Kids' Share: An Analysis of Federal Expenditures on Children through 2008

Abstract

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. Key findings suggest that historically children have not been a budget priority. In 2008, this trend continued, as children's spending accounted for less than one-tenth of federal outlays. Absent a policy change, children's spending will continue to be squeezed in the next decade.

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Introduction

To advance the economic and social health of the country, the federal government directs resources to children—the country's future workers, parents, and voters. This helps ensure the well-being of children and helps them develop their potential and future contributions to our common welfare. Federal resources are used to promote the health and development of the young, protect their safety and wellbeing, ensure their basic needs are met, help protect their families from financial hardship, and provide education. These resources constitute total federal expenditures on children, which is allotted through both direct spending on programs that serve children and through tax benefits that offer their families financial assistance.

Building on a series of earlier reports, this report seeks to inform a national conversation about how best to invest the country's resources by examining federal expenditures on children. To this end, we tracked actual federal spending on children from 1960 through 2008 and projected spending through 2019 under current policies. This is in line with earlier reports that tracked historical federal spending on children; however, this report builds on earlier reports by presenting new figures, including a comparison of federal and state and local expenditures on children, as well as a special discussion on tax programs that benefit families with children. Below, we highlight what is included in each section of this report.

First, we provide an overview of the methodology used to estimate federal expenditures on children. We build on the methodology developed and employed in earlier reports, and we highlight changes in the methodology from prior reports.

Next, we estimate federal spending on children in 2008, based on detailed information released in May 2009 in the Budget Appendix to the President's Budget for Fiscal Year 2010. This estimate of expenditures includes the direct outlays in the budgets of a broad array of federal programs as well as the effect of provisions in the federal tax code that provide resources to families with children.

Broad historical trends in the budget are presented in the subsequent section, which compares spending on children with spending on other major items in the federal budget. The methodological improvements we have made in this year's report are applied to historical data as well, providing consistent estimates of spending from 1960 to 2008. After that, we focus on different components of children's expenditures. Because much of the data underlying these sections are historical, and therefore unchanged from last year's report, many of the highlighted trends are similar to those presented in last year's report. In some cases, however, an additional year of data or a new graphical presentation draws attention to some emerging trends.

Finally, we estimate children's spending through 2019, building on Congressional Budget Office (CBO) baseline projections. Expenditures in fiscal year 2008 do not include the increased spending resulting from the recently enacted stimulus spending, as this spending began in fiscal year 2009 (ARRA); however, our estimates illustrate the estimated impact of this legislation, suggesting how spending on children will rise and fall over the next decade if no further changes are made to current law.

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