Despite the federal government spending more than $700 billion annually to promote economic mobility, the vast majority of these funds flow to middle- and higher-income households and often excludes lower-income families, according to a new report issued today by The Economic Mobility Project.

Lower-income households benefit from many other programs, the study points out, but often in ways that may fail to promote, or even discourage, mobility. In 2006, nearly $212 billion in direct spending (1.6 percent of GDP) and about $534 billion in tax subsidies (4.1 percent of GDP) went to
programs aimed at promoting mobility. Yet, more than 70 percent of the combined $746 billion, or $540 billion, were delivered though employer-provided work subsidies, aids in asset accumulation or savings incentives that greatly favor middle- and higher-income households. Only 28 percent, or $205 billion, was directed toward programs that attempt also to augment mobility for lower-income households.

C. Eugene Steuerle, a principal of the Economic Mobility Project and a senior fellow at the nonpartisan Urban Institute, Adam Carasso of the New America Foundation and the Urban Institute's Gillian Reynolds coauthored "How Much Does the Federal Government Spend to Promote Economic Mobility? And For Whom?"

"Examining economic mobility through the lens of the budget allows us to assess the priority the federal government places on programs aimed at helping citizens realize the American Dream," Steuerle said. "The fact that less than 30 percent of the budget helps lower-income households realize upward mobility is disproportionate to the current challenge," said John E. Morton, Pew's managing director of Economic Policy and the director of the Economic Mobility Project.

"Recent research by the Project showed that more than 40 percent of those born in the bottom of the income distribution remain in the bottom as adults - we need to ensure that policies and programs are in place that help all segments of society, bottom-to-top."