Families remain concerned amid pause in federal child care funds

Marilynda Bustamante, mother of 2-year-old Serenity, is starting her final semester as a graduate student in social work at USC.

Five days a week, she relies on child care that is subsidized by a combination of state and federal funds. The help has meant her daughter is growing up in a safe environment while she works toward earning her degree.

That child care, however, is under threat. The Trump administration has attempted to freeze roughly $10 billion for child care, social services and welfare in five states, including California. State attorneys general filed suit last week in the U.S. District Court for the Southern District of New York. They were quickly granted a temporary restraining order, pausing the federal government’s efforts.

But for Bustamante, any pause in child care funding, however temporary, could destabilize her life, she said.

“Just because the funding is paused doesn’t mean my life pauses,” said Bustamante, 30, who experienced homelessness while pregnant. “I can’t pause; there’s no choice. I live day to day, hour to hour, minute to minute. If I fail or make one single mistake, it’s over for me, and we’re back on the street.”

Bustamante relies on a host of social services — a home visiting program that offers parenting support, a $900 monthly stipend she uses to cover basic needs such as rent and diapers, child care for her daughter, access to a mental health therapist, and food benefits.

“I can confidently and proudly say, ‘I think I’m a pretty damn good mom.’ Am I perfect? No. But I don’t know how good of a mom I would be if I couldn’t have anybody to talk to,” Bustamante said about the services she receives. “CalWORKs gives me somewhere safe to go, and through therapy I’m able to figure out how to build safe, healthy, positive connections that maybe I wasn’t as sure how to do before.”

The federal administration has alleged fraud in five Democrat-led states, including California, following a viral video published in December by a right-wing influencer claiming he had uncovered new fraud by child care providers in Minnesota. The state has investigated dozens of fraud allegations over at least a decade.

“I get that fraud can happen. I’m sure it’s very rare. And I understand that systems need to be audited, and I support that,” she said. “But at the end of the day, I still have to feed my daughter, pay rent, get to school, do my homework, go to my internship, go to my job.”

Bustamante receives many of the services via CalWORKs, California’s version of the federal Temporary Assistance for Needy Families program, known as TANF. The program is one of three targeted by the Trump administration amid allegations of “extensive and systemic fraud.”

Long-standing fraud investigations in Minnesota have centered, in part, on the state being billed for services not rendered. California Attorney General Rob Bonta said last week that the accusations by the federal administration about widespread fraud by California child care providers are “baseless.”

Even if the temporary restraining order were to be lifted, families are not likely to immediately be cut off from their services, said Laura Pryor, research director with the California Budget & Policy Center.

“The temporary restraining on the freeze is a huge sigh of relief, and providers and parents don’t need to worry at this very moment about being able to access their subsidies or being able to get their reimbursement from the state,” Pryor said.

But, she added, if California is placed into a “worst-case scenario” where federal funding for early care and education is removed, “it really exacerbates an already underfunded system.”

In 2024, over 2.1 million children in California were eligible for subsidized child care, but just 16% — or 349,000 — were enrolled in subsidized programs, according to a data analysis by the California Budget & Policy Center.

In the 2020-21 fiscal year, Gov. Gavin Newsom’s administration promised funding for over 200,000 additional subsidized child care slots by 2026-27. The governor has not met these numbers, Pryor said.

A freeze on the federal child care funds would “put the state in an even more precarious place with being able to address an already under-resourced system,” Pryor added.

The high cost of removing child care support

Bustamante wasn’t planning on being a single parent, she said, so she wasn’t financially prepared to care for a newborn on her own. Until then, she lived in Los Angeles, where she moved from Orange County to attend UCLA. While there, she completed her bachelor’s degree in gender studies, Chicano studies, and education studies.

But shortly after becoming pregnant with Serenity, she had to move into a homeless shelter, stopping her work as an admissions adviser at an allied health vocational college just two weeks prior to her daughter’s birth.

They left the shelter when Serenity was 2 months old after being placed in a rapid rehousing program that provided a subsidy that initially covered rent in full and, in time, would be reduced as she got back on her feet.

She became ineligible for the rapid rehousing program once she became a full-time student in 2024, but has managed to braid together resources from various social services to cover her and her daughter’s basic needs.

For example, she receives a $30 monthly stipend for diapers directly from CalWORKs and about a week’s worth of diapers each month from the home visiting program. When pieced together with income from her part-time job as a research assistant at USC, she can regularly cover additional diaper costs.

Bustamante is just one semester away from graduating. Her schooling is funded with a combination of loans, scholarships and stipends, including one granted twice to her by the California Department of Health Care Access and Information.

The terms for that state-funded stipend include completing her degree and a commitment to work for a year as a behavioral health care provider in a publicly funded California program. If Bustamante doesn’t complete her degree, she might have to repay those two stipends, which were $25,000 each, she said.

Those details were on Bustamante’s mind as she heard the news regarding a potential freeze on child care funds.

She described the domino effect of losing child care could have on her life. “Unfortunately, if I don’t get my degree, because I have to drop out because CalWORKs ends because child work ends, I can’t complete that promise, and then I’m going to be stuck with $50,000 in debt that I have to pay back and no degree, nothing to show for it.”

For now, Bustamante is moving forward, taking it day by day as she inches closer to her graduation date.