2024, the Administration for Children and Families (ACF), which administers the program, published a new rule with four provisions designed to improve the system and make it more accessible and sustainable. This past May, however, the administration’s new head of ACF promised a “bonfire” of child care regulations and soon published a new rule that would unlawfully nullify the 2024 CCDF fixes.
“The administration’s new rule will devastate the essential child care providers who are already struggling to keep their businesses open, while jeopardizing child care for families who need it most,” said AFSCME President Lee Saunders. “AFSCME members who provide child care and rely on this funding are already operating on razor-thin margins at great personal sacrifice, and the families they serve are struggling to make ends meet. Instead of making the cost-of-living crisis even worse by shrinking the child care market and refusing to contain the cost of child care for working people, the administration should abandon this harmful policy and invest in these essential services and our families.”
“This backwards regulation does nothing to improve the quality of care and early learning for young children, but threatens to destabilize families, workers and local economies,” said Leslie Frane, executive vice president of SEIU. “Instead of making child care more accessible and affordable, this administration has taken every opportunity to demonize immigrant child care workers and drive them out of business. Childcare workers are essential to every community and help keep our economy going by supporting working parents. No matter if you’re a school teacher leaving work at 5pm or a nurse working third-shift, every parent should be able to go to their jobs with the peace of mind that comes with knowing that their children are safe and cared for in a loving environment. If our elected leaders were truly interested in uncovering fraud, waste and abuse, they’d be investigating billionaires, not hard-working caregivers, many of whom are barely scraping by in this economy.”
“Working families rely on stable, affordable child care,” said Tricia Schroeder, President of SEIU 925, a union that represents more than 5,000 child care providers in Washington state. “The CCDF rules allow child care small business owners the flexibility they need to serve their communities. Rolling back these rules would make it harder for them to keep their doors open and for families to find affordable quality care.”
The 2024 rule that today’s complaint aims to preserve requires states to cap copayments at 7% of a family’s income; pay providers prospectively instead of reimbursing them later; pay them based on enrollment, rather than attendance, unless the state showed these were not “generally accepted” payment practices; and deliver some direct services through grants or contracts for infants and toddlers, children with disabilities, and in underserved areas. In approving the new rule, ACF cited studies showing that these changes would lower child care costs and expand parents’ options by encouraging providers to participate in the program. The rule gave hope to providers who struggled to stay in business and families who strained to afford child care under the prior rules.
“The 2024 rule this brave coalition of working people are unifying to protect helps families in need afford childcare, so that they can continue to contribute to their communities. The Trump-Vance administration’s attack on families through unlawfully demolishing these regulations will significantly harm small businesses, local economies, and Americans who rely on the promises made by their government,” said Skye Perryman, President and CEO of Democracy Forward. “The 2026 rule is unlawful, arbitrary and capricious, and the court should set it aside.”
As proposed, the 2026 rule will cost providers and families millions of dollars and shrink the already strained market for affordable childcare. ACF acknowledged that rescinding the enrollment-based payment provision alone would cost providers $16.5 million, but the cost will likely far exceed that number. Without enrollment-based payment, small child care providers on shoestring budgets will lose critical income when children are absent. Without prospective payments, providers must rely on savings or credit, if they can access it, to pay rent, utilities, salaries, and other fixed costs while they await payment for weeks or months for services already provided. Without the copay cap, many families will be unable to afford the CCDF program. And absent the grants and contracts requirement, the parents of underserved children will lack access to the child care on which they rely.
The case is American Federation of State, Municipal, and County Employees et al v U.S. Department of Health and Human Services et al and the legal team at Democracy Forward working on the matter includes Joel McElvain, Sean Ouellette, Briana M. Clark, and Robin Thurston.
To read the complaint filed today, please click here.
For more resources and to find out more about the work to stop the weaponization of federal funding, please visit democracyforward.org.