Intergenerational Equity and Public Spending

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Elders Children

N

Intergenerational

Equity

and Public

Spending

A. E. Benjamin,

**PhD*; Paul W. Newacheck,**

DrPHt;

and

Hannah

Wolfet

From the !nstitute for Health and Aging and tlnstitute for Health Policy Studies, University of California, San Francisco

Both inside and outside of government, it has been widely held that the recent growth in spending for programs for older persons has come at the expense of commitments to programs for other

vulnerable groups, especially children.”2 What had

emerged a decade ago as concerns about the “gray-ing of the federal budget”3 and “uncontrollable

spending”4 for aging had by the mid-1980s

devel-oped a more pointed focus, involving the costs to one disadvantaged group (ie, children) or benefits to another (ie, the elderly):

Both old and young rely heavily on the government

for needed ... services. However, the ability of the

gov-ernment to provide these services .. . has shrunk, while

the elderly continue to expand in number and power. The net result is almost inevitably more for the old, less for the young.#{176}

Growing concern over issues of intergenerational

equity are rooted in a number of distinct but related

trends in population, prosperity, and health. First, there is growing awareness and evidence that the demographic composition of America has changed

significantly as the fertility rate has fallen from its

postwar peak in 1957 to a level barely half that by 1985,6 while both the numbers and longevity of elderly Americans have grown steadily. Bureau of the Census projections suggest the population older than 65 years of age will increase some 17% by the

year 2000. In contrast, projections indicate that the population younger than 18 years will increase at only one fifth the rate of the elderly into the next

Received for publication Jun 18, 1990; accepted Aug 14, 1990. This paper was presented at the 115th meeting of the American Public Health Association in New Orleans, LA, October 21,

1987.

Reprint requests to (A.E.B.) Institute for Health and Aging, University of California, N-531-Y, San Francisco, CA 94143-0612.

century.7 These changes in the demographic com-position of our society have caused many to argue

that the makeup of society is being fundamentally altered.

Second, income levels and the relative prosperity of elders and children seem to be moving in opposite

directions. There is considerable evidence that per-sonal incomes of elders have increased significantly

in recent years even after considering the effects of inflation. For example, since the initiation of the “War on Poverty” in 1965, the proportion of elderly living below the official poverty level has declined from 27% to 13% (see Fig 1). In contrast, incomes for families with children have grown much more

slowly and have actually declined in real dollars for

many families in recent years. For example, the

proportion of children living in families with in-comes below poverty level has increased from 17%

in 1966 to 21% in 1986.8

A third possibly divergent trend concerns the health status of children and elders. While changes in health status are more difficult to interpret than changes in population composition and income

1ev-els, there is ample evidence that our nation’s elderly

are living much longer than they were even a decade ago. Indeed, the fastest growing age group in Amer-ica today is the so-called “old-old”-those 85 years

30

28

26

24 22 20 18

16

14

12

1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986

Fig 1 Percentage of children and elders with family

incomes below the poverty level, United States, 1966 to

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and above.9 It is much more difficult to demonstrate such positive trends for children. In fact, it appears that the long-term decline in child mortality rates, especially infant mortality, has begun to slowly level off. Infant mortality in the United States continues to compare unfavorably with virtually all other western developed countries.’0 Evidence con-cerning childhood morbidity is also bleak when viewed relative to the elderly. For example, over the last quarter century the number and proportion of children reported to face disabling limitations in their activities because of chronic conditions has more than doubled, while the proportion of elders with disabling chronic conditions has remained

vir-tually 1,12

These trends in population, health, and prosper-ity have led to increased concern over funding priorities of public programs benefiting children and elders. Specifically, it is held by some that growth in public spending for programs that benefit primarily the elderly, especially Social Security and Medicare, has come at the expense of programs designed to benefit children, including education, health, and income maintenance programs.13 This view gained popularity following the massive cut-backs in domestic social welfare spending at the federal level during the early 1980s. It was widely perceived in the media and elsewhere that many of these Reagan-era budget cuts were directed at the most needy segments of the population, including children, while programs benefiting the elderly ap-peared to be largely unscathed by the “budgetary

axe”.’4 Some have argued that shifts in budgetary

priorities are only beginning now, with much more

significant changes awaiting the growth of the

el-deny population in the next century.”3”4

While there is clear evidence that the size of the elderly population is growing faster than that of children and that the elderly are enjoying relative prosperity (at least as measured by the population above poverty), proponents of the view that the elderly have benefited disproportionately from pub-lic spending have yet to back their arguments with convincing evidence. Advocates of greater spending for children have cited cutbacks in specific

chil-dren’s programs or increased expenditures for

se-lected programs benefiting the elderly, but no com-prehensive assessment of aggregate trends in social welfare spending on children and elders has been conducted to date.’5 Is there concrete evidence that social welfare spending benefiting the elderly has come at the expense of spending for children?

TRENDS IN SOCIAL WELFARE

EXPENDITURES

Public social welfare expenditures have increased enormously since the mid-1960s. A resurgence of interest in the poor brought about by President Johnson’s declaration of an “unconditional war on

poverty” combined with a rapidly expanding

econ-omy led to dramatic growth in expenditures in health, education, and welfare during the mid- and late-1960s. By the early 1970s, the economy began to stagnate, and political enthusiasm for many of the original Great Society programs of the previous decade began to wane. Spending continued to grow at a rapid rate nonetheless; even with the cutbacks in growth of federal domestic spending during the

1980s, social welfare expenditures climbed nearly

200% between 1965 and 1986 in constant dollars, and they currently total more than $800 billion dollars.

Because many public social welfare programs benefit persons of all ages, it is not possible to

calculate the exact shares of total social welfare

spending that benefit specific populations such as the elderly and children. However, by examining those major programmatic components of social welfare expenditures that are age specific in nature, such as Social Security payments and child nutri-tion programs, it is possible to approximate the shares of total social welfare expenditures that di-rectly benefit the young and the old. Following this approach, public expenditures for education (ex-cluding college), child welfare, Aid to Families With Dependent Children (AFDC), maternal and child health, child nutrition, and those portions of Social Security payments, food stamps, and Medicaid ex-penditures that benefit persons younger than age 18 are included as spending for children. Similarly, Medicare, Supplemental Security Income for the Aged, Older American’s Act expenditures, veterans’ pensions, and those portions of Social Security, food stamps, and Medicaid vendor payments that benefit persons 65 years and older are classified as expenditures for the elderly. While these represent the major programs serving the nation’s young and old, it should be recognized that data were limited to that classified by federal data sources, most

notably the Social Security Administration, and

that some programs serving both audiences, such

as public housing, cannot be divided in a

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$9000

5.8.000 5.7.000

$6,000

$5,000

$4,000 $3,000

5.2.000

$1,000

Children

1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985

Fig 3. Trends in per capita social welfare spending,

United States, 1965 to 1986 (1984 constant dollars).

those of philanthropic organizations, are excluded

(see Appendixes).

Despite the difficulties in precisely estimating shares of social welfare spending benefiting the young and the old, summing expenditures for the programs outlined above show some interesting trends since 1965. As can be seen in Fig 2, substan-tial shifts in total spending for the two age groups

have occurred over the last two decades; between

1965 and 1986 and the share of public social welfare spending directed at children declined from 37% to 24%, while the share allocated to the elderly rose

from 21% to 33%. Clearly, the elderly’s share of social welfare spending has been increasing at al-most the same rate that the children’s share has

been decreasing.

Shifts in the age composition of the population

explain part of these divergent trends. Between

1965 and 1986, the population 65 years and older grew by more than 10 million, or nearly 60%, while the population younger than 19 years diminished by 6 million, or almost 10%. Expenditures would then be expected to increase more rapidiy for the elderly over the study period. Another factor that should be considered is rising prices, especially for

medical care. Because a large and growing share of

social welfare expenditures for the elderly are for

medical care, constant (or inflation adjusted)

dol-lars should be used in comparing social welfare expenditures. The divergence of spending trends continues to be apparent, however, even when

so-cia! welfare expenditures are expressed in per capita

constant dollars (see Fig 3). (Expenditures for

med-40 j

:

,‘_‘ Children

r 30

::

NElders

15 -t #{149} #{149} t #{149} I # I #{149} ,,II #{149}I

1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985

Fig 2. Shares of social welfare spending benefiting

chil-dren and elders, United States, 1965 to 1986.

Elders

ical care programs including Medicaid and Medi-care were converted to constant dollars using the medical care component of the consumer price

in-dex. Expenditures for all other social welfare

pro-grams were converted to real dollars using the over-all consumer price index.) Between 1965 and 1986

per capital social welfare spending for children in-creased 107% in constant dollars. By comparison,

per capita social welfare spending for the elderly increased by 191% , or at three times the rate of overall economic growth as indicated by gross

na-tional product. Per capital social welfare spending on all age groups increased by 128%.

The trend data suggest that a trade-off has

oc-curred between spending on elders and children.

During the 1965 to 1986 period, the share of total social welfare spending benefiting elders increased at nearly the same rate that the share for children diminished. Visual examination of the divergent

pattern of spending between the two age groups

seems to indicate the trend can be usefully dissected into several separate and distinct periods in which different economic and political decisions concern-ing spending were made.

Four critical periods are delineated in Fig 3. The

first period extends from 1965 to 1971. During this

period social welfare spending grew dramatically for both groups and the relative shares going to the

elderly and children changed little. During the

sec-ond period, from 1971 to 1973, social welfare

spend-ing increased at a substantially higher rate for

elders compared with children. The next period covers 1973 to 1980 and represents a period of relative stagnancy for both groups; each group

maintained its relative share of social welfare spending and saw only modest increases in spend-ing after adjustments for inflation. Finally, the period from 1980 through 1986-the most recent year for which data are available-was

character-ized by declining real spending for children and

continued modest spending growth for elders.

Ex-amining the trend data in this fashion, more than

two fifths of the overall shift in per capita spending

is accounted for by the shifts occurring between 1980 and 1986, and nearly two fifths of the overall shift occurred between 1971 and 1973. The shifts in social welfare spending and the economic and

political context of each period are discussed in greater detail below.

1965 to 1971

From the mid-1960s through the early 1970s both children and the elderly benefited from the rapid

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Society” programs. During this period food stamps,

Medicare for the elderly and disabled, Medicaid for

the poor, and a multitude of other programs were established to improve the economic status of

dis-advantaged persons. Although social welfare

spend-ing increased at a slightly higher rate for the elderly during this period, both elders and children

expe-rienced substantial real growth in social welfare

spending. Overall per capita social welfare spending

increased 63% for children and 74% for elders be-tween 1965 and 1971. Hence, both groups shared

more or less equally in early growth of social welfare spending.

1971 to 1973

As social welfare spending for children continued to grow moderately in real dollars, social welfare spending for the elderly grew at an unprecedented rate between 1971 and 1973. While real per capita social welfare expenditures grew 11% for children,

a 26% increase was registered for elders between 1971 and 1973. Nearly 70% of this spending in-crease for the elderly was attributable to increases in Social Security benefits. These shifts reflected

Congressional concern over the eroding purchasing

power of Social Security benefits in previous years. At the time Social Security payment levels were not indexed to the consumer price index and hikes in monthly payment levels were legislated on an occasional and ad hoc basis. This 2-year shift in spending accounts for 38% of the overall decline in

the ratio of spending for children to that for the elderly which occurred over the 1965 to 1984 period.

1973 to 1980

The mid- to late-1970s represented a period of

minimal economic growth. The gross national prod-uct increased at an annual rate of only 1% when

adjusted for inflation; inflation averaged 9.3%

an-nually and the unemployment rate averaged 7%.

By historical standards, and especially compared with the 1960s, this period represented one of very limited economic expansion. The result was that government at all levels was unable to increase

social welfare spending much beyond that needed

to keep pace with inflation. Total social welfare

spending for all age groups increased 131% between 1973 and 1980, but after adjusting for inflation, total social welfare spending increased only 24%.

Per capita social welfare spending increased slightly for both the elderly and children, but the ratio of per capita social welfare spending for the two

groups did not change at all. In 1980, as in 1973,

each elder received a little more than one and a half

times as many social welfare dollars as each child.

1980 to 1986

Between 1980 and 1986, real per capita spending

for children did not change, while per capita spend-ing for elders grew by 12%. Children’s programs suffered the most between 1980 and 1982, when

there was an 8% decrease in real per capita

spend-ing. Part of this large reduction in per capita spend-ing was attributable to an unprecedented increase in the size of the population younger than the age

of 18, which had been decreasing steadily since

1967. By 1986, however, real per capita spending for children was essentially back to its 1980 level largely because of increases in expenditures for

education. While there was little change overall in

social welfare spending levels for children between 1980 and 1986, substantial cuts in income-tested

programs for children were authorized by the

Om-nibus Budget Reconciliation Act of 1981 and other legislation. The result was that real per capita

Med-icaid expenditures for children declined 4% between

1980 and 1986, while real per capita AFDC spending decreased 8% during this period. Interestingly, be-cause of changes in eligibility procedures, real per

capita Social Security payments to surviving chil-dren decreased even more steeply, by 25%.

In contrast, Social Security spending for elders increased by 17%, accounting for most ofthe overall

increase in per capita spending for elders, while

Medicare spending rose by 14% in real per capita dollars. Medicaid cuts affected the elderly as well

as children, but not as sharply; per capita Medicaid spending for the elderly declined by 6% , in contrast to the 8% decrease for children. By 1986, overall per capita social welfare spending for the elderly had risen to $8786, while that for children had stabilized at $2941. Shifts in spending patterns during this 4-year period account for more than two fifths of the overall decline in the ratio of

spending for children to that of the elderly between

1965 and 1986.

POLICY IMPLICATIONS

Trends in governmental social welfare spending

for children and the elderly between 1965 and 1986

suggest that expenditures have shifted over time

toward the elderly and away from children. Most of this shift in social welfare spending occurred

during two time periods: 1971 to 1973 and 1980 to 1986. The increase in spending for the elderly that

occurred in the 1971 to 1973 period was largely the

result of a one-time increase in Social Security payment levels. During this same time period social

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the expense of children. Of more concern is the divergence in spending patterns that occurred in

the early 1980s. During this period of shrinking

government revenues and growing deficits, the

fed-eral commitment to increasing real defense spend-ing and maintaining spending for the elderly at or

above the amount necessary to account for inflation

led to a reduction in the pool of resources available for other domestic spending, including spending for children. Concurrently, state governments were

hard pressed during the late 1970s and early 1980s with what has been termed the fiscal crisis. With

limited capacity to increase revenues (recall the tax

revolt), states had a difficult time maintaining

spending levels for programs benefiting children. Considering the overall trend of social welfare spending for elders and children, some lessons

emerge. In particular, it appears that spending for

children’s programs can keep pace with spending on elders during periods of economic growth (eg, the 1960s) and even during periods of economic malaise (eg, the 1970s). However, during periods of

economic downturn or stagnation combined with

governmental fiscal crisis (eg, the early 1980s),

programs for children are hit much harder by the

budgetary axe than programs for the elderly. These results suggest that, despite Congressional action

in 1989 to broaden Medicaid coverage for

low-income mothers and children, spending for

chil-dren’s programs will continue to be vulnerable to ,changes in the economy and government’s ability

to raise and spend revenues.’6

In contrast to this relatively dismal picture for children, spending for the elderly is likely to

con-tinue growing. Differences in the locus of authority

over spending levels for programs benefiting elders and children help explain the relative stability of

social welfare spending for the elderly and the

un-predictable nature of spending for children. Ex-penditure levels for the major social welfare

pro-grams benefiting children (eg, education, AFDC,

and Medicaid) are primarily determined at the state level, while spending decisions for the major social welfare programs benefiting the elderly (eg, Social

Security, Medicare) are primarily defined at the

federal level. While revenues at all levels of govern-ment are affected by cyclical changes in the

na-tional economy, federal revenues tend to be more

stable than those at the state of local level. As a

result, children’s programs tend to be more

vulner-able to cutbacks during periods of economic down-turn, such as the recession of 1982 to 1983. By

contrast, social welfare programs for the elderly, most notably Social Security and Medicare, are federally legislated and administered, with a rela-tively stable federal tax base. These differences

mean that in the recent budget-cutting years,

chil-dren’s programs were an easier target than the

stronger, centralized programs for the elderly. The funding viability of aging programs has been reinforced by another factor, the indexing of Social

Security benefits. This mechanism ensures that retirement benefits for the elderly are increased in

response to inflation, even though growth in the

federal revenue base may otherwise be limited. In-dexing of Social Security cash payment levels exerts a powerful influence on total social welfare

spend-ing for the elderly because Social Security payments

account for approximately two thirds of total social welfare expenditures for this group. The

fee-for-service character of Medicare reimbursement for

health care providers has had a similar effect on

federal spending trends on the elderly, albeit with

considerably less direct benefits for elderly benefi-ciaries.

What can be done to put children on an equal financial footing with the elderly? The analysis above suggests that children’s programs are vulner-able because they are largely based at the state and local levels, they are financed through general rev-enues rather than earmarked taxes such as the

Social Security payroll tax, and they are unlikely

to contain provisions for automatic inflation

ad-justments. These existing shortcomings suggest several possibilities for improving the status of children’s programs including shifting the revenue base for many children’s programs to the federal

level, earmarking revenues for children by

devel-oping (for example) a children’s trust fund, and guaranteeing by law minimum funding levels for

children’s programs. Each of these options is briefly

discussed below.

INCREASING FEDERAL CONTRIBUTIONS TO

CHILDREN’S PROGRAMS

Spending levels for most children’s social welfare

programs are determined at the state and local level. This is particularly true for the largest single component of social welfare spending for children-education-where only 6% of expenditures are gen-erated from the federal government.’7 Spending levels for other major children’s programs such as AFDC and Medicaid are also set at the state level even though the federal government contributes at

least half of the monies for these programs. While there is much to be said for localized control over

spending levels, states and localities have much less

dependable revenue bases than the federal

govern-ment, making it difficult to maintain spending

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Moving the revenue base for children’s programs from the state and local levels to the federal level

could help to provide a dependable flow of funds,

particularly if spending levels could be indexed to the rate of inflation. However, the federal

govern-ment currently is unlikely to offer additional federal

support for children’s programs, particularly with

the large existing federal deficit. In lieu of a unilat-eral move by the federal government to take

addi-tional financial responsibility, an option worthy of

consideration is exchanging financial responsibility

for certain children’s programs. For example,

pri-mary and secondary education, which has

tradition-ally been primarily a state and local responsibility,

could be made entirely a state and local program. In exchange, cash assistance and medical care could be made a federal responsibility. Such an exchange

of fiscal responsibility would favor the states in a

budgetary sense because existing state expenditures for AFDC and Medicaid exceed federal

expendi-tures for education. The difference is not large,

however, and the adverse budgetary impact at the federal level would be minimized if the shift in

fiscal responsibilities were phased-in over a period

of years. The benefits to children could be

substan-tial. Currently, states vary enormously in their

AFDC and Medicaid eligibility criteria. For exam-ple, the maximum AFDC payment level for a family of three ranged from $118 per month in Alabama to $633 per month in California during April 1988.18

Similar variations exist in Medicaid eligibility.

Un-der a federal program these inequities could be

greatly reduced.

This type of exchange in fiscal responsibilities is not unprecedented. The federal government took

over state responsibility for the Old Age Assistance and Aid to the Blind and Aid to the Permanently and Totally Disabled programs in the early 1970s.

These largely state-run programs were merged

un-der the federal Supplemental Security Program with a uniform minimum cash assistance level for

all recipients. In addition, eligibility was extended

for the first time to disabled children younger than age 18. More recently, the Reagan Administration proposed exchanging responsibility for the AFDC and Medicaid programs. Under this proposal, the federal government would take sole financial

re-sponsibility for the Medicaid program. In exchange, states would take full financial responsibility for

the AFDC program. Initial state reaction to this proposal was mixed and with an absence of strong

support the proposal was eventually dropped. The lesson is that any exchange of financial responsi-bility would have be be carefully thought through

to be successful.

EARMARKING REVENUES FOR CHILDREN’S

PROGRAMS

The two programs consistently responsible for

rising real expenditures for the elderly are Social Security retirement payments and Medicare. Both ofthese programs are financed through federal trust funds that are protected by law against being used

for any other purpose. No such trusts exist for

children now, but Sugarma&9 has proposed

adop-tion of a federally based Children’s Trust. The Trust would be funded by a 0.3% payroll tax on

employers and employees and is expected to raise a total of $20 billion annually. The payroll tax would

operate exactly as the current Social Security and Medicare payroll taxes. The Trust would be used to supplement existing revenues for children’s

pro-grams, such as the Maternal and Child Health block

grant and Medicaid, as well as to fund new

pro-grams to be determined by the Congress. The Trust

Fund would strictly be a financing mechanism and would not alter existing lines of programmatic

au-thority. The main advantage would be that many children’s programs would be fully funded or at

least partially funded through a stable and

“un-touchable” financing mechanism. In addition, the

Trust would not add to the existing federal deficit,

and revenues under the Trust could be collected

without significant added expense using the exist-ing collection mechanism for Social Security. One disadvantage is that the Trust would not necessar-ily grow in value over time, or even keep pace with

inflation. Periodically, Congress would have to

leg-islate increases in the payroll tax rate or the wage

base as it now does for the Social Security and

Medicare Trust. A second disadvantage is the

re-gressive nature of the payroll tax. Payroll taxes, as

currently used to finance the trust funds for Social

Security and Medicare, place a disproportionate

burden on low- and moderate-income families. The payroll tax could be made more progressive but doing so would represent a major departure from

existing law. Finally, some observers worry about

reliance on a single source of finding, inasmuch as

this may increase rather than decrease benefit vul-nerability, especially during periods of economic

and political malaise.

CONCLUSION

All of the reform options discussed above

repre-sent modest, partial solutions to complex issues involving public policy toward children and the elderly. Data presented on public expenditures for the young and old cast some light on the course of

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theme not original to this analysis, namely that expenditures for children have lagged behind those for the elderly. What may be new is the argument that differences in the locus of authority for pro-grams that benefit elders and children help explain the relative stability of social welfare for the elderly

and the unpredictable nature of spending for

chil-dren. The problem for public policy, consequently, has less immediately to do with the trade-off con-ceptualizations of those who view vulnerable groups as pitted against one another and more to do with

how we recognize and remedy the ways in which we

disadvantage children by the structure of our policy

and politics. Conservative ideologies that require

that policy discretion reside with the states rather than the federal government simply reinforce pat-terns of unpredictable and inadequate spending for children. There are a variety of explanations

re-garding why the American polity continues to be ambivalent about the relationship between central

government and its young.14’2#{176} Only when health

and welfare issues related to children are redefined

as matters of sustained federal responsibility will policy commitments to children be placed on equal

footing with those to the elderly.

ACKNOWLEDGMENT

Supported, in part, by a grant from the Academic

Senate of the University of California, San Francisco. The data, analyses, and opinions expressed here in no way represent those of the funding or data collection

agencies.

REFERENCES

1. US Congress House of Representatives Select Committee on Aging. Protecting America’s Aged, Children and Poor:

Multigenerational Needs, Multigenerational Solutions. Washington, DC: US Government Printing Office; 1986. Publication 99-540

2. Toichin M. Aid to elderly divides young, old and politicians. New York Times. June 23, 1988

3. Hudson R. The ‘graying’ of the federal budget and its con-sequence for old-age policy. Gerontologist. 1980;18:428-440

4. Derthick M. Uncontrollable Spending for Social Services. Washington, DC: The Brookings Institution; 1975 5. Gustaitis R. Old vs young in Florida: preview of an aging

America. Saturday Review. 1980;2:10-14

6. US Bureau of the Census. Table 82: Total fertility rate and intrinsic rate of natural increase: 1940 to 1985. Statistical

Abstract of the United States: 1988. 108th ed. Washington, DC: US Government Printing Office; 1987:59

7. US Bureau of the Census. Table 16: Projections of the total

population by age, sex and race: 1987 to 2000. Statistical Abstract of the United States: 1988. 108th ed. Washington, DC: US Government Printing Office; 1987:15

8. US Bureau of the Census. Characteristics of the population below the poverty level. Current Population Reports. Series P-60. Washington, DC: US Government Printing Office; 1988

9. Suzman R, Riley MW. Introducing the oldest old. Milbank

Memorial Fund Q. 1985;63:177-186

10. National Commission to Prevent Infant Mortality. Death Before Life: The Tragedy of Infant Mortality. Report of the National Commission to Prevent Infant Mortality.

Wash-ington, DC; August 1988

11. Newacheck P, Budetti P, Halfon N. Trends in

activity-limiting chronic conditions among children. Am .1 Public

Health. 1986;76:178-184

12. Wilson RW, Drury TF. Factors affecting the use of limita-tion of activity as a health status measure. In National

Center for Health Statistics: Silver Anniversary of the

Na-tional Health Survey Act. Hyattsville, MD: National Center for Health Statistics; 1981

13. Preston H. Children and the elderly in the US. Scientific

American. 1984;251:44-49

14. Axinn J, Stern MJ. Age and dependency: children and the

aged in American social policy. Milbank Memorial Fund Q.

1985;63:648-670

15. Bane MJ, Wilson JB. Trends in public spending on children and their families. In: Nelson R, Skidmore F, eds. American Families and the Economy. Washington, DC: National Acad-emy Press; 1983

16. Benjamin AE, Estes CL, Newcomer RN, Swan JS. Public

policy in fifty states. J Gerontol. 1980;35:928-934

17. US Bureau of the Census. Table 553: Social welfare expend-itures, by source of funds and public program: 1980 to 1985.

Statistical Abstract of the United States: 1988. 108th ed. Washington DC: US Government Printing Office; 1987:335

18. Hill IT. Reaching Women Who Need Prenatal Care. Wash-ington, DC: National Governors’ Association; 1988

19. Sugarman J. Financing Children ‘s Services: A Proposal to

Create the Children ‘s Trust. Olympia, WA: State of

Wash-ington (Dept of Social and Health Services); 1988 20. Rosner D. Health care for the ‘truly needy’:

nineteenth-century origins of the concept. Milbank Memorial Fund Q.

1982;60:355-385

Appendix 1: Major Components (%) of Social Welfare Spending, 1984

Children Elderly

Lower education 77.2 Social Security 65.8

Aid to Families With Dependent 8.3 Medicare 24.7

Children

Social Security dependent benefits 5.1 Medicaid 5.7

Food stamps 3.6 Veterans’ Pensions 2.2

Child nutrition 3.0 Supplemental Security Insurance,

Old Age Assistance

1.3

Medicaid 2.2 Older Americans Act 0.5

Maternal and Child Health, Child 0.1 All other 0.2

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Appendix 2: Sources, Definitions, and Limitations

of Social Welfare Spending Data

Total Social Welfare

Social Security Bulletin Annual Statistical Supplement

1984-85, Table 2: “Social welfare expenditures under

public programs, fiscal years 1950-1983” and same table in earlier volumes; advance data from 1985-86

Supple-ment. Expenditures from federal, state, and local

reve-nues and trust funds and other expenditures under public law; includes capital outlays and administrative

expend-itures, unless otherwise noted. Through 1976, fiscal year

ended June 30 for federal government, most states, and

some localities; for federal government, beginning 1977, fiscal year ended September 30 (data for transition period

July 1-September 30 not included).

Social Security

Social Security Bulletin Annual Statistical Supplement 1984-85, Table 18: “Total benefits paid from OASI Trust Fund, by type of benefit, 1940-84.” Elderly’s portion includes payments to retired workers, their wives and

husbands, surviving widows and widowers, surviving

par-ents, and special age-72 beneficiaries. Some survivors

may be younger than 65 years of age. Children’s portion

includes payments to retired workers’ children and

sur-viving children.

Lower Education

Statistical Abstract of the United States 1986, Table

207: “School expenditures, by source of funds: 1960-1985” and same table in earlier volumes. Elementary and

sec-ondary education and special programs provided by school systems. Includes federal, state, and local

expend-itures on public education.

Medicaid

Health Care Financing Review 6 (Spring 1986), Table

7: “Medicaid vendor payments by recipients’ eligibility

category: fiscal years 1972-1983” and advance data for

1984. Data begin 1972. Elderly’s portion includes pay-ments to recipients aged 65 or older; children’s portion includes payments to dependent children young than age

21.

Aid to Families With Dependent Children

Social Security Bulletin 48 (December 1985), Table

M-28: “Public assistance: total money payments, by

pro-gram, and emergency-assistance payments, 1945-83” and advance data for 1984.

Medicare

Unpublished data from Health Care Financing Admin-istration, March 1986. Data begin 1966. Estimated

hos-pita! and supplementary medical insurance

disburse-ments. Aged beneficiaries only.

Food Stamps

Bureau of the Census, Current Population Reports,

Series P-60 No. 150, “Characteristics of households and

persons receiving noncash benefits,” Tab!e 5, and same

table in earlier vo!umes. Data begin 1979, first year food

stamp values available by age group. Children’s portion includes the value of all food stamps going to families with children younger than 18. Elderly’s portion includes value of a!! food stamps going to families with

household-ers 65 or older.

Supplemental Security Income

1984-1985, Table 5.6: 201, “Average monthly number of

recipients, total number of recipients, total amount of

cash payments, and average monthly payment.”

1965-1973 data for Old-age Assistance; in 1974 superceded by

the Supplemental Security Income (551) program. 1974-1984 551 data for Aged category only.

Veterans’ Pensions

Statistical Abstract of the United States 1986, Table

605, “Federal benefits for the aged, by type of benefit:

1971 to 1975” and same table in earlier volumes. Contin-uous data begin in 1973; includes “Other Veterans”

corn-pensation for aged beginning 1980.

Older Americans Act

Developments in Aging 1986 Volume I, Part V, Table

4, “Older Americans Act Appropriations, fiscal years 1970-1984” and same table in earlier volumes. Data begin

1966. Includes spending under Titles II through VI.

Ben-efits persons aged 60 and older.

Maternal and Child Health

1984-1985, Table 2, “Social welfare expenditures under

public programs, fiscal years 1950-1983” and same table in earlier volumes; also advance data from 1985-86

Sup-plement. Includes services for crippled children.

Child Nutrition

public programs, fiscal years 1950-1953” and same table in earlier volumes; also advance data from 1985-86

Sup-plement. Surplus food for schools and programs under

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Child Welfare Population

public programs, fiscal years 1950-1983” and same table

in earlier volumes; also advance data from 1985-86

Sup-plement. Represents primarily child welfare services

un-der the Social Security Act. Beginning 1968-69, excludes

administrative expenses.

Population Estimates and Projections Series P-25 No.

985, “Estimates of the population of the United States

by age, sex and race,” Table 3, and same table in earlier

volumes. Civilian population only. Children include re-lated children younger than 18 years of age in families;

elderly include total persons aged 65 and older.

Gross National Product

Poverty

Consumer Income Series P-60 No. 152, “Characteristics

of the population below the poverty level,” Table 1, and

same table in earlier volumes. Children include related

children younger than 18 years of age in families; elderly

include total persons aged 65 and older.

Social Security Bulletin 47 (December 1984), Table

M-37, “Gross national product and personal income, by type,

1950-84.”

Consumer Price Index

Social Security Bulletin 48 (June 1985), Table M-39,

“Consumer price index for urban wage earners and cler-ical workers, 1940-1985.”

A STARTLING RISE IN THE US BIRTH RATE HAS EXPERTS PUZZLED

The annual number of births in this country has climbed to 4 million for the first time since 1964, the last year of the post war baby boom, amid signs of a surprising increase in childbearing among women of every age group and in all regions of the country.

The National Center for Health Statistics estimates. . .a jump of 4% from the

previous year.

. . .The biggest bulge in babies in 26 years is beginning its movement through

society, with all the attendant demand for health care services, education, and

consumer goods. And unlike the boom of the 1950s and 1960s, this wave comes at a time when most mothers are in the work force creating much heightened

need for child care providers and facilities.

. . .The issue that divides population researchers is whether the new numbers

reflect only the continued phenomenon of delayed childbirth among women in

the baby boom or a change in behavior for younger women in their 20’s.

. ..Some experts also speculate that immigration could be driving some of the

increase.

Vobejda, B. Washington Post. National Weekly Edition. January 28-February 3, 1991:39

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1991;88;75

Pediatrics

A. E. Benjamin, Paul W. Newacheck and Hannah Wolfe