Where Does the Money Go?

Where Does the Money Go?

Tuesday, March 21, 2017

Washington MonumentThe Trump administration’s budget blueprint triggered public outcry recently with massive cuts to scientific and medical research, the arts and programs that help the poor.

The cuts include eliminating some agencies and programs entirely, like the Low Income Home Energy Assistance Program (LIHEAP), the National Endowment for the Arts and the Corporation for Public Broadcasting.

An effort to counterbalance a $54 billion increase in defense spending, many other programs may still be on the chopping block (the proposal refers to several without specifically naming them).

With such deep and dramatic cuts proposed, discussion has naturally turned to how taxpayer money should be spent. This topic of federal spending has also shaped one Education and Human Development Bass Connections team’s yearlong work.

The team is led by Professors Elizabeth Ananat and Anna Gassman-Pines, both of the Sanford School of Public Policy, and comprises six undergraduates from interdisciplinary backgrounds, including psychology, computer science, economics, statistics and English.

Undergraduates Hayley Barton, Katie Becker, Tamara Frances, Robert Rappleye, Tim Rickert and Maria Suhai have worked alongside Ananat and Gassman-Pines to discover and document the sometimes-surprising ways that federal dollars are spent on young children in America.

Specifically, they’re examining how much money the federal government spends on children from birth to age eight by family income level.

The team is looking at both direct program expenditures and tax expenditures in a variety of areas including: cash and near-cash assistance, housing assistance, childcare, and nutrition programs. For example, Rappleye is examining tax spending on housing (including the mortgage interest tax deduction) while Rickert is examining the corresponding expenditures on housing by direct programs (including LIHEAP).

By dividing the project this way, each student can contribute in-depth analysis to the final report, and while the report is not yet ready for publication, Gassman-Pines offered some preliminary findings from the team’s work.

“We do spend more on lower income families than higher income families, as you might expect, but we actually spend a lot on higher income families,” she said.

For instance, the U.S. spends more money on the federal Child Care Tax Credit (which goes to parents in the top half of the income distribution) than on Head Start, the preschool program for poor children.

With the report of their findings expected to be ready in a month’s time, the team is hoping their insights will help shape policy decision-making.

“These are crucial sources of support for families with young children,” Gassman-Pines said, referring to programs like LIHEAP that help lower income Americans make ends meet.

Without these programs, families with young children will no doubt be stretched even thinner.

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