A new bipartisan report calls for "rewriting the generational contract" to increase investments in America’s children significantly by shifting funds from programs that now go toward supporting older, wealthier adults.
In the report, "Rebalancing: Children First," leading scholars convened by two of the country’s most respected think tanks propose directing more national funds to help children. Currently, more than 40% of the federal budget flows to Americans over the age of 65, compared to only 7.4% spent on children.
The consensus report was a culmination of three years of work by a group of policy experts brought together by the American Enterprise Institute and the Brookings Institution. They focused on areas as diverse as household resources, family structure, early brain development, and health. David Deming, the Isabelle and Scott Black Professor of Political Economy at Harvard Kennedy School, brought his expertise on education to the working group.
The scholars make proposals for increased investment in areas such as the child tax credit, the Supplemental Nutrition Assistance Program (SNAP), public health insurance for children, and apprenticeships and technical education. But the report, which supports budget neutrality, also suggests how to rebalance the country’s existing investments, including some reductions in spending on older Americans, whose wealth has grown considerably over recent decades, and reforms to the country’s tax code.
Areas of agreement and sticking points were a theme of the consensus paper, in which working group co-chairs and members wrote: “No individual group member wholeheartedly supports everything in this report, and in many cases individual members oppose particular items in the report. But all members agree that the recommendations and conclusions in the report, taken as a whole, would improve on the status quo.”
Deming, who is also the Kennedy School’s academic dean and faculty director of its Malcolm Wiener Center for Social Policy, and other working group members discussed the findings in the report at a livestreamed launch event on February 8 hosted by the AEI. The event also featured Sen. Mitt Romney, Republican of Utah, and Cecilia Rouse, who is chair of President Biden’s Council of Economic Advisors.
“Childhood is a consequential time to make investments that last a lifetime,” co-chair Diane Whitmore Schanzenbach of Northwestern University said. “All agree on the need to rebalance investments toward children.” Whitmore and Rouse discussed the importance of public investment in children as part of President Biden’s economic agenda. When we don’t invest in children, Rouse said, “there is an opportunity cost.” The risk, Rouse said, is that they will not flourish as adults.
“Public investment in children is like cultivating a garden. If you invest wisely, it means you can reap what you sow, and maybe more.”
Working group co-chair Michael Strain of AEI then spoke with Romney about the senator’s proposal to expand the child tax credit in order to address declining birth rates in America. “We want to provide help to people who want to have kids but are concerned about their financial capacity to do so,” Romney said.
Richard Reeves of the Brookings Institution moderated a panel conversation with four of the working group members: Deming (on education), Duke University’s Lisa Gennetian (on childhood brain development), Indiana University’s Kosali Simon (on health), and AEI’s W. Bradford Wilcox (on marriage).
The panelists shared takeaways from their areas of expertise.
“Public investment in children is like cultivating a garden,” Deming said. “If you invest wisely, it means you can reap what you sow, and maybe more.” Deming said that, like a garden, children require the right conditions to thrive, but also require effective spending of resources. The working group agreed, Deming said, that policies should focus on children from low-income families and ensure that investments are used wisely on interventions that have been proven to work, including investments in teachers, tutoring, and differential instruction.
“Money really matters,” Deming said. “Spending on poor kids matters more, but it also matters how the money is spent.”
“We agree there is a concerning lack of balance in prioritizing children,” Simon said. “I want to emphasize it is very much the case in health spending too, and this did not improve during the pandemic.” Simon noted that investments in health should also include support for parents’ mental health: “Many kids grow up in families that experience trauma. The impact of the opioid epidemic has been felt even before the pandemic.”
Simon explained that public financing of children’s health insurance also makes a difference, as does prenatal health support for expecting parents.
Family stability and marriage
The working group agreed on the importance of marriage in improving outcomes for children, Wilcox explained: “People are more likely to avoid poverty and prison and flourish in school when they have two married parents.” However, he said that there is a “marriage divide” in the United States today. Wealthier and more educated people are more likely to marry than low-income adults with less educational attainment. This gap adds instability to poverty, affecting the most vulnerable children.
Wilcox emphasized the need for bipartisan policies that support family stability and marriage and that encourage “education, work, and marriage before the baby carriage.”
Gennetian discussed how the science of the developing brain could help shape policies related to children—for both young kids and teenagers. “The science is important,” she said. Gennetian also explained that the role of families, the influence of other adults such as teachers, and safe and enriching environments are “all key ingredients for development.”
Despite the group’s many agreements, Gennetian noted there were also creative tensions. “While there was agreement on supporting success for each child,” she said, “it was really difficult to reach consensus on the way forward.” An approach might focus on financial support, education, early development, or a combination of these elements, for example. “Children need different things at different times,” she said. “This holistic view is really hard to map onto policy.”
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