$87 Billion to Iraq, $88 Billon Tax cut; What About Children?

Greg Duncan and
Greg Duncan Distinguished Professor - University of California, Irvine
Isabel V. Sawhill

October 7, 2003

At nearly 1 percent of the size of America’s economy, President Bush’s $87 billion price tag for Iraq is an enormous amount of money. Now that the initial shock has begun to wear off, perhaps we should ask ourselves what that kind of money could do if invested here at home.

As an author and an editor of the recent book “One Percent for Kids’ (Brookings Institution Press, 2003), we have some very specific ideas for investments that would greatly benefit America’s children and our country’s future.

Our proposals, which total about $76 billion, are the product of four years of work by 12 experts who reviewed policies designed to enhance children’s development. We were encouraged by the fact that Tony Blair has mustered the political will to devote an equivalent amount on child-related proposals in Britain, although our programs differ from his.

A prime concern was how to build upon the work-promoting successes of recent welfare reforms. Experiments have shown that children whose mothers are encouraged to work full- time are more successful in school than those who remain dependent on welfare, but only if family income increases as well. Accordingly, we propose a modest increase in the minimum wage and a $20 billion expansion of the Earned Income Tax Credit for full-time (30-plus hours per week) workers.

At the same time, research shows that maternal employment may harm infants. Here we seek to expand parental options by increasing unpaid parental leave from three to six months and reinstating work exemptions in welfare programs for mothers with infants under six months of age.

In view of the high rates of out- of-wedlock childbearing and declining rates of marriage, it is critical to examine carefully the evidence in these areas. Building on the successes of a handful of pregnancy-prevention programs, we recommend a $2.5 billion expenditure on high- quality after-school programs. While increasing the number of children in two-parent families is a worthy goal, the evidence so far is not solid enough to warrant more concrete steps than a careful evaluation of several promising approaches to encourage marriage.

Brain research has focused attention on children’s early years, and the evidence confirms the wisdom of expenditures during these years as well. Since younger children appear to be most vulnerable to poverty, we propose a $10 billion child allowance beginning at birth and ending at a child’s fifth birthday, for both poor and middle-class families.

If continuing evaluations of Head Start warrant, we would expand Head Start coverage for low-income children. We would begin by providing universal pre-kindergarten access and implementing effective programs targeting children at all economic levels who have severe mental health problems.

Despite recent progress, millions of children and pregnant women still lack health insurance. We propose to close this gap with a $10 billion expansion of Medicaid-type insurance programs. To provide opportunities to escape the problems of high-poverty urban neighborhoods, we would expand vouchers for public-housing residents and further promote mixed-income housing development.

No doubt some people will dismiss comparisons with the $87 billion for Iraq on grounds that the post-war expenditures are extraordinary and urgent. The recent tax cuts provide another point of reference. When fully phased in, the 2001 tax cut provides $88 billion annually to the wealthiest 5 percent of Americans. If our country can summon the political will to rebuild Iraq or cut taxes, surely we can invest the money needed to secure the future of our children.