The substantial increase in education funding under ARRA is more clearly displayed in figure 4, which shows spending by broad budget category rather than by indi- vidual program. ARRA investments in education increased education outlays on children by $10 billion in 2009, more than the increases in health ($8.3 billion, driven by Medic- aid) or nutrition ($2.5 billon, primarily for SNAP benefits). With the ARRA increases, education rises to the third larg- est category of spending on children, slightly above income security and nutrition, but still behind health and the refundable portion of the tax credits. The three smallest cat- egories of spending are social services (which include Head Start, child care, child welfare, and other programs strongly associated with children), housing (e.g., Section 8, public housing, low-income home energy assistance), and training (including the portions of Job Corps and WIA Youth train- ing that serve populations under 19).
Each major category shown in figure 4 encompasses spending across many different programs, as shown in table 1, which compares outlays in 2008 and 2009 for all programs that have $1 billion or more in children’s expen- ditures in 2009. Spending on dozens of smaller programs, while not reported separately, is included in the category totals and the smaller programs are listed by name in the notes to table 1.
An examination of table 1 shows that almost all budget categories and programs experienced increases between 2008 and 2009 even after adjusting for inflation. Four cat- egories saw very large real increases: health (36 percent),
training (29 percent), nutrition (23 percent), and education (23 percent). The increases in education and training were driven by appropriations under ARRA, while the combi- nation of ARRA and increases in the numbers of needy families joining Medicaid and SNAP (food stamps) drove the increases in health and nutrition. There were much smaller increases in income security (5 percent), housing (5 percent), the dependent exemption (3 percent), and social services (2 percent).A few programs within these categories experienced large increases, however. Most notably, the low-income home energy assistance program (LIHEAP) increased by 66 percent. The Consolidated Security, Disas- ter Assistance, and Continuing Appropriation Act of 2009, which was enacted before ARRA, added funding to LIHEAP to help poor families meet heating and cooling costs in times of higher energy prices.
Two tax-related categories experienced declines: the refundable portion of tax credits (13 percent decline) and tax expenditures (7 percent decline). The latter includes the nonrefundable portion of the earned income tax credit and the child tax credit, as well as reduced tax liabilities from the dependent and child care credit, the exclusion of foster care benefits, and other small tax disregards and exclusions. The 13 percent drop in the refundable portion of tax credits is driven by a 30 percent drop in the refundable portion of the child tax credit. As discussed in last year’s report, child tax credit outlays were atypically high in 2008 because they included the one-time payment of $300 per child as part of the tax rebates in the Economic Stimulus Act of 2008.
Billions of Dollars
Source: The Urban Institute and The Brookings Institution, 2010. Authors' estimates based on the Budget of the U.S. Government Fiscal Year 2011.
FIGURE 4 Federal Expenditures on Children in Fiscal Year 2009, by Category $90
Tax credits (refundable portion)
Tax Dependent Expenditures Exemption