Big Picture: Federal Spending on Children at Lowest Point in Decades

Although it focuses on children more broadly, a recent report by the Urban Institute has implications for programs that serve children with disabilities, such as Medicaid supports and special education programs.

As written by the Urban Institute:

“Public spending on children aims to support their healthy development and help them fulfill their human potential. As such, federal spending on children is an investment in the nation’s future. To inform policymakers, children’s advocates, and the general public about how public funds are spent on children, this 13th edition of the annual Kids’ Share report provides an updated analysis of federal expenditures on children from 1960 to 2018. It also projects federal expenditures on children through 2029 to give a sense of how budget priorities may unfold absent changes to current law.

A few highlights of the chartbook:

• In 2018, the federal government spent about $6,200 per child younger than 19, less than in 2017 after adjusting for inflation. This decline is driven by a reduction in federal spending on education and nutrition programs and a temporary reduction in child-related tax credits.
• As a share of the economy, federal investments in children fell to 1.9 percent of GDP in 2018, the lowest level in a decade.
• Medicaid is the largest source of federal support for children, followed by the child tax credit and the earned income tax credit. More than three-fifths of federal expenditures on children are from health or tax provisions.
• The share of federal expenditures for children targeted to low-income families has grown over time, reaching 61 percent in 2018.
• Looking forward, children’s programs are projected to receive only 3 cents of every dollar of the projected $1.5 trillion increase in federal spending over the next decade.
• Assuming no changes to current law, the children’s share of the budget is projected to drop from 9.2 percent to 7.5 percent over the next decade, as spending on Social Security, Medicare, Medicaid, and interest payments on the debt consume a growing share of the budget.
• By 2020, the federal government is projected to spend more on interest payments on the debt than on children.
• Over the next decade, all categories of spending on children except health are projected to decline relative to GDP. Most categories also see declines or remain at similar levels in real dollars.”