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Report

Federal Expenditures on Infants and Toddlers in 2007

Julia B. Isaacs, Paul Johnson, Adam Kent, Jennifer Macomber, and Tracy Vericker

EXECUTIVE SUMMARY

Research suggests that investing in young children can help build a strong future workforce, improve children’s educational success and health, and potentially reduce some of the social ills that drain the nation’s resources and will. To have an informed conversation about future investments, it is important to start from an understanding of the baseline: What investments does this nation currently make in young children? Which programs and purposes are currently supported by federal investments, and which are not?

This report provides such a baseline understanding and informs a national conversation about how best to invest the country’s resources by examining federal expenditures on infants and toddlers, defined as children under age 3. The report looks at more than 100 programs through which the federal government spends money on children and calculates the amount spent on this population. These baseline estimates provide a place to start in gauging the priority the nation places on investing in very young children and in comparing the expenditure patterns to researchers’ findings about investments that work.

Experts make six compelling points about the value of investing in young children:

  • A child’s earliest years are pivotal to development.
  • Poverty and toxic stress can adversely affect infant and toddler development.
  • Significant numbers of infants and toddlers are vulnerable to poverty and toxic stress.
  • Scientifically rigorous evaluations have identified interventions that work to improve vulnerable children’s development.
  • High-quality services for infants and toddlers require significant investments.
  • Substantial returns can be realized when investing in disadvantaged children early.

Given this research documenting the value of investing in young children, how much does the federal government spend on infants and toddlers, and where and how is the money being spent? Analyses reveal the following:

  • Early care and education programs make up a relatively small share of all federal funding
    on infants and toddlers, despite expert findings that show the demonstrated benefits of these programs during this pivotal stage in development. Spending on Early Head Start, Part C of the Individuals with Disabilities Education Act, and child care assistance under spending and tax programs represents 7 percent of all spending on infants and toddlers. By comparison, 17 percent of federal spending on all children goes to early care and education, and high levels of state spending on education for these older children mean that the total public investment is far higher.
  • Federal spending on infants and toddlers is more concentrated in health and nutrition than federal spending on all children, with the health portion driven largely by spending on Medicaid, specifically on costs in the first two years of life. An estimated 38 percent of all federal spending on infants and toddlers is on health and nutrition programs, compared with 25 percent of federal spending on all children under 18. In fact, 21 percent of federal spending on infants and toddlers comes in the Medicaid program alone, compared with 12 percent of spending on all children.
  • Most spending on infants and toddlers flows through programs that do not explicitly focus on young children but serve all children (e.g., the child tax credit) or lowincome individuals of different ages (e.g.,Medicaid).
  • Federal programs serving children tend to be targeted on low-income families, and this is particularly true for expenditures on infants and toddlers; more than two-thirds of expenditures are focused on low-income families.
  • Infants and toddlers receive very little cash assistance. Programs providing regular cash payments compose only 2 percent of total spending on infants and toddlers, compared with 9 percent of expenditures on all children. Relatively few infants and toddlers receive Social Security survivors’ benefits, qualify as disabled under Supplemental Security Income, or receive child support payments.
  • The federal government spent $44 billion in outlays and an additional $13 billion in tax expenditures on infants and toddlers in 2007. As these numbers are baselines, it is not possible to know if this represents an increase or decrease from prior years. In addition, while state expenditures are outside the scope of this report, findings from other research suggests that states spend little on this age group, compared with older children.

While answering important questions about federal spending on very young children, these estimates also allow policymakers, advocates, and the public to ask several new questions that could not be asked before, in light of the case experts are making for investment in very young children:

  • Do current spending levels, particularly for early care and education programs, address the full range of developmental needs of infants and toddlers, given this pivotal stage in life?
  • Do current allocations allow programs to reach the children most vulnerable to poverty and toxic stress during these critical years to improve their life trajectories?
  • Do evaluations of what works suggest the need for greater investment in certain program areas?
  • Are investment levels sufficient to ensure high-quality services for enough of the infants and toddlers who need them?

This report provides valuable information to a new presidential administration and Congress that will make critical budgetary decisions in troubled economic times. Given the developmental importance of children’s early years, the interest in investing in young children (especially the most vulnerable), and the potential for return on this investment, the well-being of young children may figure more prominently in these future decisions. To inform these discussions, this report estimates federal expenditures on infants and toddlers and differentiates the key sources and types of funding that support them. In doing so, it brings into clearer focus the choices the nation faces in deciding how much to invest in its youngest citizens and how to make that investment.

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