[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]


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        21.  EDUCATION, TRAINING, EMPLOYMENT, AND SOCIAL SERVICES

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        Table 21-1.  FEDERAL RESOURCES IN SUPPORT OF EDUCATION, TRAINING, EMPLOYMENT, AND SOCIAL SERVICES       
                                            (In millions of dollars)                                            
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                                                                            Estimate                            
            Function 500                1996   -----------------------------------------------------------------
                                       Actual      1997       1998       1999       2000       2001       2002  
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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
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  ----------------------------------------------------------------------
  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 

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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.

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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.