(HealthNewsDigest.com) – WASHINGTON, D.C., March 13, 2012–Children in low-income families would be disproportionately affected by cuts in federal spending, an analysis of public resources spent on children concludes.
Low-income children, 42 percent of the child population, received 70 percent of federal spending and tax expenditures in 2009 geared toward those 18 years or younger, researchers at the Urban Institute and Brookings Institution estimate. However, states directed about half of their children’s spending in 2008 (latest available data) to low-income families.
As a result, while the federal government provides about one-third of spending on all children, it is the source for almost half (about 45 percent) of funding on low-income children. Low-income families have annual incomes less than twice the federal poverty level — about $34,000 for a family of three in 2009. That year, there were 73.6 million children, 30.7 million of whom lived in low-income families.
“Because many low-income families depend on the federal commitment, particularly its heavily targeted safety net programs, to prevent excessive hardship, a diminished federal role could have serious negative consequences for millions of children, their families, and the social and economic health of this country,” the Urban Institute’s Tracy Vericker noted.
At the federal level, outlays on children — direct spending for programs like health insurance, social services, education, and Head Start — are far more targeted to low-income children than tax reductions. Low-income children received 84 percent of outlays on children in 2009, much of it dispersed through programs primarily targeting poor or low-income recipients, such as Medicaid and food stamps.
The federal government, through programs and the tax code, spent $291 billion on low-income children, more than twice the $127 billion for higher-income kids. State and local spending on children is less targeted than federal spending.
Using the Rockefeller Institute State Funding Database, the researchers found that per capita state and local spending on children in 2008 was roughly $9,800 for low-income children compared with $7,200 for higher-income children. Federal per capita outlays in 2008 (not including tax expenditures) were roughly $7,800 for low-income children and $1,300 for higher-income children. Counting all levels of government, low-income children received $17,600 per capita in outlays, twice as much as the $8,500 received by higher-income children in 2008. This 2-to-1 ratio would be smaller if tax expenditures were included.
The report does not judge whether these spending levels meet the varying needs of children at different income levels. In fact, many public programs serve only a portion of eligible children.
Within federal spending, the largest expenditure category, at $92 billion, was tax reductions. Health, the second-largest area ($81 billion), was highly focused on low-income children, largely due to the Medicaid program ($69 billion): 98 percent of health expenditures on children were spent on these children. Other children’s expenditures strongly targeted toward low-income kids include housing (99 percent), nutrition (98 percent), and social services (94 percent). Federal education expenditures ($50 billion) were more evenly distributed: 55 percent went to low-income children.
“State and local governments allocated resources to better-off children at about the same level as low-income children, largely due to spending on public education for all children. The federal government plays a significantly stronger role than state and local governments in targeting resources toward the disadvantaged,” Julia Isaacs of the Brookings Institution pointed out.
“How Targeted Are Federal Expenditures on Children? A Kids’ Share Analysis of Expenditures by Income in 2009” was produced by the Urban Institute’s Tracy Vericker, Heather Hahn, Katherine Toran, and Stephanie Rennane and the Brookings Institution’s Julia Isaacs. It was funded by the Foundation for Child Development and is the latest Kids’ Share publication tracking how children fare in the allocation of public resources. Kids’ Share analyzes nearly 100 programs and tax provisions in nine broad categories: health, refundable tax credits, tax reductions, education, income security, nutrition, social services, housing, and training.
The researchers cautioned that 2009 may not have been a typical year for federal expenditures on children. The recession likely led to more kids qualifying for heavily targeted programs, such as Medicaid and food stamps, meaning greater federal expenditures. Also, the federal stimulus package boosted spending through Medicaid and other programs benefiting low-income families.
# # #
The Urban Institute is a nonprofit, nonpartisan policy research and educational organization that examines the social, economic, and governance challenges facing the nation. It provides information, analyses, and perspectives to public and private decisionmakers to help them address these problems and strives to deepen citizens’ understanding of the issues and trade-offs that policymakers face.
###
For advertising and promotion on HealthNewsDigest.com please contact Mike McCurdy: [email protected] or 877-634-9180
HealthNewsDigest.com is syndicated worldwide and has over 7,000 journalists as subscribers.
www.HealthNewsDigest.com