July 19, 2012 / 9:55 PM / 5 years ago

Smaller U.S. budget for smallest citizens - report

NEW YORK, July 19 (Reuters) - Federal spending on children has fallen for the first time in three decades, at a time when more than one in five U.S. children are already living in poverty, according to a report released on Thu rsday.

Even as total government spending rose in 2011, outlays and tax expenditures on children took a hit, said the sixth annual “Kids’ Share” report by the Urban Institute, a nonpartisan Washington, D.C.-based social and economic policy organization.

Another 4 percent decline in overall spending on children is expected in 2012 as the temporary boost from stimulus funds falls by $30 billion. Without legislative action, the amount spent on children will remain unchanged over the next decade, but will shrink to 8 percent of the overall budget.

The economic crisis reshaped spending, shifting funds to social safety net programs such as food stamps and income security for families with children and away from education, the report said. It warned of potentially damaging consequences.

“People sometimes think that you should just look at how much you’re spending on childcare, or child welfare, or something that has the word ‘children’ in it,” said Julia Isaacs, a lead researcher on the report. “But unless you look across the broader programs, you miss what’s happening to children.”

Overall federal outlays and tax expenditures for children fell by $5 billion, to $445 billion in 2011, for the first time since the early 1980s.

The report classifies spending on children as programs designated wholly for children, such as education or the children’s portion of Medicaid, the federal and state health insurance program for low-income families; family benefits that grow with each additional child; or programs that benefit only families with children.

Children’s share of the federal budget dropped to 10.4 percent from a three-decade high of 10.7 percent in 2010, while total government spending rose to $3.6 trillion from $3.52 trillion.

By contrast, the roughly $1.5 trillion spent on the elderly and disabled took 41 percent of budgetary outlays. The report projected that proportion to rise to 51 percent by 2022.

In 2011, there were 80 million children aged 18 and under, and approximately half that many elderly, those over 65.

Education spending dropped by $5 billion in 2011, largely due to an $8 billion fall in federal stimulus support to the states.

Over the next decade, the report predicted, the largest drops in federal spending will be in education. The cuts have left states scrambling to make up the loss of federal funds or let certain programs languish.

Last year, 17 states lost a total of $319 million of supplemental funding under the Temporary Assistance for Needy Families (TANF) program, which supports programs like child protective services, treatment for drug-addicted parents and teen health clinics, according to a forthcoming report by the bipartisan advocacy group First Focus.

For example, in Georgia, the loss of supplemental TANF funds blew a $37.3 million hole in the state budget for fiscal year 2013. While state funds restored about $25 million, 30 teen health centers will be closed this year, said Pat Willis, executive director of Voices for Georgia’s Children, a nonprofit advocacy group.

Arizona legislators backfilled $23.9 million in lost TANF money designated for child welfare with funds set aside for the developmentally disabled, said Karen McLaughlin, director of budget and research at Arizona’s Children’s Action Alliance.

Among developed countries, the United States ranks 15th in education spending as a percentage of gross domestic product and 32nd in public spending on family benefits in cash, services and tax measures, according to 2007 data from the Organization for Economic Co-operation and Development.

“It’s about your nation’s priorities,” said Bruce Lesley, president of First Focus, which along with the Annie E. Casey Foundation helped fund the Urban Institute report. “You really want to make investments that pay off in the long run and make the country a place that continues to thrive and do better. What this report highlights is that we are doing the exact opposite.”

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