“Kids’ Share”: More Analysis of Federal Spending on Children
What will happen to state and federal budgets for programs that serve children once ARRA stimulus money runs out? That was the question posed at an event at the Urban Institute in Washington, D.C., last Thursday where researchers were joined by officials from the House Budget Committee and the Office of Management and Budget to release a new report about government spending on children.
Panelists at the event agreed that funding from the American Recovery and Reinvestment Act of 2009 has averted disastrous cuts to spending on federal and state programs. There was concern, however, about the future: Eugene Steuerle, a fellow at the Urban Institute, described the predicament as the “short table cloth trick,” whereby the federal government will have to try to spread the budgetary “table cloth” wide enough to make room for all domestic spending programs.
“There’s just not enough money for all these programs,” Steuerle said. “And children are the leftover part of the budget.”
One source of relief could come from health care reform, according to Robert Gordon, an associate director at OMB, who explained that, as health care has grown to account for an increased share of domestic spending, there is reason to hope that a decrease in health care spending could free up money for programs that are spent on children. New federal funding for home visitation programs is also included in the current health care reform bill — the prospect of which cheers many advocates for early childhood programs.
The report discussed on Thursday — the third annual Kids’ Share analysis of federal expenditures on children — estimates federal spending on children in recent years based on 2008 expenditures. (The data was released in May of 2009 in the Budget Appendix to the President’s Budget for FY 2010.)The report offers some interesting information on trends in federal spending. (It does not include funding from the ARRA stimulus):
- From 1960 to the present, outlays on children have increased in dollars and as a percentage of Gross Domestic Product. However, children are receiving a smaller share of the overall domestic federal budget. Between 1960 and 2008, the percentage of GDP spent on children rose from .6 percent to 2.1 percent—but declined as a share of domestic federal spending from 20 percent to 15 percent.
- In 2008, the largest federal spending programs for children were Medicaid, food and nutrition programs, and Temporary assistance to Needy Families (TANF). The report states that the child tax credit, Medicaid, and the Supplemental Nutrition Assistance Program (SNAP, which most of us know as food stamps) had particularly high expenditures in 2008 as early responses to the recession.
- State expenditures on children’s programs are not distributed evenly across the ages of childhood. Since 2004, state spending has increased substantially as children get older (from an average $942 annually per capita on children birth to age 2, up to an average $7,920 annually per capita when kids are between the ages of 6 and 11). Federal spending, on the other hand, remains relatively constant, fluctuating between an average of $3,179 and $2,863 per capita from birth to age 18.
- As of 2004, states and localities accounted for 68 percent of spending on children 0 to age 18. But for very young children — birth to age 2 — more than three quarters (77 percent) of spending comes from the federal government.
The report makes several predictions for future trends. Perhaps the most harrowing is that, if policies go unchanged, spending on children as a percent of GDP will decrease over the coming decade while non-child portions of Medicare, Medicaid, and Social Security will increase by an estimated 2.3 percentage points. That increase alone, the report says, is larger than the entire projected 2019 federal budget for spending on children.
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