Kids’ Share 2025

Federal Spending on Kids versus Other Types of Spending

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Federal Spending on Kids by Category and Program

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TABLE 1

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Spending on Kids by Level of Government

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Defining and Identifying Programs Benefiting Children

Like all budget exercises that allocate spending to categories, identifying spending that goes to children is a complex task that could be calculated using different methodologies. Each dollar spent on a particular program must be determined to go to a particular recipient. This task is relatively straightforward for programs that only spend directly on children—elementary education is a simple example.

But for programs that serve both children and adults, discerning who benefits from spending is more difficult. For example, how should one determine the amount of refundable tax credits, such as the earned income tax credit (EITC), distributed to adults rather than children?

As such, calculating spending on children and comparing data over time require a concrete and consistent set of rules and assumptions.

To be included in this analysis, a program (as a whole or in part) must meet at least one of the following criteria:

• Benefits or services are provided entirely to children (e.g., K–12 education programs or Head Start) or serve all age groups but deliver a portion of benefits directly to children (e.g., Supplemental Security Income [SSI] payments for children with disabilities or Medicaid services for children).
• Family benefit levels increase with family size (e.g., Supplemental Nutrition Assistance Program [SNAP] or low-rent public housing).
• Children are necessary for a family to qualify for any benefits (e.g., Temporary Assistance for Needy Families [TANF] or the child tax credit [CTC]).

Therefore, some services that may benefit children are excluded from our calculations because they do not directly rely on the presence of a child. For example, unemployment insurance and some tax benefits for homeownership may benefit children, but they do not meet the criteria for inclusion in our analysis because being a child or having a child are not prerequisites for these services and because having a child does not result in any additional direct monetary benefit. Further, we do not include programs generally classified as public goods that provide benefits to the general population, such as roads, communications, national parks, defense, and environmental protection.

In reporting federal expenditures on children, our most comprehensive measure includes tax reductions (e.g., reduced tax liabilities as a result of the CTC, the dependent exemption, or other provisions in the tax code) as well as direct outlays paid out for the refundable portion of tax credits and from programs such as Medicaid, child nutrition programs, and education programs.

In other places, we focus solely on budget outlays for children, such as when we report the share of total federal outlays spent on children. Some tax provisions are included in our estimates as outlays: the portions of the EITC and CTC paid out to families as a tax refund (and treated in our estimates as outlays rather than as reductions in tax liabilities), as well as the outlay portions of smaller tax provisions (e.g., outlays associated with Qualified Zone Academy Bonds). The division of tax subsidies between outlays (for the refundable portion of credits) and tax reductions (for the nonrefundable portion) adheres to standard budget accounting practices used by the OMB, Department of the Treasury, and Joint Committee on Taxation.

Collecting Expenditure Data

Expenditure data on program outlays largely come from the Technical Supplement to the 2026 Budget: Appendix and prior years’ appendices. Tax Expenditure estimates from the US Treasury are generally found in the Analytical Perspectives volume of the budget as well as in Department of Treasury’s Tax Expenditures, FY 2026. For programs not included in the appendix, we obtain expenditure data from the relevant agencies’ budgetary documents or their representatives (see technical appendix [PDF] for more details). For the analyses presented in this report, all budget numbers represent fiscal years, and we have expressed them in 2024 dollars unless otherwise noted.

Calculating the Share of Program Spending on Children

Some programs exclusively spend on children, while others benefit the general population regardless of age. We calculate each program’s share of expenditures going to children in one of the following ways:

• For programs that serve children only, we assume 100 percent of program expenditures (including benefits and associated administrative costs) go to children.
• For programs that provide benefits only to households with children, with the amount of benefits determined by the number of children (e.g., CTC), we consider 100 percent of program expenditures as going to children.
• For programs that directly serve people of different ages (e.g., Medicaid and SSI), we estimate the percentage of program expenditures going to children.
• For programs where benefits increase with the number of children present, we calculate the additional expenditures that are because of children’s presence.
• For other programs that provide families benefits without any delineation of parents’ and children’s shares, we generally estimate a children’s share based on the number of children and adults in the family, assuming equal benefits per person within the family (e.g., TANF and SNAP).

For large programs, such as SNAP, Medicaid, and SSI, we put significant effort into correctly estimating the share of spending that goes to children. In some cases, programs publicly release administrative data on spending on children, but we must occasionally contact federal agency staff directly to obtain participation data. Using the best data available, we then calculate spending on children. When program data are unavailable, other Urban Institute researchers provide carefully crafted estimates using, for example, the Urban Institute’s Transfer Income Model, Health Insurance Policy Simulation Model, and the Urban-Brookings Tax Policy Center Microsimulation Model.

Estimating Spending on Older Adults

Although Kids’ Share focuses on federal expenditures on children, we also have developed rough estimates of expenditures on older adults, namely, spending in 16 programs: Social Security, Medicare, Medicaid, SSI, SNAP, veterans’ benefits, railroad retirement, unemployment compensation, federal civilian retirement, military retirement, Special Benefits for Disabled Coal Miners, veterans’ medical care, annuitants’ health benefits, housing, the Administration for Community Living (previously the Administration of Aging), and the Low Income Home Energy Assistance Program. For 2021, we also include expenditures on economic impact payments (pandemic-related stimulus checks) administered through the tax code. As with our methodology for children, we estimate the share of the program that goes to older adults; for example, we subtract expenditures on children and disabled adults ages 18 to 64 to estimate older adults’ share of expenditures for Social Security, Medicare, and Medicaid.

However, except in estimates denoted as expenditures on “older adults,” our estimates for the adult portions of Social Security, Medicare, and Medicaid include all spending on people ages 19 and older.

Estimating State and Local Spending

Although this report focuses on federal expenditures on children, it also includes estimates of state and local outlays on children from 2005 to 2022. State and local expenditure data are typically delayed by several years, which is why we do not present more recent estimates.

Estimates through 2008 are drawn from the Rockefeller Institute of Government’s State Funding for Children Database, as described by Billen and colleagues (2007); estimates for 2009 and onwards are by the Kids’ Share authors. Both sets of estimates focus on state and local expenditures for pre-K through 12 education, state EITCs, and several joint federal–state programs (Medicaid, the Children’s Health Insurance Program [CHIP], Maternal and Child Health Block Grants, TANF, child support enforcement, child care, and several child welfare programs). Data sources for 2009 and after include the US Census Bureau’s Annual Survey of School System Finances, unpublished tabulations of Medicaid claims (Medicaid Statistical Information Statistics data), the websites and reports of various federal agencies, and information from the IRS compiled by the Urban-Brookings Tax Policy Center. We estimated shares of outlays on children for Medicaid, TANF, and CHIP; the other state programs were programs that could be assumed to spend 100 percent on children (i.e., child care, child welfare, and CHIP).

Calculating Projections

To estimate future trends in expenditures on children from FY 2025 to FY 2035, we primarily use the CBO’s The Budget and Economic Outlook: 2026 to 2036. Released in February 2026, these budget projections reflect “economic developments and laws in place as of December 3, 2025…[and] incorporate the effects of laws in place as of January 14, 2026.”

Because of the years reflected in these projections, some estimates for FY 2025 are from CBO’s The Budget and Economic Outlook: 2025 to 2035. In these cases, our projections for FY 2025 reflect laws in place as of December 4, 2024.

To project tax provision expenditures from FY 2025–35, we use the Urban-Brookings Tax Policy Center Microsimulation Model for major provisions and the Department of Treasury’s FY 2027 Tax Expenditure Estimates for smaller provisions.

We use different projection methodologies depending on whether a program is mandatory, discretionary, or a tax provision:

• Mandatory spending. The CBO baseline projections assume a continuation of current law, except certain expiring programs that have been continually reauthorized in the past are also assumed to continue. In general, for programs serving both children and adults, we assume that the share of expenditures directed to children for each program will remain constant from 2025 to 2035. However, we use the CBO’s detailed projections by age group for Medicaid, Social Security, and SSI to calculate the share of spending going to children in future years.
  
• Discretionary spending. With spending set by appropriations actions, the CBO traditionally uses a baseline assumption that spending is kept constant in real terms—that is, spending is based on the most recent year’s appropriation, adjusted for inflation. Our statements about future spending generally focus on spending as a whole and in broad categories, such as health and education, or types of spending, such as mandatory and discretionary, given the tentative nature of budget projections.
• Larger tax provisions. The Urban-Brookings Tax Policy Center Microsimulation Model provides 10-year projections for major children’s tax provisions including the CTC, EITC, dependent exemption, pandemic-related economic impact payments (stimulus checks), and child and dependent care credit. The model also projects revenue losses associated with the exclusion of employer-sponsored insurance (ESI) from income. These projections are made assuming continuation of current law as of July 5, 2025.
  
• Smaller tax provisions. We use the 10-year projections from Treasury’s Tax Expenditure estimates. (Note: Treasury’s estimates are the same as OMB’s Analytical Perspectives tax expenditure estimates used in previous Kids’ Share reports).

Adjusting Estimates to Enable Comparisons over Time

We present all estimates in terms of inflation-adjusted 2024 dollars using GDP data from OMB’s Historical Tables and CBO’s Budget and Economic Outlook. This allows us to compare expenditures over time.

Beyond real spending estimates, we also calculate a variety of other adjustments to compare data in common terms:

• Share of GDP: To understand how spending on children has changed relative to the size of the economy, we present estimates of spending as a share of GDP. We divide our inflation-adjusted spending estimates by the real GDP of the corresponding year, using data from OMB and CBO. Examining spending relative to the economy can reveal how spending changes as the economy grows.
• Per-person expenditures: To estimate how spending levels average out per person, we divide inflation-adjusted spending estimates by the total number of children up to age 18 and the total number of adults ages 65 and older in a given year, according to estimates from the US Census Bureau. When comparing these per-person estimates over time, we can see how spending has changed while accounting for population differences.

Changes in This Year’s Report

In this year’s report, we used CBO’s The Budget and Economic Outlook: 2026 to 2036 as our main source for projected expenditures from FY 2026 to FY 2035. We made this decision given these budget projections accounted for major changes in spending resulting from the 2025 budget reconciliation act. However, these CBO projections did not always include estimated or actual expenditures for FY 2025. For select programs (including Medicaid, SNAP, and SSI), CBO published actual expenditures for 2025, which we used in lieu of prior years’ projections. For all other programs’ FY 2025 projections, we followed the same methodology but used CBO’s The Budget and Economic Outlook: 2025 to 2035.

The 2025 budget reconciliation act created new Section 530A accounts or “Trump accounts.” These tax-advantaged investment accounts are available to children under age 18 who have a Social Security number. Children born between 2025 and 2028 are eligible for a $1,000 deposit from the federal government. Treasury estimates these accounts will cost $14.6 billion over the 10-year budget window, with the vast majority of costs coming from the seed funding. Although children are necessary for a family to qualify for this benefit, we do not include these accounts in Kids’ Share because the benefits from the accounts do not accrue to children. In almost all cases, no funds may be withdrawn from an account until a child reaches age 18. At that point funds can be withdrawn, typically with a penalty imposed. We have no basis for estimating the likelihood of this, rather than waiting to withdraw the accounts at retirement.

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