[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.