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Contact: Ed Walz
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Urban Institute Report: Sharp Drop in Federal Investments in Children

Federal Budget

Washington – An analysis released today by the nonpartisan Urban Institute shows that federal investments in America’s children dropped $28 billion, or 7 percent, from 2011 to 2012 – the largest year-to-year percentage decline since the early 1980s. The report, Kids’ Share 2013: Federal Expenditures on Children in 2012 and Future Projections, was commissioned by First Focus and written by Urban Institute researchers Julia Isaacs, Sara Edelstein, Heather Hahn, Katherine Toran, and C. Eugene Steuerle.

“Some might say Congress is walking away from its commitment to our nation’s children, but these numbers show they’re now running,” said First Focus President Bruce Lesley. “The last time we saw a year-to-year drop this big, Star Wars was still a trilogy, and MTV still played music videos.”

Kids’ Share 2013 finds that much of the decline to the exhaustion of funding provided under the American Recovery and Reinvestment Act (ARRA). The 2009 economic stimulus law directed nearly one-fourth of its funding to education, children’s health, child abuse and neglect prevention and response, and other children’s priorities.

“While we would expect spending to decline in the wake of a recession, children’s programs have seen more of a drop than overall federal spending,” said Julia Isaacs, an Urban Institute senior fellow. “Because of the slow economic recovery, spending on children was dropping at a time when many families were still struggling to make ends meet.”

The authors also found that, unless Congress changes current policy, federal investments in children will continue to fall, as a share of the budget, through 2023. Key projections through 2023 include:

  • Of every increased dollar of federal spending, children will be allocated less than two cents;
  • Medicare, and the non-children portions of Social Security and Medicaid account for two-thirds of projected increases in federal spending;
  • While health care costs and broader eligibility are projected to increase investments in children’s health, most other categories of funding for children’s initiatives are projected to fall, including a 6 percent decline in early care and education, a 8 percent drop in nutrition for children through initiatives like the Supplemental Nutrition Assistance Program and the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), and a reduction of 16 percent in K-12 education; and
  • Funding for children through tax policy will also decline, as inflation erodes the real value of the Child Tax Credit.

Congress will soon face several policy debates with direct bearing on future federal investments in children:

  • Tax Reform – Tax policy accounts for nearly 40 percent of federal investments in children, and the upcoming federal tax policy debate provides an opportunity to strengthen tax policies that protect millions of children from poverty;
  • Children’s Health Insurance Program (CHIP) Reauthorization – The Children’s Health Insurance Policy and Medicaid provide health care for millions of children who would otherwise be uninsured, but CHIP funding will end on October 1, 2015, unless Congress acts to extend and enhance it;
  • Child Nutrition – About half of Supplemental Nutrition Assistance Program (SNAP, formerly Food Stamps) funding goes to children, and the ongoing Farm Bill that debate provides an opportunity to protect SNAP for kids; and
  • Reverse Sequestration – Upcoming fiscal debates provide an opportunity to reverse federal budget “sequestration,” which has imposed additional funding cuts on a wide range of children’s initiatives, including K-12 education, special education, and early education, as well as anti-hunger initiatives, child care, and child abuse and neglect prevention and response.

“The budget and policy choices Congress is making right now will shape the future for America’s children, and what this report shows is that if we want a brighter future for kids, we need action and better choices from Congress,” said Lesley.