me parents and as an investment in the education and development of children. On these grounds, the federal government provides support for childcare through tax credits, direct block grants, and supportive services. The largest source is the nonrefundable Dependent Care Tax Credit, which offsets the working parent's childcare expenses via the tax system ( ). Most of the 6 million families receiving this credit are middle and upper class income, since the credit is not available to families too poor to pay taxes.PRWORA fundamentally changed federal child care assistance programs for low-income families. The legislation created the Child Care and Development Fund (CCDF) by consolidating several major federal subsidy programs. Although PRWOCA has eliminated the entitlement to child care assistance as well, it also provided an increase in federal funding of 27% in its first year (Long, Kirby, Kurka, & Waters 1998). However, despite improvements in federal funding, the state have the authoritiy to independenly set the eligibility income as long as it does not exceed the federal maximum of 75% of the state medial income (SMI) (Long et al., 1998). With the exception of seven states, Program eligibility rules and provider reimbursement rates vary widely across the states and in some cases across programs within a state (Sherman et al., 1998). The current system is criticized as unnecessarily fragmented due to multiple funding streams and program rules (Long, Kirby, Kurka, & Waters, 1998). Even in states that have effectively created childcare systems that are "seamless" to the families served, the system is complex and difficult to administer. Texas has maintained a waiting list of 40,000 poor children for daycare and California has maintained a waiting list of 225,000 poor children with low income mothers waiting up to two years to receive child care subsidy (Sherman et al., 1998).Another factor that discourages many welfare re...
