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Crumbs for Children?
Kids are a priority in almost every family's budget. From the moment we hold
our newborns in our arms, feeding, clothing, housing and educating them trumps
everything else. But in the federal budget, the reverse is true: only a modest
fraction of federal spending is aimed at kids. And that fraction is scheduled to
decline because neither political party is willing to fix what it knows is
plaguing our spending and tax systems.
With my Urban Institute colleagues, I've been tracking federal spending and
investment in children for two projects-First Focus and Partnership for
America's Economic Success. We've looked at budget trends and patterns since
1960 and, based on current law, projected them forward to 2017.
The bottom line is that kids have never batted first in the budget. In 1960,
when defense still took about one-half of the budget pie, the kids' share of the
remaining domestic budget was at best about 20 percent. Between 1960 and 2006,
the domestic budget pie grew significantly, largely because of economic growth
and the decline in the share garnered by defense, but children got only about 15
percent of the additional filling. Now, we've put into law so many other growing
commitments that the kids' share of the additional filling is projected to
shrink to less than 6 percent by 2017.
In dollar terms, children's programs under laws now on the books would gain
only $36 billion in a little more than a decade, even while other domestic
programs would expand by $609 billion. Adopt the programs put forward by our
Republican President or advocated by many Democrats in Congress, and the figures
change only slightly. Exclude their share of the growth in Medicaid costs, and
kids get just about nothing.
Even though their position is eroding, children are the apples of some
programs' eyes. More than 100 federal spending programs aim to improve the lives
of children through cash assistance, health care, food and nutritional aid,
housing, education, and training. At one time, the average-income working
families with children paid almost no income or Social Security tax. Those days
are gone, though recently some new credits (like the child credit) have helped
put such families on more solid financial ground.
Let's see what's driving the projections. Economic growth is likely to
deliver roughly 35 percent more revenues by 2017 than it does today. Most of
this will finance additional domestic spending even if some goes to chip away
deficits and even if we're still spending the same share of the budget on
defense and foreign policy. Retirement and health will get much bigger shares of
the budget pie, and, as their shares grow, arithmetic tells us that others must
decline. Children's programs are among those hardest hit-getting smaller
percentage shares and often even less filling than they have had in the past.
The one exception to this tale of contraction is not necessarily good news. The
children's health budget, although only a sliver of the total health budget,
will grow under current law as long as overall health costs keep rising. Rising
costs, however, induce more families to stop purchasing insurance, so the net
gains for children are limited.
Kids also bear the brunt of another ominous budget trend: larger shares of
federal money going to consumption and smaller shares to investment, including
investment in children. So far, none of the growing field of Republican and
Democratic presidential hopefuls is kindling much hope for a change in
priorities. Not one has said much about curbing growth in the ravenous
retirement and health programs, even though more investment-oriented programs
are starving as a result. There are murmurs about allowing some tax increases,
but mainly to stem deficit growth. These clearly would not do more than
temporarily reverse the decline, much less nourish and prepare the next
generation.
Our skewed priorities defy reason as well as fairness. As the kids' share of
the budget shrinks and we invest in them proportionately less, how can we expect
them later to earn the money to pay the taxes to cover our ballooning pile of
retirement and health benefits? Think about it: we've put into the law that they
owe us ever more and we owe them ever less.
It's time now to focus on what we can do for kids. Investment—particularly in
children—needs to become the budget priority. But kids will take a back seat
until we're honest enough to admit that the priority now is to spend more and
more on ourselves, while leaving the costs to them. Don't they deserve better?
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