Child Care Centers NAICS 624410

Jun 3, 2025 - Trump Administration Seeks Steep Cuts To HHS Budget

• The Trump administration is seeking $94.7 billion to fund the Department of Health and Human Services (HHS) in fiscal year 2026, a decrease of more than $31 billion. The proposed decrease may negatively impact a federal-to-local program that funds child care and other support for the poorest families in America, according to the Hechinger Report. Nineteen states and the District of Columbia filed a lawsuit against the federal government to block the Trump administration’s large-scale restructuring of the HHS. The staffing cuts are part of a reorganization of the Administration for Children and Families, which administers Early Head Start, the program through which the funding for child care and other support is provided. Regular Head Start serves children three to five years old; Early Head Start is for those under three. A federal funding freeze in early 2025 was the first shock to child care providers, then many Head Start federal support positions were terminated by the Department of Government Efficiency. The Department of Health and Human Services announced on March 27 that it plans to eliminate a further 10,000 jobs.
• The cost of child care now exceeds the price of college tuition in 38 states and the District of Columbia, up from 33 states and DC since the beginning of the coronavirus pandemic, according to the Economic Policy Institute (EPI). EPI used 2023 federal and nonprofit data to compare the monthly cost of infant child care to that of tuition at public colleges. Average costs range from $521 per month in Mississippi to as much as $1,893 per month in Washington, DC, for households with one 4-year-old child, according to EPI.

• Child care facility owners contacted by the Federal Reserve Bank of Kansas City noted increasing liability insurance premiums as an emerging challenge for their business. One provider said that their premiums increased 94% in 2023. Another suggested that a growing informal child care network is operating without insurance due to the rising costs. Increasing operating costs, particularly rent and insurance, result in higher tuition costs for families in the absence of additional public funds, but there are limits to tuition increases, according to the National Association for the Education of Young Children.
• Child care industry employment increased slightly and average wages for nonsupervisory employees were unchanged during the first three months of 2025, according to the US Bureau of Labor Statistics. Child care industry revenue increased 2.3% year over year and 1.7% quarter over quarter during the fourth quarter of 2024, according to the US Census Bureau. Child care center sales are forecast to grow at a 4.89% compounded annual rate from 2025 to 2029, faster than the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund, Inc.