Budgets, Children, and Political Priorities

It’s budget season in Washington, D.C. again! Or, well, what passes for budget season in an era of legislative lockjaw, periodic shutdowns, sequestration, and so forth.

We hear plenty about the various culprits for federal paralysis as far as legislating, appropriating, and governing are concerned. Is it a product of particularly polarized partisan divisions? Recession-fueled obsession with deficits and austerity?

This is particularly frustrating for folks working in and around early education. Given what we know about the long-term effects of investing in children, it seems obvious that programs for them should be critical budgetary priorities. But that doesn’t seem to be the way things are currently heading—as my colleagues Clare McCann and Abbie Lieberman recently pointed out.

Yesterday, the Urban Institute held a fascinating event on just this topic: “How Our Current Budget Priorities are Shaping Our Children’s Future.” The panel discussion was pegged to the annual release of their Kids’ Share Report on Federal Expenditures on Children—and it included New America senior research fellow Ruby Takanishi.

Given current budget agreements and non-discretionary funding commitments, the report estimates that children’s share of the federal budget will fall below 8 percent in the next decade.

The report makes clear that politics aren’t the only factor influencing Congress’ ability to increase investments in kids. Longstanding budgetary trends only add to the difficulty. The authors found that federal spending on kids (birth to 18) came out to about 10 percent of the budget, which was an increase from last year, but still a decline from 2010—when President Obama’s stimulus bill briefly brought that figure to 11 percent. (Note: other analyses of federal spending on children have come to similar conclusions.)

But that timeslice wasn’t the event’s primary focus. Given current budget agreements and non-discretionary funding commitments, the report estimates that children’s share of the federal budget will fall below 8 percent in the next decade. The authors broke these data out in other ways: as a share of GDP, federal spending on children will go from 2.1 percent this year to 1.7 percent in 2024. (For a PDF of slides from the event’s opening presentation, click here.)

In a blog post following the event, the Urban Institute’s Gene Steuerle put it this way:

No one votes formally to cut the kids’ share of the pie. They simply allow other shares to increase, driven by laws set in motion years and decades ago. Our priorities mainly revolve around ever more money for health, retirement, and tax subsidies, along with taxes so low that our children also get left with those bills and the higher interest costs that accompany them.

This echoes the analysis in Steuerle’s new book, Dead Men Ruling. In the book, he argues that inflexible funding promises from past legislators are growing to lock up such a high percentage of our budget that present and future legislators have little discretionary funding to dedicate to their own priorities—like early education.

The panel discussion mostly adopted this framing. Brookings’ Ron Haskins and others pointed out that benefits for older Americans aren’t just growing as a share of the budget, they’re also growing on a per capita basis. That is, we spent around $4,000 (per capita) on the elderly in 1960, and $28,000 (per capita) in 2011. So long as this sort of growth continues, we should expect it to be very difficult to find more fiscal space to invest more in kids.

Miriam Calderón, a senior partner at School Readiness Consulting, joined Ruby in arguing that we should be careful of thinking of early education investments and old age programs as a zero-sum situation. That is, while we should certainly consider reforms to stabilize current spending trends, these should be coupled with tax and budget reforms that also raise additional revenues. Federal taxes are, after all, at historically low rates as a percentage of GDP. To put it another way, it’s not that we “don’t have the money” to invest in kids. It’s that we simply haven’t yet decided that we’re willing to pay reasonable taxes that would allow us to do so.

For reasons political and economic, the balanced approach of budget reforms and increased taxes is probably the way to go. But if that sounds like a moderate position that might break the logjam, keep in mind that past efforts to push that sort of a mix haven’t exactly panned out.