How Much Government Spending Goes to Children?
Programs to support children are a key component of the federal budget and represent a critical investment in the nation’s future. The latest Kids’ Share report from the Urban Institute provides a view of federal resources targeted towards children, placing such spending in the larger context of the country’s budget. In 2024, federal resources dedicated to children totaled $666 billion (consisting of $532 billion in spending and $133 billion in tax reductions). That support can help alleviate child poverty and support the development of the next generation of productive adults.
Here are the top six takeaways from the latest Kids’ Share report, with further detail below:
- Federal spending on children totaled $532 billion in 2024, or 8 percent of all federal outlays;
- Tax provisions account for a third of all federal expenditures on children;
- The federal government spends 6 times more per senior than per child;
- Federal spending on children is projected to decline as a share of the budget over the decade; and
- The United States spends more on interest on the national debt than on children.
Federal Spending to Support Children Is Only 8 Percent of the Budget
Federal spending on children (which excludes tax reductions) totaled $532 billion in 2024, or 8 percent of the federal budget. In comparison, 42 percent of outlays supported health and retirement benefits for adults 18 years of age and older, 13 percent to interest on the federal debt, and 13 percent to national defense.
Tax Provisions Account for a Third of All Federal Expenditures on Children
Tax provisions that support children constituted 33 percent of all federal expenditures (both outlays and tax reductions) on children in 2024, making it the largest category. Tax provisions that benefit children — primarily the child tax credit and the earned income tax credit — totaled $221 billion in 2024 (including $88 billion in refundable tax credits that are classified as spending).
Health programs — largely Medicaid and the Children’s Health Insurance Program (CHIP) — were the second largest category, comprising $139 billion, or 21 percent, of federal expenditures on children. Other major categories include:
- Education programs, such as the Education Stabilization Fund and Title I funding to schools with high percentages of children from low-income families, totaled 14 percent;
- Nutrition programs, such as the Supplemental Nutrition Assistance Program (SNAP), totaled 12 percent;
- Income security programs, such as Social Security survivors’ and dependents’ benefits, totaled 11 percent.
Other programs that benefit children — such as child care and early education, social services, housing, and training — received 9 percent of federal expenditures on children.
The Federal Government Spends Six Times More Per Senior Than Per Child
Federal spending per older adult age 65 and over is significantly greater than spending per child. In 2024, the federal government spent $6,860 per child and $40,050 per adult 65 and over. That amounts to 5.8 times more spending per older adult compared to children.
Federal Spending on Children is Projected to Decline as a Share of the Budget
Federal spending on children as a portion of the budget has approximated 10 percent since the early 2000s. However, that share is projected to decline by one-fifth over the next decade, from 8 percent in 2024 to 6 percent by 2035. The largest share of federal spending will continue to go towards Social Security, Medicare, and Medicaid spending on adults, with such spending set to increase from 42 percent in 2024 to 45 percent by 2035.
The United States Spends More on Interest Payments on the National Debt than on Children
One of the most damaging effects of rising debt is growing interest costs, which makes it harder to invest in the nation’s future. In 2024, spending on interest payments totaled $880 billion, or 3.1 percent of GDP: $348 billion (65 percent) more than federal spending on children. Growing interest costs are expected to rapidly outpace spending on children over the next 10 years.
By 2035, interest costs are projected to increase to 4.5 percent of GDP, while spending on children could fall to 1.4 percent. The federal budget is a statement of the nation’s priorities, and the United States is on track to more than double what it spends on net interest costs than on the next generation.
Conclusion
In the coming decade, the share of the federal budget devoted to children is projected to further decline as the share devoted to interest payments will rise. As the nation’s fiscal outlook continues on its unsustainable path, it is important that policymakers understand the way debt, deficits, and interest costs affect the federal government’s ability to invest in priorities, including the next generation.
Image credit: Karen Ducey/Getty Images
Further Reading
What Is a Value-Added Tax and Should the United States Have One?
Almost all developed economies have a value-added or similar consumption tax — but the United States does not.
Social Security Will Be Depleted in 6 Years — Here Are 3 Ideas to Fix It
Here are three options Congress could enact to close the funding gap.
The United States Spends More on Defense than the Next 6 Countries Combined
Defense spending by the United States accounted for 33 percent of military expenditures by countries around the world.