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Education Funding

Share of Federal Spending on Children Projected to Shrink, New Report Says

By Andrew Ujifusa — July 18, 2018 2 min read
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The share of federal spending that goes to programs and other benefits for children, including education funding, is expected to decline by more than 25 percent over the next decade, according to a new report published Wednesday by the Urban Institute.

“Kids’ Share” projects that Washington’s budget for health, nutrition, tax provisions, and education spending on children will drop from 9.4 percent of the fiscal 2017 budget to 6.9 percent after 10 years, a decline of 27 percent from 2017 levels. The Urban Institute expects spending on elementary and secondary education to dip to $37 billion from $42 billion, and for early-childhood education to drop to $14 billion from $15 billion, after adjusting for inflation. However, the organization also predicts spending on children’s health and income security is expected to rise somewhat in the coming years.

And the report says the recent decline in discretionary spending on education can be pinned at least in part on the Budget Control Act of 2011, which brought sequestration and new caps on federal spending. From 2008 to 2017, federal education spending dipped by 9 percent, the Urban Institute says. (See more about that figure below.)

“Most other children’s programs, including education, they don’t increase with more children or more need automatically,” said Cary Lou, a research associate at the Urban Institute, adding that without tax increases or changes to other parts of the budget. “There really is a squeeze in the budget on children’s spending, but also things like defense and other discretionary and mandatory programs for adults outside of the entitlements.”

These Urban Institute projections are made using the current law and using Congressional Budget Office projections, among other factors. We should also note here that the current federal budget covers fiscal 2018, which President Donald Trump signed into law in March and which includes an increase in the U.S. Department of Education’s overall budget up to nearly $71 billion. Trump’s election in 2016 sparked fears among some education spending advocates that the Education Department and other areas of the federal budget could get a significant haircut, although that hasn’t really happened so far in Trump’s tenure.

Spending on education and early education, are already a miniscule share of gross domestic product, clocking in at 0.22 percent and .08 percent respectively, and both are expected to decline over the next decade. Programs like Title I and Individuals With Disabilities Education Act grants are included in the Urban Institute’s classification of education spending, while things like Head Start are included in early education and care spending. Lou noted that federal education spending is “relatively targeted spending.”

“Federal education spending is mostly targeted at topping off the regular education spending, the base that is provided by states and localities, which itself varies quite a bit,” he said.

Here’s the share of Washington’s spending on education compared to other outlays in the tax code, health programs, and elsewhere, according to the Urban Institute:

The report looks at spending programs for children going back to 1960. Many major education and other children-focused programs didn’t exist at that time, the report notes, and federal spending on children has grown dramatically since that time. Federal education spending hit $76 billion in 2010 under the American Recovery and Reinvestment Act, also known as the stimulus.