    [Budget of the U.S. Government]
    [VI. Investing in the Common Good: The Major Functions of the Federal Government]
    [21. Education, Training, Employment, and Social Services]
    [From the U.S. Government Publishing Office, www.gpo.gov]

    [[Page 177]]

            21.  EDUCATION, TRAINING, EMPLOYMENT, AND SOCIAL SERVICES

      ----------------------------------------------------------------------

            Table 21-1.  FEDERAL RESOURCES IN SUPPORT OF EDUCATION, TRAINING, EMPLOYMENT, AND SOCIAL SERVICES
                                                (In millions of dollars)
    ----------------------------------------------------------------------------------------------------------------
                                                                                Estimate
                Function 500                1996   -----------------------------------------------------------------
                                           Actual      1997       1998       1999       2000       2001       2002
    ----------------------------------------------------------------------------------------------------------------
    Spending:
      Discretionary Budget Authority...     36,147     42,387     46,425     47,420     48,455     49,459     50,335
      Mandatory Outlays:
        Existing law...................     13,881     10,487     10,785     10,475     10,625     10,796     11,299
        Proposed legislation...........  .........       -340      2,791      4,589      4,986      4,524      1,938
    Credit Activity:
      Direct loan disbursements........      9,120     11,984     14,536     17,636     20,162     21,736     23,076
      Guaranteed loans.................     19,816     20,958     21,256     20,548     20,540     21,538     22,872
    Tax Expenditures:
      Existing law.....................     25,200     27,020     27,865     29,165     30,480     31,880     33,340
      Proposed legislation.............  .........        166      4,919      7,201      8,862      9,038      9,506
    ----------------------------------------------------------------------------------------------------------------

      ----------------------------------------------------------------------
      The Federal Government helps States and localities educate young
    people, helps the low- skilled and jobless train for and find jobs,
    helps youth and adults of all ages overcome financial barriers to
    postsecondary education and training, helps employers and employees
    maintain safe and stable workplaces, and helps provide social services
    for the needy. The Government spends about $60 billion a year on grants
    to States and localities; on grants, loans, and scholarships to
    individuals; on direct Federal program administration; and on subsidies
    leveraging over $30 billion in loans to individuals. It also allocates
    nearly $33 billion a year in tax incentives for individuals.

    Education

      Education has long been a national priority, and for good reason.
    Education has served as the steppingstone for Americans who wanted
    better lives for themselves and their families. At the same time,
    Americans view education as mainly the province of State and local
    governments, and of families and individuals. Education spending
    reflects these views--of the more than $500 billion a year that the
    Nation spends on elementary, secondary, and postsecondary education, 91
    percent comes from State, local, and private sources. The Federal
    Government contributes just nine percent.
      But, though a small share of the overall investment, Federal spending
    targets important national needs, such as equal opportunity and high
    academic standards. For postsecondary education, three-fourths of all
    student financial aid comes in federally-backed student loans, Pell
    Grants, and other Federal help--and Federal aid helps half of all
    students pay for college. To expand access to college, the
    Administration is proposing a new HOPE scholarship tax credit and a tax
    deduction, to make two years of postsecondary education universally
    available and to open the doors to lifelong learning.
      At elementary and secondary schools, most disadvantaged students get
    extra help to succeed through the Federal Title I program, launched as
    part of the War on Poverty and providing supplementary services, such

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    as special tutoring in math, to low-income children. The return on this
    Federal investment has been dramatic. Citing Title I, as well as Head
    Start and child nutrition programs, a 1994 RAND study found that ``the
    most plausible'' way to explain big education gains of low-income and
    minority children in the past 30 years is ``some combination of
    increased public investment in education and social programs and changed
    social policies aimed at equalizing educational opportunities.''
    Minority students have made substantial gains in science, math, and
    reading since the 1970s, narrowing the gap between minority and
    Caucasian student achievement.
      But progress has slowed in recent years, prompting the Federal
    Government to redirect its strategies. The Goals 2000 program is
    designed to elevate academic expectations for all students, by
    encouraging every State to set challenging standards in core subject
    areas. Recent changes to the Elementary and Secondary Education Act give
    schools more flexibility in return for greater accountability, creating
    an environment in which the schools use resources more efficiently.
    Similarly, Federal support for ``charter schools'' enables parents,
    teachers, and communities to create new, innovative public schools,
    which the States free from most rules and regulations and, at the same
    time, hold accountable for raising student achievement. Federal progress
    in helping students with disabilities also has proved significant. High
    school graduation rates have risen significantly, and 57 percent of
    youth with disabilities are competitively employed within five years of
    graduating from high school.
      But in the last 30 years, perhaps the Federal Government's most
    important role in education has been to help Americans afford to attend
    college. Federal grants, loans, and work study, which went to 7.2
    million students in 1996, particularly help low- and middle-income
    families. From 1964 to 1993, college enrollment nearly tripled, the
    share of high school graduates that attended college rose by a third,
    and college enrollment rates for minority high school graduates rose by
    nearly two-thirds.
      While enrollment rates rose for all groups, gaps by race and family
    income have widened since 1980. One reason seems to be rising tuition,
    caused mainly by cuts in State support; 76 percent of all students
    attend State public higher education institutions. Low-income families
    are particularly sensitive to tuition increases, and minority families
    have been reluctant to take out loans, which have been the fastest-
    growing component of Federal aid. The availability of income-contingent
    loan repayments since 1993, and other flexible repayment options, are
    designed to help address the appropriate fears of low-income families
    about assuming loans. In addition, the proposed 21 percent increase in
    the maximum Pell grant scholarship between 1996 and 1998 is designed to
    help these families.
      The economic returns to a college education are large. In 1993, full-
    time male workers over 25 years old with at least a bachelor's degree
    earned 89 percent more than comparable workers with only a high school
    degree. But not only do the college graduates themselves benefit. The
    higher socioeconomic status of parents also leads to greater educational
    achievement by their children.

    Skill Training

      The elementary, secondary, and postsecondary avenues cited above lay
    the groundwork for Americans to get the skills they need to acquire good
    jobs in an increasingly competitive global economy. Most workers also
    acquire additional skills on the job or through the billions of dollars
    that employers spend to improve worker skills and productivity. These
    efforts help the vast majority of working-age Americans.
      Nevertheless, others need additional kinds of assistance.
    Consequently, the Federal Government spends nearly $7 billion a year
    through Labor Department programs to help dislocated workers train for,
    and find, new jobs, and to help economically-disadvantaged Americans
    learn skills with which they can move into the labor force. This aid
    includes a labor exchange--the State Employment Service--for anyone who
    wants to learn about job openings.
      The Federal Government helps dislocated workers move from one job to
    the next. Nearly 70 percent of participants in the

    [[Page 179]]

    Job Training Partnership Act's (JTPA) Dislocated Worker program have jobs when they leave, with average earnings of 92 percent of their previous wages. In
    addition, JTPA's Title II help disadvantaged adults, including welfare
    recipients, to get jobs. Over half of the welfare recipients who
    received help under Title II started jobs, with wages that averaged
    nearly $7 an hour.
      Other programs help youth move from high school to more schooling or
    work by helping States and localities build School-to-Work systems,
    support vocational training in secondary and postsecondary institutions,
    and provide a ``second chance'' to low-income youth who have not fared
    well in school or the labor market. States began to implement School-to-
    Work systems in 1994.
      For youth who need it, the Job Corps provides intensive skill
    training, academic and social education, and support services in a
    structured, residential setting. Other programs provide summer work
    experience or more job training.

    Workplace Safety and Law Enforcement

      The Federal Government spends about $500 million a year to promote
    safe and healthy workplaces for 100 million workers in six million
    workplaces, mainly through the Labor Department's Occupational Safety
    and Health Administration (OSHA) and Mine Safety and Health
    Administration. Regulations that help business create and maintain safe
    and healthy workplaces have significantly reduced illness, injury, and
    death from exposure to hazardous substances and dangerous equipment. The
    regulations clearly produce results that far exceed what Federal funds
    could achieve. OSHA also helps employers institute effective safety and
    health programs, while maintaining its strong enforcement capability.
      The Government also regulates compliance with various laws that grant
    workers other protections--a minimum wage for virtually all workers,
    prevailing wages for workers on government contracts, overtime pay,
    restrictions on child labor, and time off for family illness or
    childbirth. In these cases, as with worker health and safety, the
    Federal Government works with the private sector to achieve important
    social goals that the Government could never achieve through Federal
    financing alone.

    National Service

      The Corporation for National and Community Service, which the
    Government established in 1993 at the President's urging, encourages
    Americans of all ages to engage in community-based service. The budget
    proposes about $800 million to support these programs in 1998.
      AmeriCorps, the Corporation's signature initiative, each year enables
    thousands of young Americans of all backgrounds to serve their local
    communities full- or part-time. In return, they receive a minimum living
    allowance and an education award to help pay for post-secondary
    education. About 70,000 individuals have participated in AmeriCorps in
    its first three years, with another 35,000 expected to serve under the
    budget proposals. About a third of new participants in 1998 would
    participate in America Reads--an effort through which volunteers will
    help children read by themselves, and well, by the third grade.
      Along with AmeriCorps, the Corporation supports the National Senior
    Volunteer Corps through which older Americans volunteer their time and
    energy to help their communities, children with disabilities, and the
    infirm elderly. Nearly 600,000 older Americans would participate in
    1998.

    Public Broadcasting

      The budget proposes $325 million for the Corporation for Public
    Broadcasting (CPB) to help the 352 public television stations and the
    692 radio stations provide quality educational programming through such
    avenues as National Public Radio and the Public Broadcasting Service.
    Stations use CPB funds to produce original children's and educational
    programs, and to acquire historical and cultural programs. CPB also
    helps finance several system-wide activities, including national
    satellite interconnection services and payments of music royalty fees.

    [[Page 180]]

    Social Services

      Along with helping youth and adults gain basic and higher education
    and advanced workplace skills, the Federal Government provides about $xx
    billion a year in grants to States and local public and private
    institutions to help defray the cost of social services. Those who
    receive these services include low-income individuals, the elderly,
    people with disabilities, children, and youth.

    Tax Incentives

      The Federal Government helps individuals, families, and employers (on
    behalf of their employees) plan for and buy education and training
    through numerous tax preferences, totaling $32.8 billion in 1998. The
    budget proposes new HOPE scholarship tax credits of up to $1,500 a year
    for two years of postsecondary education, and again proposes tax
    deductions of up to $10,000 for tuition and fees for college, graduate
    school, or job training.
      The tax code already provides other avenues for saving, and paying,
    for education and training. State and local governments can issue tax-
    exempt debt to finance student loans or the construction of facilities
    used by non-profit educational institutions. Interest from certain U.S.
    Savings Bonds also is tax-free if the bonds are used solely to finance
    educational costs. Also under the tax code, many employers can, and do,
    provide employee benefits that are not counted as income.
      The law offers employers a Work Opportunity Tax Credit, enabling them
    to claim a tax credit for a portion of wages they pay to certain hard-
    to-employ individuals who work for the employer for a minimum period.
    The budget proposes: (1) to enhance the credit with regard to long-term
    welfare recipients, and (2) to extend the existing credit to able-bodied
    childless adults aged 18 to 50 who, under the Administration's Food
    Stamp proposal, would face a more rigorous work requirement in order to
    continue receiving Food Stamps.