Are Programs for Children Getting Their Fair Share of the Federal Budget?

At the end of September, the Urban Institute released a major report, Kids’ Share: Report on Federal Expenditures on Children in 2014 and Future Projections, an examination of our society’s priorities as reflected in the federal budget. Federal programs for children include the safety net for our society’s poorest children and also support for particular programs in the huge institution that has evolved to serve roughly 90 percent of our children, public education.  While the new report is relatively technical, its conclusions are not complicated.  What was the federal government doing for our children in the United States in 2014, the most recent year for which data is available, and what can be projected for the future, assuming laws and priorities remain the same?

The Urban League concludes: “Federal spending on children has remained fairly flat, in real dollars, over the past three years.  Between 2012 and 2014, spending fell for children’s education, nutrition, social services, and early education and care, and increased for children’s health. The largest declines in programs affected by the BCA (Budget Control Act) were in federal K-12 education programs.” Spending on education dropped by $1.8 billion, or 4 percent from 2013. “Other children’s programs with declines include Head Start; the Supplemental Nutrition Program for Women, Infants, and Children, child care assistance; and selected social service programs.  Not all of this change was due to the BCA. In programs exempt from the BCA, the largest increase was in the children’s share of Medicaid…”

The programs most affected by the cuts are in the category of federal spending called “discretionary.”  These are the programs whose funds are set each year by Congressional appropriation, unlike the category of “mandatory” spending which contains all entitlements, including the tax credits and other tax policy benefits.  Only discretionary spending was affected by the 2011 Budget Control Act and the sequester that came later, but, “Tax policy (mandatory spending) accounts for 40 percent of federal investments in children.  Child-related tax provisions—including the Earned Income Tax Credit, the child tax credit, the dependent exemption, and the children’s share of the tax exclusion for employer-sponsored health insurance—accounted for two-fifths of all expenditures on children.” These mandatory programs have grown because they have not been affected by Congressional efforts to limit federal spending.

The Urban League explains the legislation Congress passed in 2011 to control the size of the federal budget: “Designed to curb overall federal spending, the Budget Control Act of 2011… did not affect the budget uniformly, leading to reductions in some areas of children’s spending but not others.  The BCA constrained spending through a combination of automatic spending reductions (‘sequestration’) and caps on defense and non-defense discretionary spending; these caps are in place through 2021.  While the BCA had a considerable impact in certain areas of spending on children (e.g., education, early care, training, and housing), it had a relatively small impact on the total expenditures on children because of factors specific to its design… Among the mandatory programs exempted from the automatic spending reductions were Social Security, veterans’ programs, refundable tax credits, and many programs serving low-income individuals: SSI, TANF, family support programs (which include child support enforcement), Medicaid, CHIP, SNAP, child nutrition programs, payments for foster care and permanency, and the mandatory portion of the Child Care and Development Fund.  As a result, the majority of children’s outlays—nearly 80 percent in 2014—were exempt from the BCA.”

The Urban League’s projections on spending for children in the next decade are bleak. “In the future, overall federal spending is projected to increase substantially, but virtually none of the additional funds will be directed toward children.  Thus, the share of the economic pie and of the federal budget devoted to children is scheduled to decline…” “The kids’ share of the budget is projected to decline from 10 percent in recent years to less than 8 percent in 2025.  The share of the population under 19 is projected to contract slightly from 24 to 23 percent, but the children’s modest share of the budget will fall by close to a quarter… All of the children’s share of the increase goes to health programs; excluding health care, fewer dollars will be spent on children in 2015 than in 2014, after adjusting for inflation.”

What about federal investment in education in the next decade?  What is expected to happen to Title I to support schools serving children in poverty and the Individuals with Disabilities Education Act to help pay for special education?  Here is the startling warning in the Urban League’s new report: “Education and tax benefits face the largest declines.  Spending on children in the areas of K-12 education, early education and care, the refundable portion of tax credits, housing, and nutrition is projected to decline by 25 percent or more over the next decade, when measured as a percentage of GDP.”  “The largest projected decline is in federal funding for K-12 education.  Education spending is projected to fall not only as a share of GDP but also in real dollars, from $42 billion in 2014 to $38 billion in 2025… Federal education spending on programs such as Title I/Education for the Disadvantaged and special education will fall because of the end of the ARRA (the 2009 federal stimulus), the 2013 sequestration, and the BCA discretionary spending caps… Early education and care (e.g., Head Start and child care), housing (e.g., Section 8 and public housing), and the youth portions of training (e.g., Job Corps and Work Investment Act youth formula grants) face similar constraints because most programs in these categories must compete annually for appropriations.”

It is to be hoped that readers of the new report from the Urban Institute report will not construe the data as pitting federal investments in education, child care, food stamps, and the Earned Income Tax Credit against each other. It is important to remember that schools and children’s achievement in school are affected not just by federal investments in education but also by investments in many of the other federal programs that address the needs of children living in poverty. We know, for example, that children’s opportunities are affected by the persistence of poverty and also its growing concentration.  Stanford University sociologist Sean Reardon has conducted massive research (here and here) on growing segregation of families by income and a closely related widening income inequality achievement gap at school.  Reardon’s research confirms that families are increasingly raising children in communities of either concentrated poverty or concentrated wealth.  Reardon recently commented: “We have evidence over the last few decades that the achievement gap—the test score gap—between students from high and low-income families is widening, and maybe that’s related to these processes.”  “Unfortunately,” adds Paul Jargowsky at Rutgers University, “poor children are more likely to live in high-poverty neighborhoods than poor adults… The gap is largest for poor children under 6 years of age, by 16.5 percent compared to 13.8 percent for poor adults.”  All this means that programs providing support for healthcare, enriched pre-Kindergarten, and childhood nutrition are programs that help children thrive at school.

A more serious concern is whether budget control—through the sequester and caps on spending—is more important than programs that expand educational opportunity for poor children, ameliorate hunger among children, provide healthcare, or ensure affordable and enriched childcare. And then there is the question the Urban League’s new report does not address: Shouldn’t Congress consider raising revenue by increasing tax rates and closing loopholes for those who can well afford to help our society lift poor children out of poverty?

The theologian Dietrich Bonhoeffer is said to have declared, “The test of the morality of a society is what it does for its children.”

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