Funding for children's programs projected to fall

August 1, 2011

Federal spending on children is expected to fall markedly over the next several years, although that funding had risen in previous years.

Federal spending on children is expected to fall markedly over the next several years, although that funding had risen in previous years.

That's because provisions under the American Recovery and Reinvestment Act of 2009 will begin to expire and because Medicare, Medicaid, and Social Security programs will continue to put upward pressure on government outlays that are expected to far outpace federal revenues, according to the Kids' Share 2011 report from the Brookings Institution and the Urban Institute.

That squeezing of children's expenditures is expected to happen despite the fact that Medicaid, for example, is in part directed to children. Projections over 10 years indicate that unless there is some policy change, spending on children will fall as a share of the budget, as a share of the economy, and in real dollar amounts.

Only once before in the last 50 years has such a decline happened, a 7% drop between 1980 and 1985. The report does note, however, that as a percentage of Gross Domestic Product, federal budget spending on children increased from 1.6% in 2000 to 2.6% in 2010.

The groups estimate that in 2010, 11%, or $374 billion, of the $3.5 trillion federal budget is devoted to children. By comparison, the parts of Social Security, Medicare, and Medicaid that do not go to children make up 38%, defense takes up 20%, and interest on the debt takes 6%, leaving 25% for all other outlays.

By 2020, the projected nonchild related parts of Medicare, Medicaid, and Social Security will grow to 43% of the budget, and the debt interest payment will grow to 14%.

When tax reductions aimed at children are added to the total, federal expenditures for children in 2010 were $445 billion. A few top programs for children make up most of that. About $74 billion goes to Medicaid. The earned income tax credit is $55 billion, and the child tax credit is about $46 billion.

The think tanks call health "a fast growing category for which children get a modest share" and that over the next 10 years health is the only children's area slated to increase. The groups also say that when state and federal funds are taken into account, as of 2008, public spending on the elderly, at $24,800 per person, was about 2.2 times that spent on children per capita.

Meanwhile, the child advocacy group First Focus has published Children's Budget 2011, a compendium of recent trends in dozens of federal programs that target children.

Federal Medicaid funds, it notes, have increased in inflation-adjusted terms by 33.6% from 2007 to 2011 to $276.2 billion. However, the Maternal and Child Health Block Grant to states has dropped by 9.2% over that period, down to $656.3 million.

In other examples, the newly created Maternal, Infant and Early Childhood Visiting Program had a budget of $100 million in 2010 , increased to $250 million in 2011.

Head Start is up 2.2% over 2007 to 2011 to $7.6 billion.

The report estimates that federal spending on children was at 7.7% of the federal budget in 2007 and increased to 9.2% in 2010 because of stimulus funds and recession-driven spending on Medicaid and the Supplemental Nutrition Assistance Program (previously Food Stamps).

However, child-related spending may slip back to 8.4% this year, according to the report.