Citation URL: http://www.urban.org/ChristopherSpiro

Federal Expenditures on Infants and Toddlers in 2007 looks comprehensively at federal spending and tax expenditures targeted toward infants and toddlers. This appendix details our data sources, the programs we include, and the methodology used to estimate the percentage of federal expenditures that went to infants and toddlers in 2007.

Kids' Share 2008, a second 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.

"Kids' Share 2007: How Children Fare in the Federal Budget" tracks trends in federal spending on children from 1960 to 2017 by analyzing over 100 programs through which the federal government spends on children. This appendix lists our data sources, describes each program, and explains the methodology used to estimate the percentage of all expenditures that went to children.

The most comprehensive examination of trends in federal expenditures on children finds that expenditures grew from 1.9 percent of GDP in 1960 to 2.1 percent in 1997. Although comprising a smaller share of total domestic spending, children's spending increased 246 percent, from $48.6 billion to $168.5 billion (constant dollars). Spending on low-income children, however, increased 23-fold, from $5.1 billion to $117.3 billion. Three new programs account for half of the increase: the Earned Income Tax Credit, Medicaid, and Food Stamps. Spending on children increasingly shifted from broad-based middle class relief to programs aimed more at the poor. The report classifies 66 federal programs into eight major budget categories.

Some reformers involved in the current Social Security debate have been stricken with British Empire Syndrome (BES): They believe riches can be made to flow into the program endlessly and almost effortlessly, and that, once again, the wheels simply need to be set in motion.

Many policymakers spell out the details of their reform proposals but, when describing how those proposals will affect lives, do not distinguish between groups of retirees. In reality, groups of retirees will experience reform differently and will take on a degree of burden for reform consistent with their socioeconomic status.

Replacement rates reveal an awkward trend: A retiree's financial standing relative to the working population is strong initially, but it diminishes throughout retirement. This is the opposite of what one might expect given that older age is usually accompanied by increased financial need and fewer sources of support. Regardless, replacement rates reveal that when a beneficiary first retires, Social Security payments are a substantial portion of pre- retirement wages. Relative to the income of the population as a whole, replacement rates begin to fall. Fortunately, this curious situation suggests its own solution.

Replacement rates, which compare individuals' initial Social Security benefits with previous wages, are often used to determine whether or not recent retirees can maintain their preretirement standard of living. Replacement rates, however, can be unsteady measures. As discussed in a previous brief, they look different depending on the wage (for example, average, highest, or most recent) with which a new Social Security benefit is compared. But such rates can also appear different over the course of retirement.

Replacement rates at time of retirement—the fraction of previous wages that initial Social Security benefits replace—may be much higher than has been traditionally measured. If this is true, policymakers are aiming for the wrong target and unwittingly inducing people to retire earlier than they otherwise would.

With longer life expectancy and earlier retirement, Social Security benefits are increasingly paid to those who could be considered middle-aged and less in need. Renaming “Old-Age and Survivors Insurance” to include the middle-aged would help change perception of who is old.

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