The Brookings Institution and the Urban Institute

Kids' Share 2011: Report on Federal Expenditures on Children Through 2010

Executive Summary

This fifth annual Kids’ Share report marks a milestone in the analysis of federal expenditures on children because available data now span 50 years, from 1960 to 2010. During the past half-century, the size and composition of expenditures on children has changed considerably. Back in 1960, the largest federal contributions to families due to the presence of children came from the dependent exemption, Social Security, and education. Fifty years later, the dependent exemption has much less relative value, and Medicaid, the earned income tax credit, and the child tax credit have become the three largest federal expenditures on children.

Federal expenditures on children in 2010, the most recent year of data, were affected by the immediate crisis of the recession of the late 2000s as well as by long-term trends. In response to the recession and an unemployment rate that averaged 9.7 percent, the federal government increased its spending on children. The children’s share of the federal budget was 11 percent in 2010, slightly higher than in 2009 and considerably higher than it was 50 years ago. This increase is temporary, however, with the children’s share of the budget expected to shrink to less than 8 percent by the end of the next decade.

Absent reform of current law, federal spending on children is projected to fall over the next several years, whether measured in real dollars, as a share of the federal budget, or as a share of the economy. Between 2010 and 2015, for example, outlays on children are projected to fall from $374 billion to $339 billion, a decline of 9 percent. As the temporary boost in spending under the American Recovery and Reinvestment Act of 2009 (ARRA) comes to an end, federal spending on education and certain other programs for children will fall dramatically.