Spending on children to shrink: study

By Jeremy Pelofsky

WASHINGTON (Reuters) - U.S. federal spending on nutrition, education and health care programs for children is on course to shrink as a share of the total budget over the next decade, researchers said on Thursday.

A day after two Democrats introduced a bill to boost health coverage for children, a new report by the Urban Institute showed that children's programs would represent 13 percent of domestic spending by 2017, down from about 15 percent in 2006.

That translates into billions of dollars.

"If you keep the budget on its current path, children are going to get squeezed," said Eugene Steuerle, a senior fellow at the institute. "To the extent you think investment in children is an important policy agenda, you're squeezing and putting enormous pressure on that part of the agenda."

Programs focused on children totaled $333 billion last year and would increase $36 billion by 2017 under current law, the study said. Other domestic spending would rise to $2.4 trillion from $1.8 trillion.

However, Steuerle said that if the Medicaid low-income health care program was not included in the total, spending on children would actually decrease by 2017.

Part of the problem is that children's programs often lack automatic funding increases or annual renewal, unlike some major domestic spending, the study said.

"I think the key findings are that investment in children has never been a high federal priority, but it would be one that's going to clearly decline as we move toward the future unless we really get our budget house in order," Steuerle said.

The study also found that spending on children had shifted to in-kind benefits such as food stamps and subsidized housing rather than tax credits, exemptions and welfare cash payments.

The Bush administration and Congress are working to find ways to provide health care services to 9 million children who have no insurance coverage and resolve complaints from states who fear a shortfall of billions of dollars in aid.

State governors have said the $5 billion in additional funding the Bush administration has pledged for each of the next five years for the State Children's Health Insurance Program or SCHIP is insufficient.

New York Sen. Hillary Rodham Clinton, who is seeking the 2008 Democratic presidential nomination, unveiled legislation on Wednesday with a colleague in the House of Representatives aimed at covering uninsured children through existing programs.