Reversing the Systemic, Structural Disinvestment in Children

Bruce Lesley, Huffington Post

The Urban Institute released its annual report entitled Kids’ Share 2015 last week and the analysis is a disturbing one for those of us concerned about the well-being of the next generation and our nation’s future.

The budget analysis confirms the findings of First Focus’s June report, Children’s Budget 2015, that the share of federal spending dedicated to children has been declining over the course of the last six years. But even more disturbing, the Kids’ Share study concludes that over the course of the next decade:

. . .federal expenditures on children are expected to decline, both as a share of total federal spending and as a share of the economy. Relative to other outlays and uses of our national income, children are scheduled to become an ever-declining priority.

Specifically, the Urban Institute estimates that the federal share of spending on children will decline from 10.1 percent in 2014 to 7.7 percent in 2025 and that the federal share of the gross domestic product (GDP) dedicated to children will drop from 2.1 percent to 1.7 percent over the same period.

In addition, by 2018, the Urban Institute finds that, “under current policies, spending on interest payments on the debt is projected to exceed spending on children in 2018 and each subsequent year, by larger amounts each year.”

Some of the cuts to children’s programs are scheduled to be quite dramatic. For example, Kids’ Share estimates:

Over the next decade, education, early education and care, and child-related spending on housing and nutrition have the largest declines: 25 percent or more, when measured as a percentage of GDP.

Such reductions might be “acceptable” if children were faring well in society, but the opposite is the case on a number of important indicators. For example, the U.S. Census Bureau recently reported that 21 percent, or 15.5 million children, were living in poverty.

Moreover, the Urban Institute cites data from UNICEF that shows the United States ranks poorly in international comparisons of children in a number of areas, including education, early childhood, employment, infant mortality, and training. Consequently, the United States receives an overall ranking of 26th out of 29 nations in UNICEF’s composite measure of child well-being.

In response to such poor outcomes among America’s children, our federal government has chosen to engage in a systemic structural disinvestment in a number of programs of critical importance to children.

In contrast to spending on the elderly, where the vast majority of spending is on the mandatory side of the federal budget and thereby not subject to the annual appropriations process, a higher percentage of federal spending for children is on the discretionary side of the federal budget. Unfortunately for children’s programs, Congress has chosen to subject the programs on the discretionary side of the budget to significant cuts and hard spending limits or “sequestration” in an effort to cut the federal budget deficit. The result of these caps is that, if Congress enacts annual appropriations bills that exceed these hard caps, an across-the-board spending cut or “sequestration” is automatically imposed on discretionary programs.

One of the report’s primary authors, C. Eugene Steuerle, has also authored a book called Dead Men Ruling: How to Restore Fiscal Freedom and Rescue Our Future, which highlights how entitlement programs and a number of tax credits and deductions have built-in automatic adjusters that annually increase and tie up the majority of the federal budget in the future. This severely limits the ability of the President and Congress to invest in future needs.

Unfortunately, Steuerle notes that a number of children’s programs, including education, are discretionary and increasingly squeezed by the budget caps that Congress has imposed on that portion of the federal budget.

Recognizing this, members of the Children’s Budget Coalition recently sent a letter to congressional leadership urging them to lift the caps. The Coalition wrote:

We urge you to raise the non-defense caps to a level on-par with the defense spending to ensure that children’s initiatives are protected in a long-term agreement. These initiatives only amount to less than 8 percent of the federal budget, even though children are 25 percent of our nation’s population, and have already been cut by almost 7 percent since 2011. Any further cuts to these initiatives would be extremely harmful to our Nation’s future.

With no change and continuation of current budget trends, Kids’ Share estimates that only 2 percent of all new revenue over the course of the next decade will be made in support of children. The result is that, with the exception of a projected increase in funding for health care, “children’s expenditures will decline even in absolute dollars.”

In fact, the report finds:

Over the next decade, education, early education and care, and child-related spending on housing and nutrition have the largest declines: 25 percent or more, when measured as a percentage of GDP.

And, even within health care, the story is a precarious one for children. For example, although the Urban Institute projects an increase of funding for kids in Medicaid, the bulk of all new spending with be on low-income adults, as states opt to expand coverage for them under the Affordable Care Act (ACA), and the elderly. With respect to the Children’s Health Insurance Program (CHIP), its funding is currently projected to end in 2017 unless Congress and a new president affirmatively extends its funding.

Steuerle urges a new vision for the budget and children. He writes:

By shifting the budget toward investment in education, early childhood development, and other priorities set by evidence of high potential impact, we would promote growth for both the nation and its people over the long term. Think of the twenty-first century as doing for the young what the twentieth did for the elderly, only with a focus this time on opportunity and potential. . . .

We must demand change on behalf of the next generation. To help in this endeavor, First Focus is building The Children’s Network – a collaboration of individuals and organizations dedicated to raising public awareness around issues of important to children and urging policymakers to make children a greater priority. Join us. Kids need our voices.

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