Low-Income Children, Their Families and the Great Recession

Abstract

Children and youth vary in their developmental health due to differences in family economic security and exposure to toxic stress. The economic downturn has increased the challenges facing low-income children. The ARRA and the President's first budget made significant down-payments on investments in protecting and promoting the well-being of these children. But some of those investments are temporary and must be built into baselines going forward. Many other promising avenues for policy change could be implemented through reauthorization of PRWORA and ESEA. Further, a new era of experimentation in innovative program and policies is recommended for when the economy recovers.

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Introduction

Children can't vote. And households with children are a declining proportion of all American households. These two facts help explain the political weakness of children and those who advocate on their behalf, and the disproportionately small share of federal spending devoted to children (Isaacs et al. 2009). Nonetheless, and to state the obvious, children are 100 percent of our nation's future. Today's children are tomorrow's parents, citizens, and workers. Robust private (family) and public (government) investments in children's health, education and development are central to achieving our nation's long-term interests.

What should happen, then, when a severe recession compromises the ability of both families and government to invest in children? In particular, what should happen when this severe economic downturn follows a period of declining investment in children and a broader unraveling of the safety net for low-income families?

The current administration has demonstrated through its actions that it strongly believes that the federal government should act quickly and countercyclically to at least maintain, and ideally to improve, the quantity and quality of investments in children and youth, especially those in the most economically distressed families and communities. In February 2009, President Obama signed the Children's Health Insurance Reauthorization Act, providing coverage to an additional 4 million children. He also signed the American Recovery and Reinvestment Act (ARRA), which provided billions of dollars of federal investment in K?12 education and the expansion of the children's tax credit. These and other investments were passed in the first heady rush of a new administration taking office and as parts of an economic stimulus package designed to counter the "Great Recession."

Unfortunately, early in 2010 things are getting even tougher. Because the economy has not yet begun to generate new jobs for low-income parents nor increased revenues for state and local governments, investments in low-income children and youth will decline unless the federal government acts. But increasing federal investments in low-income children and their families will require: deploying scant resources away from other objectives; raising taxes during a recession; and/or continuing high levels of deficit spending. We begin this paper simultaneously acknowledging the urgent need for, and the great political difficulty of, investing more and better in low-income children, youth, and their parents.¹

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