In the United States, poverty is more pervasive among children than among seniors. The official poverty rate in 2020 for adults 65 years and older was 9%, for children 18 years and younger 16%.
Though the sources and solutions in relation to poverty are complex, the dramatic age gap reflects differences in government policies and budgeting over many decades. And now, in both Washington and Raleigh, crucial legislative-executive negotiations hold out opportunities to propel the youngest children to better health, education, and upward mobility in life.
In its Kids’ Share 2020 report, the Urban Institute calculates that more than 60% of federal support for children comes from tax provisions such as the child tax credit and health spending including Medicaid. The federal government also supports children through such efforts as Head Start, Title One funding for disadvantaged students, and in-school breakfast and lunch.
“In 2019,” says the Urban Institute analysis, “9 percent of federal outlays (or $408 billion of $4.4 trillion in outlays) was spent on children. A much larger share of the budget (45 percent) was spent on retirement and health benefits for adults through Social Security, Medicare, and Medicaid. Most of these adults are seniors or disabled, but Medicaid also provides health insurance to several other groups of adults, including low-income pregnant women, parents, and in some states childless adults.”
As a major feature of its American Families Plan, the Biden administration advocates extending for five years tax credits for children under 6 from $2,000 to $3,600 and for children over 6 from $2,000 to $3,000. It also would make the child and dependent care tax credit permanent. Regular tax-credit checks to families reduce child poverty by 40% to 50%, according to independent analysis.
President Biden also proposes $200 billion for “universal” pre-K for all three- and four-year-olds. His plan would upgrade the paltry pay of child care employees, while it would also challenge states and localities to manage the complexities of a mixed system of private-sector child care and public preschool. After three years, according to the Biden proposal, pre-K would become jointly funded by the federal government and states, which would decide whether to opt in.
North Carolina doesn’t face such a decision immediately. Still at issue is the level of effort over the next two years in a state once regarded as a national leader in the early childhood arena.
The State of Babies Yearbook 2021 provides the demographic context for negotiations now taking place among Republican lawmakers, the Democratic governor, and their budget staffs. In North Carolina, says the report, nearly half of children up to three years old live in low-income households — 22% in poverty, and 24% with incomes less than twice the federal poverty line of about $51,500 a year for a family of four.
North Carolina devotes more than half its General Fund budget to enriching the lives of young people through elementary, secondary, and higher education. As a state, it has no system approaching the huge societal impact of Social Security and Medicare. Still, North Carolina has in Smart Start a strong delivery network for young children and their families and in NC Pre-K a research-supported model for early education.
Gov. Roy Cooper’s budget document observes that “NC Pre-K rates have been stagnant since 2012.” It also says, “The fundamental barrier to NC Pre-K expansion is inadequate resources to cover costs including: rising operating costs, recruiting and retaining qualified teachers, expanding facilities, and providing transportation.”
The governor proposes NC Pre-K rate increases of 16% over two fiscal years and an increase in slots in the second year — $26.5 million in 2021-22 and $45.4 million in 2022-23. In contrast, House and Senate budgets provide for 2% rate increases for the two fiscal years. Cooper would provide an increase of $20 million a year to Smart Start; the Republican-sponsored budget would provide $15 million a year.
What stands out is the sheer scope of federal assistance available from pandemic-recovery legislation. The governor announced this week $805 million in federally funded “stabilization grants” for childcare providers. Meanwhile, the outcome of state budget negotiations will determine the allocation of more than $500 million in federal funding that would go to support families on the childcare subsidy waitlist, to cover family co-payments for child care, and to provide staff bonuses.
Both uncertainty and opportunity abound. The news from Washington is that President Biden’s $3.5 trillion plan is likely to emerge at a somewhat lower top-dollar total — but at sufficient scope to allow for significant, transformative movement in enriching the lives of children and their families.
Whether funding comes from state or federal budgets, two imperatives support the expansion of early childhood care and education. The economy benefits from parents who work and, to do so, need quality care for their children. For the state to meet its educational achievement goals — third grade reading and post-high school degrees and credentials — the quest starts before children enter kindergarten and accelerates in families lifted out of poverty.