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Kids' Share 2008

How Children Fare In the Federal Budget
  • and C. Eugene Steuerle, Urban Institute; Gillian Reynolds, Urban Institute; Tracy Vericker, Urban Institute; Jennifer Macomber, Urban Institute.
June 23, 2008 |

Children are a declining priority in the federal budget -- a trend that shows no signs of stopping. In 2007, the federal government paid out $2.7 trillion through spending programs and disbursed roughly another $1 trillion through the tax code. Rapidly expanding entitlement programs -- Medicare, Medicaid, and Social Security -- and the country's defense system consumed the largest shares of the budget, while spending on children remained essentially stagnant and did not keep up with growth in the economy.

Our second annual Kids' Share report on the state of the children's budget looks comprehensively at trends in federal spending and tax expenditures on children. Again, we determined how much the federal government spent on children and how programs for children fared against other national priorities in the federal budget. We also explored how future budget planning will affect children.

This report echoes what we found in our Kids' Share 2007 report -- the amount spent on children's programs is waning. And neither relatively slower growth in the economy in fiscal 2007 nor changes in party control of Congress affected this trend.

Kid's Share Fact Sheet: How Children Fare in the Federal Budget

Historically, children have not been a priority.

  • From 1960 to 2007 federal spending on children rose from just 1.9 to 2.6 percent of GDP. Spending on the big three entitlement programs -- non-child portions of Social Security, Medicare, and Medicaid -- nearly quadrupled from 2.0 to 7.9 percent of GDP.
  • Children’s share of domestic federal spending -- spending that excludes defense, non-defense homeland security, and international affairs -- declined from 20.2 to 16.2 percent from 1960 to 2007.

Last year, children’s spending did not keep pace with growth in the gross domestic product (GDP).

  • The children’s budget grew 1.6 percentage points slower than GDP between 2006 and 2007, inching up just 0.7 percent in real dollars. Spending on the big three entitlement programs -- non-child portions of Social Security, Medicare, and Medicaid -- rose 2.9 percentage points faster than GDP and 5.2 percent in real dollars.
  • Even while spending on children’s health programs grew 2.2 percentage points faster than GDP between 2006 and 2007, spending on education declined by 4.4 percentage points relative to growth in the economy.

The next Congress can affect future trends in children’s spending.

  • Six major programs are up for reauthorization or extension in the next Congress: State Children’s Health Insurance Program, No Child Left Behind, Child Care and Development Block Grant, Child Tax Credit, Child and Dependent Care Tax Credit, and the Earned Income Tax Credit.

Absent policy changes, children’s spending will continue to be squeezed in the next decade.

  • If current spending and revenue policies continue, children’s share of domestic federal spending will decline from 16.2 percent in 2007 to 13.8 percent by 2018.
  • As a slice of GDP, children’s spending will decline from 2.6 percent in 2007 to 2.2 percent in 2018, while Social Security, Medicare, and Medicaid will rise from 7.9 to 9.6 percent.
  • While domestic spending is projected to grow by $771 billion between now and 2018, the type of budget baseline used by the nation’s budget offices indicate that children will reap only 7.1 percent, or $55 billion, of this.

For the full text of the report and the PDF version of the fact sheet, please see the PDFs attached below.

Between 2006 and 2007, the children's budget inched up just 0.7 percent while the non-child portions of Social Security, Medicare and Medicaid rose 5.2 percent, or faster than GDP.

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