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    "ocrText": "-9-\nprovide contracts or grants to specific providers to increase the supply of care.\nThe Personal Responsibility Act allows the Secretary of HHS to set-aside not\nless than 1% and not more than 2% for grants to Tribes. The Secretary has chosen to\nprovide a 2% set-aside for the Tribes. States must spend a minimum of 4% of the total\nCCDBG on quality activities and may spend no more than 5% on administrative costs.\nThe CCDBG is funded through both discretionary and capped entitlement grants\non the Federal level. In FY 1998, $3.1 billion was appropriated for the CCDBG. Under\nthe Personal Responsibility and Work Opportunity Reconciliation Act, funding will\nincrease to $3.7 billion in 2002. According to HHS, CCDBG served about one out of\nevery 10 eligible children in 1995, the latest year for which data are available.\nOne question that has been raised regarding the expansion of the current\nCCDBG is whether States are spending the funds which they receive under the current\nauthority. In fact, States have obligated (committed to spend through agreements,\ncontracts, etc.) over 99% of their FY 1997 funds. By law, they are not required to\nactually expend the funds until the end of FY 1998.\nChild care outlays drawn from the Federal Treasury were at 72% in FY 1997,\nhowever HHS expects all States to expend all of the funds by the end of FY 1998, as\nrequired by law. According to CBO, these outlays represent an 8% increase over FY\n1996. Further, CBO projects that the outlay rate increase will be 20% between FY\n1997 and FY 1998, indicating that States are utilizing the additional funds provided to\nthem in the Personal Responsibility Act. Although, as with many programs, States may\nbe experiencing an adjustment period to build an infrastructure to expend significant\nadditional funds, CBO does project that States will, within five years, \"catch up\" and\nspend all of their money in the year in which it is received.\nThe Child and Dependent Care Tax Credit\nThe Child and Dependent Care Tax Credit (CDCTC) is a nonrefundable credit,\nwhich equals a percentage of the taxpayer's child care expenses. The credit\npercentage begins at 30% with $10,000 of adjusted gross income and is phased down\nto 20% for taxpayers with adjusted gross incomes of $28,000 or more. The maximum\namount of eligible expenses is $2400 for one child (under age 13), and $4800 for two or\nmore children. The credit can also be taken to pay for care of a disabled dependent or\nspouse. Due to the nonrefundable nature of the CDCTC, it does not assist taxpayers\nwho earn too little to have positive tax liability. Revenue loss associated with this tax\ncredit is estimated to be $2.5 billion in FY 1998."
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