Trends in Child Care Spending from the CCDF and TANF, Karen E. Lynch, Specialist in Social Policy. June 16, 2016.

“The Child Care and Development Fund (CCDF) is the main source of federal funding dedicated primarily to child care subsidies for low-income working families. The term “CCDF” was coined in regulation by the U.S. Department of Health and Human Services (HHS) to encompass multiple child care funding streams, including:

• federal discretionary child care funds authorized by the Child Care and Development Block Grant (CCDBG) Act,
• federal mandatory child care funds authorized by Section 418 of the Social  Security Act (sometimes referred to as the “Child Care Entitlement to States”),
• state maintenance-of-effort (MOE) and matching funds associated with the Child Care Entitlement to States, and
• federal funds transferred to the CCDF from states’ Temporary Assistance for Needy Families (TANF) block grants.

Mandatory and discretionary CCDF funds are appropriated separately and are allocated to states using different formulas. Although these funds are allocated to states in different ways, federal law generally directs states to spend these dollars according to the same CCDBG Act rules. TANF funds transferred to the CCDF are also subject to CCDBG Act rules. States spent roughly $8.6 billion from these combined federal and state funding streams in FY2012, the most recent year for which data are fully available.”