The voices of Urban Institute's researchers and staff
September 30, 2014

Want the best return on your tax dollar investment? Invest in children

September 30, 2014

It is no secret that investments in children’s health, education, and overall well-being pay high dividends for taxpayers and the economy as a whole. So why will the federal government be shrinking its investment in children over the next decade?

High-quality early childhood programs and K-12 education, stable housing, and adequate nutrition help children grow into healthy adults who are able to support themselves and contribute to economic growth. However, without changes to current law, the federal government will spend less and less over the next decade on children’s education, nutrition, housing, early education and care, social services, training, tax provisions, and every other category of program except health (particularly Medicaid). Currently, about 10 percent of federal spending is invested in children. That investment will fall below 8 percent by 2024.

The reason for the declining investment in children is not a deliberate rejection of children and their needs. Rather, it is because the federal budget is on autopilot to spend ever larger amounts on Medicare, Medicaid, and Social Security for adults. As federal spending grows over the next decade, 94 percent of the new spending will go to these three programs for adults and debt payments. Only 2 percent of new spending will go to children’s needs. Because revenues keep falling short of spending, interest payments on the debt will exceed spending on children from 2017 onward, and by larger amounts each year.

Those who wish to improve the financial health of the nation should care about federal supports for children and should attend to the broad budget trends that squeeze out wise investment.

KidsShare_24

These figures come from our recent report Kids’ Share 2014, an annual publication in which we analyze federal, state, and local expenditures on children from 1960 through 2024.

This post's graphic has been updated. It originally identified the grey bars as 2014, rather than 2024. Apologies.

SHARE THIS PAGE

As an organization, the Urban Institute does not take positions on issues. Experts are independent and empowered to share their evidence-based views and recommendations shaped by research.