Billions of Dollars
ARRAa Tax Reductions Outlays
Source: The Urban Institute and The Brookings Institution, 2010. Authors' estimates based on the Budget of the U.S. Government Fiscal Year 2011. a. The ARRA impact is primarily on outlays, but there is a small impact on tax reductions, as detailed in table 3.
FIGURE 3 The Ten Largest Spending and Tax Programs by Expenditures on Children in Fiscal Year 2009
program with the highest expenditures on children. While some of the dramatic growth in Medicaid came from ARRA, which increased the federal share of this federal/state pro- gram, much of the program growth was driven by increased enrollment of needy children in response to the recession and by expanded public coverage, as well as ever-increasing health care costs.
After Medicaid, the largest sources of expenditures on children are three child-related tax provisions. The child tax credit and the earned income tax credit, accounting for $50 billion and $43 billion, respectively, in 2009, are split between cash payments refunded to families (outlays) and reductions in tax liabilities, with most of the EITC coming in the form of cash refunds and the child tax credit split more evenly between refunded tax credits and reductions in tax liabilities. In addition, the dependent exemption re- duces the tax liability of families by $34 billion below what they would have paid if they had not had children. Together, Medicaid and the three child-related tax provisions account for half (50 percent) of expenditures on children.
The fifth and sixth largest programs, the Supplemental Nutrition Assistance Program (SNAP or food stamps) and Social Security, are not typically thought of as children’s programs. But, in fact, SNAP and Social Security provide children with significant resources, $27 billion and $19 billion, respectively. Like Medicaid, SNAP is a program that had substantial expenditures before the recession and then increased substantially (by 40 percent between 2008 and 2009) as more needy families joined the program and monthly benefits were expanded under ARRA. Social
Security payments to children (survivors and dependent
benefits) did not increase much between 2008 and 2009 and were not affected by ARRA (the $250 supplemental benefit provided under the Recovery Act was restricted to those age 18 and older).
The last four programs on the top ten list include three programs that serve children exclusively (Education for the Disadvantaged [Title I], Child Nutrition, and Special Education) and one where children make up a majority of the recipients (Temporary Assistance for Needy Families). Each of these four programs spent more than $12 billion on children, including modest increases under ARRA.
Readers may be surprised by the absence of the new $53.6 billion State Fiscal Stabilization Fund (SFSF), a major education initiative of the Recovery Act, from the list of top ten programs for children. One reason is that new funds appropriated in 2009 tend to spend down over a course of years; only $12.4 billion or 23 percent of the $53.6 billion in SFSF was drawn down from the Treasury by the end of fiscal year 2009 (September 30, 2009); the remainder will be spent over the next few years. Further, the $12.4 billion spent in 2009 was split between chil- dren’s spending (specifically, grants for elementary and secondary education) and other spending (grants for higher education, public safety and other government services). We estimate that two-thirds, or $8.3 billion, was spent on K–12 education, and thus meets our definition of spending on children. While a sizable amount, it was not enough to place the SFSF among the top ten programs.
AN ANALYSIS OF FEDERAL EXPENDITURES ON CHILDREN