Budgets reflect what political leaders value, and our federal budget makes it abundantly clear that babies and toddlers are not the priority that they should be. In our recent analysis of the federal budget in our Babies in the Budget 2024 report, the share of federal spending for children ages 0-3 has declined for the third year in a row.
Sadly, the share of federal spending that goes to babies and toddlers has declined to a mere 1.52%, despite overwhelming evidence that money matters and investments across all aspects of their lives – health, child care, income support, housing, nutrition, and other areas – improve children’s long-term success.
Investing early in our children leads to better health outcomes, higher educational attainment, and increased earnings as adults. In an analysis to evaluate the effectiveness of 133 policy changes over the last 50 years by co-authors Nathaniel Hendren and Ben Sprung-Keyser, the findings were clear. Public investments in children often pays for itself and those investments have, by far, the best return on investments (ROI) or marginal value of public funds (MVPF).
As Hendren explained to the Harvard Gazette:
The policies that have historically invested in kids tend to be the ones that have the biggest bang for the buck. Because, oftentimes when you put in a dollar when a kid is young, it can have impact that then pays us back when those kids grow up.
Failing to invest in children limits their short-term and life-long opportunities and is costly to society. For example, the National Academy of Sciences, Engineering, and Medicine (NASEM) estimates the societal cost of child poverty to be as much as $1.1 trillion annually.
It makes no sense to cut children’s supports when we know the near- and long-term outcomes from investing in our youngest children benefit not only them, but their families, society, and the nation.
Our nation’s youngest children face challenges in every aspect of their daily lives. Consider the following:
- Child Poverty: Child poverty more than doubled in 2022 compared to 2021, with the rate of children living in poverty increasing from 5.2% to 12.4%. This increase represents more than 5 million children (exceeding the number of ALL the children in Connecticut, Iowa, Mississippi, Nevada, Nebraska, New Mexico, Utah, and West Virginia combined) that we allowed to backslide into poverty within a single year.
- Infant Mortality: The U.S. infant mortality rate in 2022, which already was much higher than in other wealthy nations, increased for the first time in two decades.
- Food Insecurity: 10% of all U.S. children (7.3 million kids) did not have enough food to keep them healthy in 2022. That is a nearly 7% increase in the number of children over the previous year. Rates of food insecurity were significantly higher for households with children that included a Black or Hispanic adult.
- Housing Insecurity: Children are at the greatest risk of eviction. Children are more than 40% of the individuals that face eviction yearly. Additionally, households with children under 5 make up the largest group of households that have had evictions filed against them.
- Health Care Coverage: Millions of children are losing health care. More than 5 million children have lost access to Medicaid through the unwinding process. In some states, such as Utah and Texas, roughly one-third (34% and 29%, respectively) of children enrolled in Medicaid have lost coverage.
Growing needs demand more investment, not less.
That’s not to say some small progress hasn’t been made. The COVID-19 pandemic served as a catalyst for investments in our youngest children, ensuring their health and safety during a tumultuous time. FY 2021 saw an almost 54% inflation-adjusted increase in spending on babies and toddlers, but as the peak of the pandemic wound down, so did congressional spending. Even at the peak, babies and toddlers’ share of federal spending still failed to reach even 2% in FY 2021.
More Evidence that Money Matters
The need to increase investment in our youngest children warrants immediate action. The downward spending trend on babies should not be tolerated.
As Dr. C. Kirabo Jackson, a member of the President’s Council of Economic Advisors, said on a recent episode of our Speaking of Kids podcast:
…there are a whole set of skills that kids are getting when they’re enrolled in high quality, early childhood education, that are not necessarily reflected in test scores, but you’re seeing it in an array of outcomes. When you measure them later on in life, you see it in terms of increased educational attainment…, you see it in terms of reduced criminality, you see it in terms of reduced incidence of things like teen pregnancy, and a whole host of things that we think matter a lot….
In terms of cutting child poverty, NASEM recommended an expansion to the Child Tax Credit and other policy changes that would cut child poverty in half. Such investments would have both short- and long-term outcomes. With respect to the long-term implications, Dr. Jackson explained that sustained investments in children that begin in the early years increases learning, increases wages and tax revenue, breaks the cycle of poverty, and thereby, has the added benefit of reducing government spending.
Just as Hendren and Sprung-Keyser found, Dr. Jackson explains:
…when you factor in the increases in taxes, and the reduction in dependence on social benefits, oftentimes these programs end up paying for themselves in the long run.
Unfortunately, as the Babies in the Budget 2024 report shows, our nation is failing to make those investments, as the federal share of spending on babies and toddlers has dropped to 1.52%.
In this year’s report, the Babies in the Budget report found major cuts to programs such as the Supplemental Nutrition Assistance Program (SNAP) and the Child Tax Credit (CTC). Nutrition programs such as SNAP and the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) are crucial in alleviating food insecurity, and the expiration of the CTC in 2022 allowed 5 million children to backslide into poverty. In FY 2024 alone, we see major cuts to SNAP and a decrease in the refundable portion of the Child Tax Credit (CTC) driving the drop in the share of federal spending on babies and toddlers.
As the research overwhelmingly shows, failure to prioritize investments in our youngest children means we are failing them and our nation’s future.
Turning the Tide
The Biden-Harris FY 2025 budget presents the nation with the opportunity to turn the tide in favor of our nation’s youngest children.
The President recommends increasing total spending on babies by $36.8 billion, which would restore the share of the spending on children ages 0-3 to almost 2%, surpassing the high in FY 2021. Both President Joe Biden and Vice President Kamala Harris have also recommended significantly expanding the Child Tax Credit to reach low-income children currently left behind because their parents earn too little. These game-changing improvements to the Child Tax Credit would increase money available for babies by almost $28 billion dollars in FY 2025.
Unfortunately, 43 senators voted on Aug. 1, 2024, to sustain a filibuster against H.R. 7024, a more limited improvement to the Child Tax Credit that would have disproportionately benefitted low-income babies and toddlers in this country.
The vote against the Child Tax Credit was greatly disappointing, but we are not going away. We must keep making the case, as Sen. Raphael Warnock (D-GA) did on the Senate floor, in favor of investing in our kids and cutting child poverty.
The President’s FY 2025 budget proposal also would make vital investments in child care, housing, paid family and medical leave, mental health, nutrition, and other areas that impact babies, toddlers, and their families.
Building a healthy, prosperous, and equitable upbringing for our babies translates directly to a healthy, prosperous, and equitable future for our country. Funding choices are just that – choices. And Congress and the Administration have the power to choose to support the well-being of children. We can and must do better by our babies and our children. It’s time to shift the momentum and move from words to action to ensure greater funding for our babies and toddlers.
The nation’s youngest deserve it.