Congress is currently developing the Federal Fiscal Year 2025 (FY2025) Budget and updating tax policies to meet revenue and expenditure obligations, ensuring the country and programs that serve its citizens continue operating in the years to come. These financial measures dictate how resources are distributed and shape the future of vital programs, including those that support early childhood development. Understanding the evolution of funding policies can equip stakeholders with the necessary information to advocate for measures that lay the foundation for children’s growth and success, ensuring they are sustained and adequately funded.
While “a nation's budget is a reflection of its priorities and values,” it is evident that state and federal investment in early childhood development, particularly for infants and toddlers, remains alarmingly low. Federal spending on children aged 0-3 accounted for only 1.66%, 1.52%, and 1.99% of total spending in fiscal years 2023, 2024, and 2025 (projected), respectively. The first three years of life are crucial for brain development and foundational for developing skills, yet public investments for provisions that impact children during this period are most lacking. Additionally, most families lack the resources to bridge the gap between public funding and actual needs underscoring the necessity for intentional investment in early childhood development.
Understanding the Federal Budget and Tax Policy Process
The federal budget must be passed by Congress and signed by the President by September 30th each year to ensure annual spending for the next fiscal year can begin on October 1st and avoid a government shutdown. As the process for formulating the FY2025 Budget is underway, there are questions about whether lawmakers will meet this constitutionally mandated deadline. Many predict Congress will pass a temporary spending bill, known as a continuing resolution, to maintain federal programs at current funding levels, allowing the government to continue operating without formal funding legislation.
In addition to the fiscal year budget, federal tax policies dictate tax funding provisions to operate the country and support programs and services that impact citizens. These policies outline how taxes are collected, determine tax rates, define taxable income, and specify tax credits and deductions for individuals and businesses. Each year, the Federal Administration develops tax proposals which are introduced as a bill in Congress. This bill is reviewed, debated, and modified by both the House of Representatives and the Senate. After Congress agrees on the final bill, it is sent to the President to be signed into law. Throughout the process stakeholder input including from advocates industry representatives ,and general public ensures range perspectives considered shaping nation’s tax policies.
Pending Funding Policies and Early Childhood Development
As Congress negotiates annual budget tax policies several critical early childhood development measures at stake Federal support these programs essential lack investment would significantly impact children's early learning health access vital resources necessary their development future success Examples programs under consideration budget tax policy negotiations including current projected funding provisions include:
Child Care Development Block Grant (CCDBG):
Currently funded at $8.75 billion for FY2024 an increase $725 million over FY2023 Proposed amount House Representatives FY2025 funding bill = $8.8 billion Proposed amount Senate FY2025 funding bill = $10.35 billion
Head Start Early Head Start:
Currently funded at $12.27 billion FY2024 an increase $275 million over FY2023 Proposed amount FY2025 funding bill = $12 .3 billion
Preschool Development Grant (PDG):
Currently funded at $315 million FY2024 level funding from FY2023 Proposed amount FY2025 funding bill = $250 million
IDEA Grants Infants Toddlers:
Currently funded at $540 million FY2024 level funding from FY2023 Proposed amount FY2025 funding bill = $540 million
Maternal Infant Early Childhood (MIECHV) Home Visiting:
Funded five-year cycle at $434 .7 million in 2023 highest level federal investment over decade Next funding reauthorization cycle scheduled 2027
Tax Credits Benefit Children:
Child Tax Credit (CTC) provides direct funding parents allowing them afford expenses essential children’s well-being Child Dependent Care Tax Credit (CDCTC) only tax credit directly helps working parents offset cost child care There proposed Senate tax bill includes expanding CTC help more families
In closing federal budget tax policy consist more than just numbers—they signify our nation’s investment priorities values As debates negotiations Washington D C continue crucial policy makers keep needs youngest citizens forefront Early childhood development not merely expenditure but investment our collective future Nationwide advocacy efforts must persist push for funding policies prioritize well-being development all children particularly during critical first years life In late July advocates early childhood development gathered Alliance For Early Success's State Fed Connects Meeting gaining key insights from policy experts congressional leaders ACNJ brought these strategies Capitol Hill advocating crucial investments #early learning #childcare family support programs #fy25budget For information Congressional activity including upcoming House Senate sessions access pending legislation visit https://www.congress.gov/
