Public Spending on Children in Five Charts
July 18, 2018
How our government spends money—and who benefits—reflects our national priorities, but it’s not always clear where our tax dollars are going.
In these five charts, we take a look at federal and state spending on children through programs and tax reductions. Children can’t vote or lobby for public resources, but their well-being and development affect the future economic and social health of the country. Investing in their health, education, and stability should be a national priority.
So how much are we devoting to the kids’ share of public spending?
Only about 9 percent of the federal budget is spent on children.
Public investments contribute to children’s education, health, safety, and well-being and help ensure their basic needs are met in times of financial hardship.
In 2017, the federal government spent $375 billion on children through programs such as Medicaid and school lunch and through refundable tax credits like the earned income tax credit. That’s 9 percent of the $3.9 trillion federal budget.
A substantially larger share of the federal budget (45 percent) was spent on retirement and health benefits for adults through Social Security, Medicare, and Medicaid.
The share we spend on children is shrinking.
The kids’ share of the budget has been relatively small for decades, hitting a high mark of just 10.7 percent in 2010, and is projected to decrease further through 2028. Why? Because budgetary pressures are putting the squeeze on children’s spending.
Over the next decade, interest payments on the debt and spending on the adult portion of Social Security, Medicare, and Medicaid will consume a growing share of the budget. Meanwhile, under current law, the kids’ share of the budget is projected to drop from 9.4 percent to 6.9 percent.
Some of the best-known children’s programs account for only a small share of federal spending on kids.
A comprehensive picture of spending on children includes tax benefits that offer families financial assistance. Most federal support for children comes from these tax credits as well as from Medicaid and nutrition assistance—programs more often associated with adults—rather than classic children’s programs like Head Start.
Medicaid is the largest source of federal spending on children. We estimate that the program spent $90 billion (a fourth of total Medicaid funds) on children in 2017.
Taken together, tax provisions benefitting children far exceed any other major budget category. The largest child-related tax provisions are the earned income tax credit ($60 billion), the child tax credit ($49 billion), and the dependent exemption ($38 billion).
Two-thirds of public spending on kids comes from state and local governments, meaning that where you live matters.
State and local governments contributed 65 percent of total public spending on children in 2015 (the most recent year for which we have complete data). Most of this spending goes toward public education. States and localities also spend money on children’s health, income security, child care, and other investments, though not as much as the federal government.
Looking at spending per child, we see that, on average, the federal government spent $4,811 per child in 2015 (using 2017 dollars) while states and localities spent $8,888 per child.
This spending varies greatly by state, so while older adults across the country can count on Social Security being consistent, kids see different levels of investment in their education and well-being depending on where they live.
The federal government will soon be spending more on interest payments on the debt than on children.
Interest payments on the national debt are projected to exceed federal spending on children by 2020 and to more than double by 2028.
Over the next 10 years, spending on children as a share of the federal budget is projected to fall. Under current law, almost all projected growth in federal spending would go toward health and retirement programs for adults and interest payments on the debt, illustrating how much past policy decisions are driving our future spending.
These projected reductions risk shortchanging our investment in future generations.
Federal spending on children is an investment in the nation’s future. But that spending is being squeezed by growing interest payments and the increasing cost of health and retirement programs. Under current-law projections, we risk shortchanging our investment in future generations and leaving children with a legacy of debt.
But these projections need not become reality. Understanding how we’re investing in kids and protecting that investment in the future means looking at the full landscape of children’s programs and tax provisions and at the federal budget as a whole.