Childcare Bill Tracker: Federal, State, and Regulatory Moves

A childcare bill tracker for the 119th Congress and the 2025–2026 state sessions shows activity on four fronts at once: sweeping federal proposals to cap what families pay, narrower tax credit expansions, Republican-led fraud crackdowns on existing subsidies, and a wave of state laws filling gaps left by expired pandemic funding. Nearly 1,900 early childhood bills were introduced across state legislatures in 2025, and 326 were enacted.¹ At the federal level, several major bills are pending in committee while regulatory action from the executive branch has already reshaped the subsidy landscape.

Federal Bills to Cap Costs and Expand Access

Child Care for Working Families Act

Reintroduced on July 15, 2025, by Senator Patty Murray and Representative Bobby Scott, along with Senators Tim Kaine, Mazie Hirono, and Andy Kim and Representatives Katherine Clark and Summer Lee, this is the most comprehensive federal childcare bill in play.² It would cap childcare costs at 7% of family income and eliminate costs entirely for families earning below 85% of their state’s median income. Between those points, families would pay on a sliding scale: up to 2% of income at 85–100% of state median, 2–4% at 100–125%, and 4–7% at 125–150%.³

The bill also puts $9 billion per year in mandatory funding into “Building an Affordable System for Early Education” (BASE) grants, requiring at least 70% of subgrant money go to personnel costs. States would have to set payment rates that match what elementary school teachers with similar credentials earn. A separate $20 billion pool funds universal preschool for three- and four-year-olds through a mixed-delivery system including Head Start and licensed centers.³ Sponsors say a family earning the state median would pay no more than $15 a day under the framework.²

Child Care for Every Community Act

Introduced by Representative Alexandria Ocasio-Cortez as H.R. 5658 and Senator Elizabeth Warren as S. 2939, this bill uses a sliding-scale fee structure modeled on the U.S. military’s childcare system, aiming to have half of families nationwide pay no more than $10 a day.⁴ The Senate version was referred to the Committee on Health, Education, Labor, and Pensions in September 2025 and has not advanced further.⁵

Child Care Modernization Act

Introduced June 9, 2026, by Representatives Ryan Mackenzie, Kristen McDonald Rivet, Ashley Hinson, and Susie Lee, with a Senate companion from Senator Deb Fischer, this bipartisan bill takes a different approach: rather than creating a new entitlement, it reauthorizes and updates the existing Child Care and Development Block Grant.⁶ It funds construction and renovation of childcare facilities, directs states to update reimbursement rates to reflect actual costs, reduces regulatory barriers for small, rural, and home-based providers, and allows states to seek more flexibility on income eligibility caps.⁷

Tax Credit Bills

Several bills would work through the tax code rather than direct subsidies. The Child Care Availability and Affordability Act (S. 847 / H.R. 1827), from Senators Tim Kaine and Katie Britt, would make the Child and Dependent Care Tax Credit refundable for low- and middle-income families and raise the maximum from $1,050 to $2,500 for one child and from $2,100 to $4,000 for two or more. It would also raise the employer-provided childcare credit (Section 45F) cap from $150,000 to $500,000, increase the covered percentage from 25% to 50% (60% for small businesses and rural areas), and boost the Dependent Care Assistance Plan limit to $7,500.⁸

The Affordable Child Care Act (H.R. 1408) would double the maximum CDCTC to $6,000 for one child and $12,000 for two or more. The Promoting Affordable Childcare for Everyone (PACE) Act (H.R. 2900) would make the credit refundable and index it to inflation.⁸ Separately, the Republican Study Committee’s budget framework proposed removing the work requirement that prevents families with a stay-at-home parent from claiming the CDCTC, framing the change as eliminating a marriage penalty.⁹

Fraud and Program Integrity Bills

Republican leadership has focused on tightening oversight of the existing CCDBG program rather than expanding it. On March 5, 2026, the House Education and Workforce Committee passed eight oversight bills, six along party lines and two unanimously.¹⁰ Those bills were bundled into H.R. 7726, the Stop Child Care Scams Act of 2026, which passed the full House on June 3, 2026. The package requires states to track and report fraud separately from other payment errors, sets a 5% improper payment threshold with penalties above it, mandates regular audits of chronic violators, bars fraudulent providers from participating in multiple federal programs, and imposes funding consequences on states that fail to address repeat violations.¹¹

In the Senate, Chairman Bill Cassidy and Senator Tommy Tuberville released a “Child Care Program Integrity” discussion draft on March 18, 2026. It would designate states with improper payment rates above 9% as “high-risk,” cut the asset limit for subsidy eligibility from $1 million to $500,000, eliminate self-attestation for income verification, and require that providers be paid based on verified attendance using electronic authentication. States that misspend funds would face a 5% penalty fee on top of repayment.¹² Cassidy’s committee has specifically named Minnesota, New York, Oregon, and Michigan in its investigations and sent letters to additional states with error rates above 10%.¹³

Regulatory Changes Running Alongside the Bills

While Congress debates, the executive branch has already changed the rules.

CCDF Final Rule Rollback

On May 12, 2026, the Department of Health and Human Services published a final rule rescinding four requirements from a March 2024 regulation. Effective July 13, 2026, the rollback eliminates the federal 7% cap on family copayments for subsidized care, removes the requirement that states pay providers based on authorized enrollment rather than daily attendance, ends the mandate for prospective payments to providers, and strikes the requirement that states provide direct services through grants or contracts for infants, toddlers, and children with disabilities. HHS cited concerns from 55 of 56 states and territories about cost and implementation, along with Executive Order 14192 on deregulation.¹⁴

Funding Freeze and Court Injunction

In January 2026, the Trump Administration placed New York, California, Minnesota, Illinois, and Colorado under “restricted drawdown” status, freezing their access to CCDF, TANF, and Social Services Block Grant funds under a policy called “Defend the Spend.” The five states sued, and on February 6, 2026, Judge Vernon S. Broderick of the Southern District of New York granted a preliminary injunction requiring continued funding, finding the states likely to succeed on their Administrative Procedures Act claims.¹⁵ The injunction remains in effect as of the court’s March 10, 2026, opinion, and the litigation is ongoing.

FY2027 Budget Proposal

The President’s fiscal year 2027 budget, released in April 2026, proposes flat funding for CCDBG ($8.831 billion) and Head Start ($12.357 billion). It would eliminate the Preschool Development Block Grant Birth Through Five and the Child Care Access Means Parents in School program, while increasing early intervention funding by $50 million to $590 million. For Head Start, the budget would allow individual state licensing standards, including child-to-staff ratios and group sizes, to replace federal Program Performance Standards.¹⁶

Workforce Bills

The national average wage for early childhood educators is about $15.42 per hour, and about 22% of educators surveyed in January 2026 said they were considering leaving the field within a year, though more than half of those said better wages, benefits, and student loan forgiveness would keep them.¹⁷ Several bills target that pipeline directly.

The Early Childhood Workforce Advancement Act, reintroduced in May 2026 by Senator Jeff Merkley and Representative Lucy McBath, would award grants to partnerships of colleges, childcare providers, and workforce training programs to build career and technical education pathways into early childhood education. Co-leads include Representatives Glenn “GT” Thompson, Mike Lawler, and Jen Kiggans.¹⁸

At the state level, Washington’s Legislature passed House Bill 1128 in March 2026, creating a Child Care Workforce Standards Board tasked with recommending minimum standards for wages, working conditions, and staffing.¹⁹ Michigan launched a $16 million pilot providing monthly stipends of $200 to $300 for educators, Pennsylvania created a $25 million retention and recruitment program, and Arkansas made early childhood workers eligible for the state teacher retirement system.²⁰

State Enactments

With federal expansion stalled and pandemic-era stabilization funding expired since September 2023, states have been moving on their own.²¹ Four patterns dominate the 2025 sessions:

Direct state investment. Arizona committed $45 million to its subsidy program, Massachusetts allocated a record $1.06 billion, Wisconsin funded its first entirely state-supported childcare initiative at $66 million, and Texas directed $100 million in unexpended TANF funds toward a 95,000-child waitlist.²⁰
New funding streams. Connecticut created an Early Childhood Education Endowment funded by budget surpluses, Louisiana raised its online sports wagering tax for its early childhood fund, and Washington expanded its capital gains tax to support education.²⁰
Employer tax incentives. Utah enacted a 20% credit for facility construction and renovation, North Dakota offered a credit equal to 50% of an employer’s contribution to employee childcare costs, and Missouri and Ohio adopted three-way cost-sharing models splitting expenses among state, employer, and employee.¹
Licensing reform. Florida created abbreviated inspections for family homes with clean records, Maine allowed providers to operate without private outdoor space if public space is nearby, and Oklahoma limited local fire and safety requirements to those matching the International Building Code.¹

Connecticut’s Early Start CT

Connecticut’s Senate Bill 1, passed in 2025, creates an Early Childhood Education Endowment initially capitalized with up to $300 million from budget surplus funds. Beginning July 1, 2027, families earning under $100,000 will pay nothing for childcare, and higher earners will pay no more than 7% of their income. The program aims to create 20,000 new childcare spaces by 2032, with at least 35% reserved for infants and toddlers.²² The bill passed the Senate 32–4 and the House 101–45.²³

North Carolina’s Regulatory Overhaul

North Carolina saw over 30 childcare bills in its 2025 session.²⁴ The legislature enacted House Bill 412 (Session Law 2025-36, effective July 1, 2025), which redefines “lead teacher” to allow one person to manage two groups of children, directs the state to plan for separating its quality rating system from subsidy payment rates, streamlines building and fire code requirements for family childcare homes, and exempts military family childcare homes with federal certification from state licensure.²⁵ A separate bipartisan bill, Senate Bill 412, proposed $123.5 million in annual funding to raise subsidy reimbursement rates, with a 10% boost for rural counties and infant and toddler programs.

The Baseline the Bills Would Change

The federal government’s primary subsidy program runs through the Child Care and Development Fund, authorized under the CCDBG Act. Under current rules, a child must be under 13 (or under 19 in certain circumstances), live with a parent who is working, in job training, or in school, and be in a household earning below 85% of the state’s median income. Family assets cannot exceed $1 million, and states may set stricter criteria within federal anti-discrimination and parental rights protections.²⁶ For fiscal year 2026, the program received $8.831 billion after an $85 million increase in the February 2026 spending bill.²⁷

The bills above would move that baseline in different directions. The Child Care for Working Families Act would replace the state-by-state patchwork with a standardized national sliding scale. The Senate HELP integrity draft would tighten eligibility verification and halve the asset limit to $500,000. The Modernization Act would reauthorize the block grant with more state flexibility. And the May 2026 CCDF final rule has already returned discretion to states on copayment levels and payment methods, running counter to what a Democratic-majority Congress would likely enact. None of the major expansion bills has cleared committee, so the practical rules families and providers face still come from the existing CCDF program as modified by the 2026 rulemaking and the pending litigation over the funding freeze.

1
NCSL. Early Childhood Has Momentum: 2025 Legislative Trends
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Office of Rep. Bobby Scott. Scott, Murray Reintroduce Child Care for Working Families Act
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House Democrats Education and Workforce Committee. Child Care for Working Families Act Section by Section
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Office of Rep. Alexandria Ocasio-Cortez. Ocasio-Cortez, Warren Team to Lower Costs, Deliver Universal Child Care
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Congress.gov. S. 2939 – Child Care for Every Community Act
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Office of Rep. Ryan Mackenzie. Congressman Mackenzie Introduces Legislation to Modernize and Improve Childcare
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First Five Years Fund. Statement on Child Care Modernization
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First Five Years Fund. Child Care Tax Legislation in the 119th Congress
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CNBC. Child and Dependent Care Tax Credit
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House Education and Workforce Committee. Committee Markup Calendar
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Office of Rep. Tim Walberg. Walberg: House Moves to Shut Down Child Care Scams
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Senate HELP Committee. CCDBG Discussion Draft
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Senate HELP Committee. Chairman Cassidy, Tuberville Unveil Discussion Draft to Eliminate Child Care Fraud
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Federal Register. Restoring Flexibility in the Child Care and Development Fund
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U.S. District Court, Southern District of New York. State of New York v. Administration for Children and Families, Opinion and Order
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NAEYC. 2027 President’s Budget and Early Childhood Education
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NAEYC. Survey on Childcare Affordability Crisis
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Office of Sen. Jeff Merkley. Merkley, McBath Lead Bipartisan Bill to Tackle Child Care Workforce Shortage
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Washington House Democrats. Legislature Passes Fosse Bill to Address Child Care Workforce Shortage
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Child Care Aware of America. State Session Round Up Summer 2025
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Office of Sen. Patty Murray. Murray, Sanders, Clark Introduce Bill to Extend Vital Child Care Funding
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Connecticut Office of Early Childhood. Early Childhood Education Endowment Listening Sessions
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CT News Junkie. House Bill Providing Free, Reduced Cost Child Care Heads to Lamont’s Desk
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EdNC. Child Care Bills Proposed in the NC 2025 Legislative Session
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UNC School of Government. H412 Bill Summary
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HHS Office of Child Care. Understanding Federal Eligibility Requirements
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Child Care Resource and Referral Network. Federal Legislation and Budget