Freezing Child Care Funding Throws the Baby Out with the Bathwater

In the South, there is an idiom that says, “Don’t throw the baby out with the bathwater.” It means not discarding something valuable while trying to eliminate something harmful. The Department of Health and Human Services’ (HHS) proposed response to unsubstantiated child care fraud allegations in Minnesota risks doing exactly that.

The Department of Health and Human Services (HHS) has frozen child care and family assistance grants in five states, and reports indicate that this action may be extended nationwide. Fraud at any level is wrong and should be thoroughly investigated, and once proven to be true, addressed. However, freezing child care payments and family assistance grants based on the views of a single social media “influencer” is an overcorrection that threatens the stability of child care programs and leaves families without care options through no fault of their own.

Across the nation, Americans rely heavily on child care. According to the Center for American Progress, nearly 70 percent of children under age six had all available parents in the workforce in 2023, underscoring how essential child care is to family and economic stability.

Child care funding, therefore, is not optional. It is a necessity that must remain stable and predictable.

Without consistent funding, child care operations are forced to significantly reduce capacity, and some are forced to close altogether. In 2025, a longtime family child care owner made the difficult decision to close her business after state budget cuts eliminated critical child care funding. While this example reflects a state-level funding failure, the impact is the same. When funding becomes unreliable, as is the case with the current funding freeze, child care business owners, employees, parents, and children all suffer.

The economic consequences extend well beyond families. According to the U.S. Chamber of Commerce, when parents cannot find or afford child care, they are pushed out of the workforce, and businesses lose skilled employees. Child care gaps disrupt staffing across industries and cost states an estimated $1 billion annually in lost economic activity.

Child care is no longer just a family issue. It is an economic issue. It is one of the few sectors that directly affects every other industry. At a time when women are being encouraged to have more children, a strong support system must also exist, and that includes consistent, reliable child care funding.

Misuse of government funds is not a new concept. During the COVID-19 pandemic, more than $200 billion in federal relief funding across programs was reportedly misused. Fraud occurs in every industry, and no system is immune to it.

If allegations of child care fraud are substantiated, safeguards should absolutely be implemented to prevent future misuse; however, freezing child care funding would further delay payments to a sector already plagued by late reimbursements, disrupt services for children and families, and destabilize small businesses that operate on thin margins.

The solution is straightforward. Strengthen oversight to mitigate risk, without punishing the entire field. We must acknowledge that the vast majority of child care programs operate in good faith and in compliance with the law, providing care to millions of children nationwide. According to a 2020 report by the United States Government Accountability Office, only seven states since 2013 have had errors in more than 10 percent of their child care fund payments.

Yes, accountability matters, but solutions must be precise and measured. Sweeping actions based on unsubstantiated claims destabilize the entire child care system. When child care collapses, families lose care, caregivers lose income, small businesses close, and the economy suffers.

We can strengthen safeguards without dismantling the system that families and the economy depend on. We can address misuse if and where it exists. But we cannot afford to throw the baby out with the bathwater.

Eboni Delaney is the Director of Policy and Movement Building at the National Association for Family Child Care (NAFCC), and a Public Voices Fellow of the OpEd Project in Partnership with the National Black Child Development Institute.