Broad Trends in the Federal Budget, 1960–2009
Over the past half-century, the share of the economy spent on domestic priorities, including both children and the elderly, has increased, as shown in figure 8. Outlays on children have grown from a low base of 0.6 of GDP in 1960, more than doubling to 1.4 percent of GDP by 1980, follow- ing the introduction of food stamps,Medicaid,Education for the Disadvantaged/Title I, and other major federal programs. Since then, children’s spending has increased more gradually, reaching 2.0 percent of GDP in 2005 and rising to a record 2.3 percent of GDP in 2009 as a result of the recession and increased investments under ARRA. Over this same period, non-child Social Security, Medicare, and Medicaid spending has increased from 2.0 percent of GDP in 1960 to 8.9 percent
in 2009 (these spending estimates exclude Medicaid spend-
ing on children and Social Security payments to children of retired and disabled workers to avoid double-counting).
Defense spending has fallen dramatically as a percent- age of GDP, from over 9 percent in 1960 to only 3 percent in 2000. Despite a sizable increase over the past eight years because of wars in Iraq and Afghanistan, defense spending was at 4.6 percent of GDP in 2009, about half the levels expe- rienced during the 1960s.
Federal spending has fluctuated over the 49-year period depicted in figure 8, ranging from about 17 percent of GDP (in 1965) to 23 percent of GDP (in 1985), with a new high for the period of 25 percent in 2009. In broad terms, the long-term decline in defense spending has allowed an in- crease in spending on both elderly and children’s programs
AN ANALYSIS OF FEDERAL EXPENDITURES ON CHILDREN