1 Paying for Investments in Children Isabel Sawhill October 21, 2008

2 Trends in Federal Spending on Children Total real spending increased 1.4% Compares to 12.2% for all spending »Discretionary spending declined by 6.7% »Entitlement spending increased by 5.7% “The 45-year trend of declining investments in children as a share of the federal budget has continued unabated during the past five years.” First Focus, 2008, p. 6,Children’s Budget 2008

3 Spending on the Elderly will Crowd Out Spending on Children

4 Advocates for Children Must: Avoid wishful thinking »Re taxes »Re a war dividend »Re health care savings Forge a bipartisan compromise »Invest new resources in children linked with… »Reform of entitlements

5 Why This Makes Sense Elderly better off than in the past Younger families struggling The miracle of compound interest We can protecting vulnerable groups Reframe debate around life cycle view

6 Select Comparative Statistics for the Elderly and Non-Elderly

7 Source: Isabel V. Sawhilll, “Paying for Investments in Children,” in Big Ideas for Children: Investing in Our Nation’s Future, ed. First Focus (Washington, D.C.: First Focus, 2008).

8 Baby Boomers Are Affluent

9 The Miracle of Compound Interest Source: See Appendix A, Chart 3.

10 High Priority Investments and How to Pay for Them

11 Conclusion Must make cost-effective investments Must protect the vulnerable elderly and phase in any reform gradually But ….. A nation that gives priority to its elderly over its children doesn’t have much of a future.