Economic Well-being

Less than one-tenth of the federal budget was spent on children in 2008. Over the next decade, as the stimulus bill provisions expire, interest on the debt rises, and entitlement program costs grow, spending on children is projected to shrink. In light of our rapidly expanding national debt, how should the nation invest in its next generation?

Institute Fellow Rudy Penner describes how the U.S. budget is prepared by the executive branch and Congress, and how it then is implemented by the executive branch. The budget preparation process could be improved, Penner asserts, but budget implementation works smoothly and efficiently. The severe long-run budget problem the country faces is caused by only three spending programs: Social Security, Medicare, and Medicaid. All are growing faster than the economy, and there is strong opposition against raising tax burdens. Changes are suggested for the budget process so that it is better suited for dealing with this long-run problem.

Federal and state budgets are under unprecedented pressure: deficits are ballooning, programs are being cut back, and tax rolls are anemic, or worse. As part of the federal government's response to the severe recession, the American Recovery and Reinvestment Act (ARRA) cushioned state budget cuts, particularly in education, and included investments in children and families -- yet next steps after ARRA are unknown. New research by Urban Institute and Brookings Institution analysts reveals how children -- collectively and at different ages -- fare in the federal budget and how federal and state spending mesh. Drawing on these forthcoming reports, a panel of distinguished experts will begin a vital and timely exchange on how the nation can, amid severe fiscal and budgetary challenges, make the wisest public investments in its children.

This paper uses data from the Panel Study of Income Dynamics to assess how the economic security and mobility of nonelderly adults in families with children has evolved from 1970 through 2005. We find that that for individuals in low-income families with a full-time, full-year worker, both economic security and upward mobility increased over time. Our findings underscore the importance of work for the long-term security and mobility of low-income families. The high and rising unemployment rates of 2009 clearly imperil the progress made during the last three decades of the 20th century.

Kids' Share: An Analysis of Federal Expenditures on Children through 2008, a third annual report, looks comprehensively at trends in federal spending and tax expenditures on children. This appendix details our data sources, the programs we include, and the methodology used to estimate the percentage of all expenditures that went to children.