While 2002 was a year of transition from boom to bust, 2003 is shaping up as the year when the economic slowdown really hits home, with deep cutbacks in programs and services for families and their communities that will affect children for years to come.

From Boom to Bust
With the economy faltering, conservative and progressive political rhetoric in 2003 is likely to be very similar—with calls for boosting the economy and strengthening economic growth. But those on the political right and left have very different ideas for how to make that happen.

The Administration is poised to call for more tax cuts, along with steep cutbacks in federal domestic spending to keep deficits down. A focus on income tax reductions will primarily benefit upper-income taxpayers. Tax cuts have long been used as a tool for stimulating the economy, but are not always effective, in part because there is no guarantee that those who benefit will use the money they save in ways that generate economic growth.

Progressives are likely to call for ways to put more money in the hands of low- and moderate-income families, who pay less in income tax but bear a heavy burden from other forms of taxation such as the sales tax. Part of the reason for that theory is that these families are considered more likely to spend any additional money that they have, providing a stronger economic stimulus for each dollar of foregone revenue. In addition, progressives will urge increased spending for important short-term projects like repairing schools or building moderate-income housing units to create jobs and get the economy moving again.

How Will Policymakers and Advocates Respond?
Early in 2003, one area of agreement may be in extending unemployment benefits. President Bush called for such an extension after the 107th Congress had adjourned, after failing to extend benefits beyond December 28, 2002. Democrats have repeatedly called for an extension.

Other areas of agreement may be hard to find.

In 2003 child advocates will be focused on helping families make ends meet through hard times. They are working to protect the gains of the last few years in state and federal assistance that has helped parents pay for good child care and good health care for their families. They will argue that cost-effective investments in early learning, education, good preventive health care and job training offer greater returns that strengthen families, communities and the economy as a whole.

Child advocates are also deeply concerned about making sure the recovery is robust enough to reach low- and moderate-income families—the families in which most American children live.

Check out Connect for Kids' Background Information and Fast Facts [1] on child care, health care, education and other areas important for children and families.

State Budget Woes Will Cut Deep
Despite advocates' best efforts, in 2003 expect to see more headlines on how states are cutting cash for local communities, for higher education, for child care subsidies, for after-school and family literacy programs, for services for abused and neglected children, and for health care coverage for low-income families.

There is no disagreement over the fact that the states are trying to deal with their worst deficits since World War II. Because most states, by law, have to balance their budgets, state leaders are making painful choices.

During the economic growth of the late 1990s, many states were able to both cut taxes and put together a range of supports for working and out-of-work families, including help with child care, transportation, training and expanded health coverage.

While most governors are very reluctant to cut such programs, they are even more reluctant to restore taxes. Cutbacks in state Child Health Insurance Programs, school repairs, job training, community-based social services, and education are on the table in many states.

Both Republican and Democratic state leaders are likely to issue increasingly urgent calls on the federal government to help restore fiscal health.

The National Governors Association has already called for increased funding in social services and education. States say they need a boost now so they can shore up their economies and comply with costly new federal requirements in the Elementary and Secondary Education Act.

You can keep track of what's happening in your state by signing up for action alerts and information from your state child advocacy organizations [2].

What's at Stake in 2003
A closely divided Congress in 2002 meant that every decision became quickly politicized. While the Republicans now have a majority in both the House and Senate, and a Republican president in the White House, there's little likelihood that 2003 will be much different—especially as the 2004 presidential election grows near.

When the new Congress convenes January 7, lawmakers will face unfinished business remaining from the 107th Congress. Most of the spending bills that serve families, children and their communities have not yet been approved for the fiscal year that began October 1, 2002. And major legislation in these areas is up for reauthorization in 2003. So the congressional agenda is crowded with bills affecting programs providing child care, child nutrition, affordable housing, services to help runaway and homeless youth, child health insurance, welfare, and job training for low-income parents.

In addition, the Congress will need to address budget planning for the new fiscal year, FY 2004. The Administration has said it will call for more tax cuts and a fast track for budget decisions so that their proposed constraints on federal domestic spending will be locked in by April.

For a list of specific programs up for reauthorization, or legislative initiatives urged by child advocates, check out Connect for Kids' Reauthorizations for 2003 [3] section.

White House Regulations
In addition to the crowded legislative calendar, child advocates will be paying close attention to regulatory policy shifts in 2003. The administration is expected to issue new rules that will change the way we test the safety of drugs prescribed for young children, eliminate the option for paid family leave, and pull back on environmental protections. These rule changes often take place without much public debate or scrutiny.

You can stay up-to-date with what is happening in Washington through action alerts and information provided by national child advocacy organizations [4].

Or keep subscribing to the Connect for Kids Weekly [5].

It's a Small World
At Connect for Kids we cover domestic issues that affect children and families. But our world is becoming more interconnected. We cannot ignore major trends and events around the globe. HIV/AIDS is the worst epidemic to hit the earth in seven centuries, and its victims worldwide are young adults—the parents and workers that typically care for and protect the world's children. War, famine, terrorism, environmental degradation and a worldwide slumping economy threaten not only our wealth, but also our neighbors' stability. Keep up with global news through our partner, OneWorld [6].

Talk Back

If you've got comments or questions about this story, we'd like to hear them. Send your response to Connect for Kids [7].

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Jan Richter is a former Advocacy Director and writer of the Connect for Kids weekly newsletter.