Priority or Afterthought? Children and the Federal Budget

Julia B. Isaacs and
Julia B. Isaacs Former Brookings Expert, Senior Fellow - Urban Institute
Phillip Lovell

March 1, 2007

A country’s priorities are reflected in its budget. Most people agree that “children are our future,” but there’s less agreement on how well we are preparing the next generation to lead us into that future. Many argue that it is important to invest in children and youth, building their knowledge and skills so they can be productive workers and citizens. But are we investing enough in them?

A recent study of federal expenditures on children from 1960-2017, conducted by Urban Institute researchers Adam Carasso, C. Eugene Steuerle, and Gillian Reynolds, calls into question the extent to which we, as a country, are making children a priority in our budget.1

  • While federal expenditures on children have grown over the past four and a half decades with the rest of the federal budget, the share of domestic spending focused on children has fallen 23 percent, from 20.1 percent in 1960 to 15.4 percent in 2006.
  • Children’s programs are not structured to compete for scarce federal dollars. They do not grow with the economy or even infl ation; whereas other programs are indexed to economic growth.
  • By 2020, spending on children could dry up completely. If entitlement spending continues unchecked and all tax cuts are retained, spending on the non-child portions of Medicaid, Medicare, Social Security, defense, foreign affairs, and interest on the debt could completely consume federal resources, leaving nothing available for children.

How has spending on children changed over time?

Federal expenditures on children have increased over time, though not as rapidly as spending on major entitlement programs focused on the elderly.

As a share of domestic federal expenditures, spending on children fell from 20.1 percent to 15.4 percent of domestic spending between 1960 and 2006 – a decline of 23 percent.2 By comparison, the percentage of spending focused on the elderly through Social Security, Medicare, and Medicaid has more than doubled, growing from 22.1 percent to 45.9 percent (see Figure 1).3