Federal Expenditures on Children Plummet After Pandemic Relief
A recent study by the Urban Institute reveals a significant decline in federal spending on children, from a peak of $11,690 per child in 2021 to $8,990 per child in 2023, adjusted for inflation. This drop is attributed to the expiration of pandemic-era relief measures, including tax provisions, social services, and housing programs.
The temporary aid had a profound impact on child poverty, which plummeted to 5.2% in 2021. However, with the expiration of these measures, child poverty rates have risen again to 12.4% in 2022. The largest decline in federal spending on children was seen in tax expenditures, followed by sharp drops in nutrition and modest changes in education funding.
Pandemic-era tax expansions, including stimulus checks and a more generous child tax credit, were significant contributors to the increased spending on children in 2021. However, these measures have largely been phased out, and the child tax credit has reverted to pre-pandemic levels.
Looking ahead, federal lawmakers may reconsider making the child tax credit more generous, with some proposals suggesting an increase to $3,600 or even $6,000 for families with newborn children. However, any changes will need to compete with other priorities, as federal spending on children is projected to decline as a share of gross domestic product by 2034.
Traditionally, states and localities have shouldered the bulk of spending on children, primarily through education. The federal government’s temporary increased role in spending on children during the pandemic has now reverted to its pre-pandemic level.
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