Unstable funding hinders child care subsidy program

Federal agencies and employees shied away from the federal government's child care subsidy program last year in large part because it was only a pilot program, according to a report released last week by the Office of Personnel Management. In September 1999, Congress added language to the fiscal 2000 Treasury, Postal and General Government spending measure allowing agencies to use appropriated funds to help lower-income employees cover the costs of child care in licensed centers. But because the measure was enacted as a one-year pilot program with no guarantee of renewal, many agencies and departments hesitated to offer the subsidy to their employees, said the report, "Child Care Subsidies in the Federal Government." Agency officials also said that a lack of time and money stopped them from offering the program. In December, the program was extended for a second year. Its current legislative authority runs out on Sept. 30. Rep. Connie Morella, R-Md., introduced legislation, (H.R. 555) on Feb. 12 that would make the federal child care subsidy program permanent. "Many federal employees simply cannot afford quality child care," Morella said on the House floor in February. "By allowing agencies the flexibility to help workers meet their child care needs, we will be encouraging family-friendly workplaces and higher productivity." During the first year of the program, eight agencies and departments offered subsidies. They included the CIA, General Services Administration, Food and Drug Administration, OPM and the departments of Education, Energy, Health and Human Services and Labor. The second year brought another seven agencies on board, including the departments of Interior, Housing and Urban Development and Veterans Affairs, as well as the U.S. Mint, Farm Credit Administration, Pension Benefit Guaranty Corporation and the IRS. The Defense Department has had authority to subsidize child care expenses since 1989. To encourage agency support of the program, OPM provided guidance on five different eligibility models. Most agencies offered the service to their employees on a sliding scale based on total family income, the report said. As of Feb. 15, more than 815 federal workers were taking advantage of the subsidy program, the report said, with several hundred applications pending approval. But fewer employees applied for the subsidy than expected, OPM found. Many workers were reluctant to change arrangements for fear they would not be able to afford the child care centers if the subsidy program were shut down. Others didn't apply because the subsidy wasn't big enough, the report said. "We believe that federal agencies have a good understanding of the importance of employer-provided child care subsidies for their employees. Throughout this process, OPM was never told that subsidies were not a good idea," the report said.