Watch CBSN Live

The Childcare Money Gap

As she works each weekday at a cheerful Nashville preschool, Shauntel Pullen knows all too well where her own children are - staying home with relatives and watching too much TV. She can't afford childcare for them.

"They're just sitting around, picking up a lot of things they don't need," Pullen said. "They're missing the benefit of childcare - learning things that equip them better for life later on."

Pullen, a 28-year-old single mother, is one of hundreds of thousands of low-income American parents who want childcare for their children, but can't foot the bill. Like Pullen, many are trying to make the switch from welfare to work and say the lack of affordable, quality childcare is the biggest headache they face.

Advocacy groups estimate that only one in seven children eligible for childcare assistance under federal rules actually receives it.

Many states have long waiting lists of low income families seeking subsidies and yet are cutting back on assistance because of budget problems.

"There are so many competing needs, vying for the same dollars," said Gina Lodge, Tennessee's commissioner of human services. "But childcare is so important: it's the difference between just being baby-sat and getting educational development."

With most states in deep financial trouble, federal funding - about $4.8 billion per year - is crucial to major childcare programs. Democrats and some moderate Republicans in Congress say a multibillion dollar funding increase is needed, while the Bush administration contends that most states could meet childcare needs with money they have saved through welfare-to-work programs.

One proposal endorsed by the Senate Finance Committee would add $200 million in childcare funding annually over the next five years. Some childcare advocates say this proposal would actually result in 430,000 children losing assistance because it doesn't keep pace with rising cost of services.

While funding levels are debated in Washington, states are cutting back. In Alabama, the budget for state-subsidized childcare is being reduced by about 30 percent, a move which may force some day care centers to close and others to dismiss employees. In Arizona, officials this month set new income thresholds that will make it harder for low income parents to qualify for subsidies.

"States are not doing these things because they don't like kids - they're doing them because they're out of resources," said Jennifer Mezey of the Center for Law and Social Policy, a liberal research group.

In Tennessee, a state with worse-than-average budget problems, more than 22,000 children eligible for subsidized childcare are on a waiting list, and officials acknowledge that the actual number of needy families is much greater.

Anne Adkisson, a 39-year-old single mother from Knoxville, recently lost the childcare subsidies that she had been receiving for 18 months as she moved off welfare and took a job at an assisted-living center.

She now leaves her 2-year-old daughter with a friend who has no childcare training and has to leave work early to pick up her 9-year-old son at school because he no longer has after-school care.

With the subsidies, Adkisson had been contributing about $30 a week out of her own pocket for childcare. Without the help, she would have to pay about $125 a week - impossible on her salary of $8.66 an hour.

"I teach my daughter what I can, but I don't have a lot of time," Adkisson said. "She's missing out on lessons with the other kids, being taught not to be stingy, how to interact."

One option would be to go back on welfare, thus gaining a higher priority for childcare subsidies. But Adkisson would have to give up her full-time job to qualify, and shelve her dreams for self-sufficiency.

"It seems they don't want to help the people out there really working and trying to get ahead," she said.

Single mothers aren't the only ones hit by the childcare squeeze. Many low-income couples earn too much to qualify for subsidies, but too little to afford quality care for their children.

For example, Vincent Shinault - in a good week - sometimes earns $400 from his job hauling trash in Nashville. But he and his wife, Toni, have six children, and they recently lost a subsidy that enabled them to send their 3-year-old triplets to a top-notch preschool program near their apartment.

"That was home away from home for my kids," said Toni Shinault, 33. "It was hard for them and me to have to pull them out. My heart was just ripped apart."

Childcare providers in Tennessee and other states who serve low-income families see the dilemmas firsthand. Ginger Woods-Oguno, director of the Tomorrow's Leaders preschool where Shauntel Pullen works, has had to close two classrooms and shorten her staff's working hours because dozens of children have withdrawn following cutbacks in subsidies.

"The kids go into unregulated care, where you don't even know what's going on," Woods-Oguno said. "There might be 15 kids in a home that's not checked by anyone - you don't know what they eat, what kind of people are going in and out of there."

As politicians weigh difficult budget choices, advocates of quality child-care urge them to take a long-term perspective.

"Early childhood education is the best chance we have to break the intergenerational cycle of poverty," said Linda O'Neal, executive director of the Tennessee Commission on Children and Youth. "We as a society have to realize it's one of the best investments we can make."

By David Crary