Kriston Capps is a staff writer for CityLab covering housing, architecture, and politics. He previously worked as a senior editor for Architect magazine.
Federal spending on America’s children is heading down, and the drop in funding could be dramatic.
Raise the banners and strike up the band, because the “War on Poverty” is won. Mission accomplished! And that means it’s time to hack down the safety net that saved the nation’s poor.
That was the head-turning takeaway from a report last week from the White House Council of Economic Advisors that declared the War on Poverty “largely over and a success.” The report diverged sharply from what even other Republicans say about poverty, to say nothing of economists. (“Do these people ever visit the real world?” Paul Krugman asked.)
But while the language marked a rhetorical reversal of the usual conservative efforts to undo Johnson-era programs designed to aid low-income Americans—which hinge on the conceit that federal aid is wasteful, not that it nailed it—the intent is largely the same. This was an argument for work requirements in welfare, one of the Trump administration’s top domestic priorities.
The Trump administration’s declaration might also come as a surprise to the millions of American children (still) living in what looks and feels a lot like poverty. Kids are major beneficiaries of most safety-net programs for food, housing, and healthcare. Some 44 percent of the people who receive food stamps through the Supplemental Nutrition Assistance Program are children, for example. Cutting spending on poverty means cutting spending on kids—a downward trend that is already happening.
...While poverty has been decreasing, especially once using the most accurate measure which is based on consumption (including government benefits) pic.twitter.com/gTvj2nZ9OU— CEA (@WhiteHouseCEA) July 12, 2018
Declaring an end to the war on poverty allows federal agencies to pivot to other goals, namely “self-sufficiency,” which is a watchword for setting strict work requirements for aid. Congress has yet to pass draconian cuts to aid, but spending on children is already declining, even as overall federal spending continues to rise since the Great Recession. A new report from the Urban Institute finds that by 2020, the federal government will spend more on interest payments on its debt than it pays to provide support for children.
Children will receive just one cent of every dollar from the projected $1.6 trillion increase in federal spending authorized under the Trump administration, according to the report. And over the next decade, the children’s share of the budget will drop from 9.4 percent to 6.9 percent.
That dip is happening even without factoring in the changes now being proposed by chief White House economic advisor Kevin Hassett* and company—those who argue that poverty’s a thing of the past. If and when work requirements and cuts to aid are implemented, the outlook for kids will only get darker.
“If we spend less on children, we’re investing less in the next generation,” says Julia Isaacs, senior fellow at the Urban Institute. “We want children to be well fed, well housed, and well educated.”
Isaacs, the co-author of the Urban Institute’s report on current and future federal expenditures on children, adds that cutting spending on kids has implications for future growth. “We can think of children as human capital, if we want to be economists. And if we don’t invest in human capital, it may come back to bite us in the long run.”
Medicaid is the largest source of federal expenditures for children: about $90 billion in 2017. Tax provisions make up another big chunk of spending on kids, namely the earned income tax credit ($60 billion in 2017), the child tax credit ($49 billion), and dependent exemptions ($38 billion). Other large categories of federal spending on kids include nutrition, education, and income through various programs. Spending in these discretionary categories is dropping already. Local and state governments—who pay the lion’s share of spending on education—will be left to make up the gap.
Federal spending on children increased sizably between 1960 and 2010, thanks to a mix of demographic and political forces. Over the next decade, though, this trend will reverse as millions of Baby Boomers enter retirement and spending on older adults under Social Security, Medicare, and Medicaid is projected to soar. Interest payments on the rising federal debt will also go up.
These projections don’t take into account the newer policy priorities under the Trump administration, which would shift spending away from children even more dramatically. For example, the House version of the farm bill would cut spending for food aid dramatically and establish strict work requirements for recipients.
“More than three-quarters of the people [who receive SNAP aid] are either kids or people living with kids,” Isaacs says. “If we were to enact the farm bill that cuts SNAP so much, then the numbers would be worse. This decline is happening before we take into account any additional changes.”
If the White House report is any indication, its war on welfare is only just beginning. Getting to a near-zero figure for poverty requires some creative math, namely a cherry-picked “consumption-based” measure for poverty based on families’ spending. This measure is wildly out of step with traditional and official measures for poverty. As researchers from the University of Michigan show, a consumption-based poverty measure indicates that poverty was worse during the early 2000s than during the Great Recession.
Similarly, the report’s call for work requirements assumes that work-able adults who receive aid aren’t working. Organizations such as the Kaiser Family Foundation say otherwise. In the end, children will be hurt by the policies set under these faulty premises.
More than 14 million people under age 17 were living below the federal poverty limit in 2016, according to the U.S. Census Bureau. That number has fallen since 2012, but still represents about 20 percent of all children in the U.S. The share of federal spending for children that reaches low-income families has grown over time— meaning that the war on poverty is achieving results. That doesn’t mean it’s over: Spending cuts on food, housing, and healthcare will hurt children disproportionately. Kids can’t live on alternative facts alone.
*CORRECTION: An earlier version of this story named Gary Cohn as the chair of the Council of Economic Advisors. He left the office in 2017, and left the White House in March. Kevin Hassett now serves as the chief White House economist.