Kids' Share: An Analysis of Federal Expenditures on Children through 2008

kids’ shareUrban Institutea n a n a l y s i s o f f e d e r a l e x p e n d i t u r e s o n c h i l d r e n t h r o u g h 2 0 0 8J u l i a B . i s a a c s , T h e B r o o k i n g s i n sT i T u T i o n T r a c y V e r i c k e r , T h e u r B a n i n sT i T u T e J e n n i f e r M a c oM Be r , T h e u r B a n i n sT i T u T e a d aM k e nT , T h e u r B a n i n sT i T u T e 2 | K I D S ’ S H A R E acknowledgmentsThe authors are grateful to the Annie E. Casey Foundation and First Focus for sponsoring this research. We also are indebted to the authors of previous reports on children’s budgets for providing a valuable foundation for this work, including C. Eugene Steuerle, Adam Carasso, Gillian Reynolds, Rebecca L. Clark, Rosalind Berkowitz King and Christopher Spiro. We also thank Paul Johnson for his help with the analysis and those who reviewed the report and offered many helpful insights including Ajay Chaudry, Ralph Forsht, Olivia Golden, Ron Haskins, Bruce Lesley, Michael Linden, and Isabel Sawhill.Published Fall, 2009 A n A nA ly S I S o f f E D E R Al E x pE n D I t uR E S o n CH Il D R En | 1table of contentsexecutive summary .......................................................................................................................................3introduction .....................................................................................................................................................7methodology ....................................................................................................................................................8 changes in methodology since last year ..................................................................................................10 caveats and limitations ..............................................................................................................................12expenditures on children in 2008 ...............................................................................................................13 federal and state/local per capita spending on children ........................................................................15broad spending trends, 1960–2008 ............................................................................................................18 kids’ share of domestic spending .............................................................................................................20trends in children’s expenditures, 1960–2008 ..........................................................................................21 in-kind benefits, cash payments, and refundable tax credits ................................................................22 mandatory and discretionary spending ...................................................................................................22 means-tested programs ...........................................................................................................................24 tax provisions ..............................................................................................................................................24 spending changes between 2007 and 2008 .............................................................................................27future trends in expenditures on children, 2009–19 ...............................................................................29 projection methodology .............................................................................................................................29 projected spending on children and other major items in the federal budget .....................................29 composition of children’s expenditures in 2008 and 2019 .....................................................................32conclusion ......................................................................................................................................................33 2 | K I D S ’ S H A R E A n A nA ly S I S o f f E D E R Al E x pE n D I t uR E S o n CH Il D R En | 3executive summaryless than one-tenth of the federal budget was spent on children in 2008, $295 billion out of a total of $2,983 billion in outlays. Well over a third of the federal budget (38 percent) was allocated to the elderly and disabled for the non-child portions of Social Security, Medicare, and Medicaid. The children’s share of the tax expenditure budget was also less than 10 percent. This third annual Kids’ Share report examines expenditures on children during a time federal budgets are undergoing much change. Our estimate of how much of the federal budget was directed toward children in 2008 is based on detailed budget data released in May 2009 and cap-tures the effects of early responses to the recession. The effects of