Cuts to Child Welfare Don't Bode Well for Future

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New America Foundation
By: Molly Carter
October 19, 2010

The asset team's Rachel Black and Reid Cramer's piece, "Can we Afford to Ignore Rising Child Poverty?" which debuted on AOL this week, asks a question that is of utter importance, and especially timely for Californians.

That's not only due to the Census Bureau's recent release of poverty numbers, but also because the piece follows Governor Schwarzenegger's October 8 signing of the 2010-2011 budget, along with $962.5 million in line item veto cuts to social services. The Governor's vetoes have prompted an uproar from legislators and child welfare advocates who have called the cuts cruel and hypocritical.

The Governor's vetoes this year included a $256 million cut in funding for childcare for parents who have successfully transitioned from CalWORKS to employment, an act that will eliminate childcare for approximately 55,000 children as of November 1. He also vetoed an $80 million restoration of funding for child welfare. These cuts are likely to exacerbate hardship when, according to the Public Policy Institute of California, 18 percent of California children are already living below the federal poverty line.

Schwarzenegger's veto of that $80 million restoration was a rejection of bipartisan action in both houses of the Legislature attempting to remedy his 2009 cut to child welfare funds, which when coupled with loss of federal funds amounted to a reduction of almost 10 percent of the department's budget.

The Governor has justified his cuts as necessary to ensure that California has a prudent reserve.

Admittedly, it's hard to deny that California's budget problem is dire. But as Black and Cramer's piece points out, the problem is that what the state may save now, it will undoubtedly pay for later when the social costs of child poverty begin to accrue. As cited in the piece, children who grow up in poverty have lower rates of educational attainment and are more likely to face unemployment as adults. Children who grow up poor are also more likely to become poor adults, and that costs the economy billions in lost productivity and other expenditures such as health care.

Put simply, reducing investments in children will do nothing to help the economy grow in the future. Whereas smart investments in youth, even small, are likely to pay off.

An example of one such targeted investment is San Francisco's Kindergarten to College program, which has set local and national media abuzz. The pilot's initial cost will only make up about one-thousandth of one percent of the city's budget. By providing $50 in college savings accounts for kindergartners, city leaders hope to encourage families to save. A study by Washington University in St. Louis has shown that children with college savings accounts are more likely to go, regardless of race or income level.

In times of deficit and recession, it may be hard to justify spending on social initiatives like this one. But Kindergarten to College demonstrates that investments don't have to be huge to hold promise for children. Targeted spending and programs that incentivize saving can help give children who grow up in poverty the chance for a different future- and the economy a chance for real recovery.

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This page contains a single entry by CFED published on October 20, 2010 3:27 PM.

New efforts under way to aid small businesses was the previous entry in this blog.

Teaching Kids About Money, What We're Up Against is the next entry in this blog.

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