[Budget of the United States Government]
[V. Preparing For the 21st Century]
[8. Strengthening the American Community]
[From the U.S. Government Publishing Office, www.gpo.gov]
8. STRENGTHENING THE AMERICAN COMMUNITY
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We need to say that in the poorest neighborhoods of this country, people
still have a chance to start a business, free enterprise still has a chance
to take hold, people still have a chance to build a framework of community.
And if we can't do that when the economy is strong, when can we do that?
We have to do that.
President Clinton
August 1997
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Most Americans are enjoying the fruits of our strong economy. Poverty,
welfare, and unemployment are down. Incomes and homeownership are up.
But progress is not uniform. While many urban and rural areas are
doing better, too many others have grown disconnected from opportunity
and prosperity, and their isolation--the poor from the well-off, the
jobless from those who work, those from one race or ethnicity from those
of another--threatens to fray the fabric of our culture.
In the early 20th Century, cities fueled America's economic growth.
Still today, their future, and that of rural areas, remains central to
our future as a Nation and, thus, to the future of all Americans, no
matter where they live or work. We must connect residents of distressed
neighborhoods to the jobs and opportunities of the regional marketplace,
and replace economic distress with opportunity.
The Administration believes the Federal Government can, and should,
work with States, localities, businesses, non-profits, schools,
families, and individuals to help create opportunities and offer
incentives for addressing local problems. Across the Nation, the
Government is working in partnership with other governments and
institutions, whether to encourage volunteerism through the National
Service program or provide communities with economic and tax incentives
to encourage private investment through the Empowerment Zones and
Enterprise Communities initiative.
In the Nation's capital, the Administration is making a special effort
to make Washington, D.C. a city of which all Americans can be proud.
Having worked with Congress to restructure the Federal Government's
relationship to the District last year, the Administration is focusing
on how Federal departments and agencies can provide the District with
technical help in such areas as education and law enforcement.
National Service
National Service builds strong communities, educates children,
develops citizen responsibility, and expands educational opportunity.
The Corporation for National and Community Service, established in 1993,
encourages Americans of all ages and backgrounds to help solve community
problems and provides opportunities to engage in community-based
service. The budget proposes $781 million for the Corporation, a 14-
percent increase over 1998, with the increase targeted to the
President's America Reads initiative--an effort through which volunteer
tutors will help children read well and independently by the end of the
third grade.
AmeriCorps enables young Americans of all backgrounds to serve in
local communities through programs sponsored by local and national
nonprofits. Participants serve full-or part-time, generally for at least
a year. In return, they earn a minimum living allowance set at about the
poverty level of a single individual and, when they complete their
service, they earn an education award to help pay for postsecondary
education or
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repay student loans. Over 100,000 individuals will participate through
AmeriCorps's first four years, and the budget supports an AmeriCorps
program of 56,000 members in 1999. The AmeriCorps program includes
Volunteers in Service to America (VISTA) and the National Civilian
Community Corps (NCCC).
Among other national service programs:
Service-learning programs supported by Learn and Serve America
grants engage students from kindergarten through college to
serve their communities and learn citizenship. The budget
proposes to fund opportunities for more than a million
students.
The National Senior Service Corps provides opportunities for
citizens age 55 and older to use their time and talents to
meet community needs. The budget funds the Retired and Senior
Volunteer Program, the Foster Grandparent Program, and the
Senior Companion Program, enabling more than half a million
older Americans to serve.
Most important of all, national service participants are getting
things done.
In one Tennessee project, AmeriCorps members helped improve
the health of 500 children by advising parents on proper
nutrition and early childhood health, assessing family health
risks, and increasing access to health education.
In Washington State, AmeriCorps members helped cut violent
crime in one housing project by 30 percent through a program
that addresses juvenile crime, gang activity, school success,
and youth homelessness. The program offers a late-night
program for 400 high-risk youth, a street school that operates
six days a week, out-of-school time activities for K-12 youth,
and a program to enhance student success in schools.
In New York City, a team of 30 older Americans that works
directly with children through tutoring and mentoring has
developed literacy programs, encouraged parent and grandparent
involvement, led community service events for the children,
organized afterschool and summer programs, and recruited
additional volunteers.
Empowerment Zones (EZs) and Enterprise Communities (ECs)
As part of his 1993 economic program, the President proposed, and
Congress enacted, the Empowerment Zones and Enterprise Communities
program. Communities develop a strategic plan to help spur economic and
community development and expand opportunities for their residents, and
in return they receive Federal tax benefits, social service grants,
technical assistance, and more flexibility in how they use Federal
funds.
EZs and ECs are parts of urban or rural areas with high unemployment
and high poverty rates. For EZs, the Federal Government provides tax
benefits for businesses, and offers grants to community groups for job
training, day care, and other purposes. For ECs, the Government provides
grants to community groups for the same array of purposes. Both EZs and
ECs can apply for waivers from Federal regulations, enabling them to
better address their local needs. In addition, special set-asides from
Agriculture Department rural development programs are available to rural
EZ/ECs.
The 1994 competition for the first round of EZ and EC designations
generated over 500 applications and created new local partnerships for
community revitalization--even in communities not chosen. The 105
selected communities made well over $8 billion in private-public
commitments (in addition to the promised Federal resources), bringing
greater economic opportunity to both distressed urban and rural areas.
The Kentucky Highlands rural EZ, for instance, is using $11 million of
EZ funds to expand the amount of development venture capital available
in its borders. From the $5.6 million obligated to date, the EZ has
leveraged $38 million in additional capital for 11 new manufacturing
enterprises that have created 575 jobs and committed to create another
1,600. In the six urban EZs, the private sector has made or committed
over $2 billion in new investment, bringing greater opportunity to those
cities. The Detroit
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Celebrating the Millennium and America's Treasures
The new White House Millennium Council will lead the country in a celebration of the new millennium--
initiating and recognizing national and local projects and efforts that contribute to the celebration in
educational, creative, and productive ways. By stressing the creative achievements and accomplishments of
Americans in exploration, innovation, and discovery, and by educating Americans, especially children, about our
history, democracy, and civil society, the Council can help ensure that these values and traditions endure into
the next century. The Council will work with Federal agencies, Congress, States, Tribes, elected officials,
communities, citizens, and private and non-profit organizations to recognize the Nation's historical
accomplishments, reflect on the forces shaping our society, and encourage thoughtful planning for the future.
The budget proposes $50 million for the National Park Service Historic Preservation Fund, working with the
Council, to help public and private entities to commemorate the Millennium. These funds will support one of the
most important tasks facing America at the turn of the century--to preserve America's treasures for future
generations. These treasures include the historic buildings, sites, documents, objects, manuscripts,
photographs, works of art, maps, journals, still and moving images, and sound recordings that document and
illuminate our Nation's history and our cultural heritage.
The budget also funds important cultural institutions and programs. It provides the resources to complete the
Mall Museum of the National Museum of the American Indian, a public-private partnership between the Federal
Government and the Native American community that will open to the public in 2002. It also provides increased
funds to help the Smithsonian address the backlog of needed repairs at several of its major museums, such as the
National Museum of Natural History. In addition, the budget provides funds for the Kennedy Center to continue
major interior renovations that will permit greater access by the disabled persons and better use of its space.
Finally, the budget provides increases for cultural institutions, such as the Smithsonian and the National
Endowment of the Arts, to digitize portions of collections and, in turn, enhance public access to them.
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EZ alone has supported thousands of new jobs, helping to drop the city's
jobless rate from 11 percent to 8.7 percent since 1994. In a recent
report card on EZs in general, Standard and Poor's, the credit rating
agency, concluded that, ``when executed successfully, [EZs] can
contribute to the local economy and lead to an improvement in the
issuer's credit rating.''
But many communities that were not designated as EZs or ECs lack the
seed capital to begin their revitalization efforts. Thus, in last year's
budget, the President proposed a second round of EZs/ECs to stimulate
further private investment and economic opportunity in distressed urban
and rural communities and to connect residents to available local jobs.
Congress authorized 22 additional EZs, and made qualified businesses in
these EZs eligible for tax incentives, including up-front deductions for
qualifying capital investments, new tax-exempt facility bonds, a new
deduction for environmental remediation costs, and a new tax credit for
holders of qualified Zone education ``academy'' bonds. This budget
proposes flexible block grant funds, $100 million per urban EZ and $40
million per rural EZ over 10 years, to complement the tax incentives and
encourage comprehensive planning to revitalize these distressed areas.
The program will continue to challenge communities to develop their
own comprehensive, strategic plans for revitalization, with input from
residents and a wide array of community partners. The Administration
will invest in communities that develop the most innovative plans and
secure significant local commitments. It will offer a competitive
application process to stimulate the public-private partnerships needed
for large-scale job creation, business opportunities, and job
connections for families in distressed communities. Also, communities
will receive priority consideration for funds from Federal economic
development programs and for waivers of Federal requirements from the
President's Community
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Empowerment Board, which the Vice President chairs. The upcoming
competition will build on the President's Brownfields initiative, which
promotes the clean-up and redevelopment of contaminated industrial and
commercial sites. (For more information on the Brownfields program, see
Chapter 4, ``Protecting the Environment.'')
Community Development Lending
The Community Development Financial Institutions (CDFI) Fund, which
the President proposed and Congress established in 1994, expands the
availability of credit, investment capital, financial services, and
other development services in distressed urban and rural communities. By
creating and expanding a diverse set of CDFIs, the Fund helps develop
new private markets, create healthy local economies, promote
entrepreneurship, restore neighborhoods, generate tax revenues, and
empower residents. The Fund represents a new approach to community
development that uses limited Federal resources to leverage significant
private sector and local resources, promotes self-sustaining CDFIs, and
catalyzes new community lending and investment activity by conventional
financial institutions.
CDFIs provide a wide range of financial products and services, such as
mortgage financing to first-time home buyers, commercial loans to start
or expand small businesses, loans to rehabilitate rental housing, and
basic financial services. CDFIs include a broad range of institutions--
e.g., community development banks, low-income credit unions, community
development loan and venture capital funds, and microenterprise loan
funds.
The budget proposes $125 million for the CDFI Fund, a $45 million
increase over the 1998 level; the new funds would expand a training and
technical assistance initiative and, in part, help accelerate the
development of a secondary market for community development loans. To
date, the CDFI Fund has received requests for almost $500 million in
assistance--over six times the amount available--from over 400
applicants. In 1997, the Fund chose 48 CDFIs to receive $38.3 million in
financial and technical assistance. In addition, the Fund awarded $17
million to 55 traditional banks and thrifts for increasing their
activities in economically distressed communities and investing in
CDFIs.
The Fund can dramatically leverage private funds in distressed
communities. For example, its $3 million investment in Self-Help of
Durham, N.C., helped leverage $24 million in mortgage financing and
commercial lending. In addition, the Fund can strengthen CDFIs
themselves and expand their ability to lend and invest. The Santa Cruz
Community Credit Union is using $1 million from the Fund to open a new
branch to serve mostly low-income, Hispanic residents of Watsonville,
California. With a $1 million loan from the Fund, the Tlingit-Haida
Regional Housing Authority will begin home mortgage lending in southeast
Alaska's three urban areas--providing one of the first sources of
affordable mortgage loans to Alaska Natives in these markets.
The budget also provides $400 million for the Department of Housing
and Urban Development's (HUD) Economic Development Initiative, including
the resources for a new Community Empowerment Fund to support economic
development efforts and help create a secondary market for HUD's
Community Development Loan Guarantee (Section 108) program. Through
grants and loans, this new program would help State and local
governments standardize the underwriting and documentation of loans to
businesses in distressed areas, and expand credit for economic and
community development lending.
Urban and Rural Development
The Administration has worked to give communities flexible tools to
develop affordable housing, revitalize their economies, and promote
equal housing opportunity for all.
Hoping to reverse a decline in homeownership, for instance, the
Administration in 1994 launched an unprecedented partnership with 58 key
public and private organizations to form a National Homeownership
Strategy. The partners are reducing barriers to homeownership by cutting
mortgage closing costs and down payment requirements; simplifying the
process of financing home purchases and repairs; and opening markets for
women, minorities, central-city home buyers, and others traditionally
locked out of conventional
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Enforcing Civil Rights
Federal civil rights laws reflect the Nation's respect for core values that bind together diverse segments of
the American community. These laws protect Americans' rights to equal access to educational opportunities and
equal opportunity in the workplace, and their rights to live where they want and practice the religious faith
they choose. As the population grows more and more diverse, the Nation must continue to ensure that all of its
citizens have the same chance to prosper.
Federal civil rights agencies enforce our laws against discrimination. Effective enforcement promotes the
economic well-being of Americans who seek good jobs, a better education for their children, and the chance to
become self-sufficient. The Nation must enforce its civil rights laws fairly, consistently, and aggressively,
and that requires adequate funding for these agencies.
The budget proposes $602 million for civil rights enforcement agencies, an increase of $86 million, or 17
percent, over the 1998 level, including the necessary funds to improve compliance; expand the use of alternative
dispute resolution methods; improve information systems; and develop better data collection capabilities for
research and enforcement.
The budget provides a 15-percent increase, to $279 million, for the Equal Employment Opportunity Commission to
more quickly resolve private sector complaints; a 70-percent increase, to $52 million, for the Department of
Housing and Urban Development to crack down on housing discrimination; and a 10-percent increase, to $72
million, for the Justice Department's Civil Rights Division to better coordinate Federal civil rights
enforcement and to expand investigations and prosecutions of police brutality and violations of the Americans
with Disabilities Act. (For more information on these initiatives, see Chapter 12 of Analytical Perspectives,
``Civil Rights Enforcement Funding.'')
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lending markets. Along with a strong economy and low interest rates,
this effort has helped boost homeownership to 66 percent--an all-time
high; 5.8 million Americans have become homeowners under this
Administration, including record numbers of minorities.
But the job is not done. Homeownership in central cities and among
women, minorities, and lower-income Americans hovers at or below 50
percent. Consequently, to boost homeownership among these groups, the
budget proposes $25 million for a Neighborhood Reinvestment Corporation
pilot program to help renters with solid payment track records own their
own homes. The budget also proposes a Home Loan Guarantee program to
allow States to use HOME funds to leverage private loans for large-
scale, affordable housing developments in distressed areas. To expand
housing opportunities and combat discrimination, the budget proposes
that HUD fund fair housing enforcement using paired testers--a proven
method to detect discrimination--in 20 communities in order to develop
local indices of discrimination, identify and pursue violations of fair
housing laws, and promote new community fair housing enforcement
initiatives.
To spur the private sector to develop more affordable rental housing
for low-income Americans, the budget proposes a major expansion of the
Low Income Housing Tax Credit, which will help develop another 150,000
to 180,000 affordable housing units over the next five years. Currently,
the credit helps develop 75,000 to 90,000 affordable units a year. The
proposal, which will cost $1.6 billion over the next five years, will
restore the value of the tax credit, which has eroded over the last
decade due to an increase in building costs. The credit helps to reduce
the cost of rent by an average of $450 a month for the average housing
credit renter who, in turn, earns $13,300 a year.
For public housing, the Administration has advanced the most profound
changes in over a generation, replacing the most dilapidated
developments with smaller scale, affordable housing and portable
vouchers; restoring management excellence to troubled housing agencies;
providing incentives for tenant self-sufficiency; and strengthening
occupancy and
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eviction rules. The budget builds on the progress by supporting efforts
to demolish 54,000 of the worst public housing units in the next three
years and replace them with portable subsidies or newly constructed
mixed income housing. The budget also proposes $283 million for 50,000
portable housing vouchers for families seeking to move from welfare to
work. Local housing agencies that work in partnership with State and
local welfare agencies will get the flexibility to design programs to
serve welfare families for whom housing assistance is critical for
getting and retaining jobs.
Because their needs are so different, no single approach will help
both urban and rural communities. The Administration has proposed to
give States, localities, and Tribes more flexibility in how they use
USDA's Rural Development grants and loans for businesses, water and
wastewater facilities, and community facilities such as day care centers
and health clinics. The 1996 Farm Bill authorized this approach through
a new Rural Community Assistance Program (RCAP), combining 12 separate
USDA programs into a Performance Partnership that can tailor assistance
to the unique economic development needs of each rural community. The
budget proposes $2.9 billion in loans and grants for RCAP, four percent
more than in 1998, and the full flexibility that the 1996 Farm Bill
envisioned.
The budget also boosts funding for the Commerce Department's Economic
Development Administration (EDA). The EDA would create an Office of
Community and Economic Adjustment Assistance to work directly with
communities adversely affected by major plant closings and international
trade agreements and increase the number of grants available to
communities.
Government-to-Government Commitment to Native Americans
The Administration honors its government-to-government relationship
with Tribes by protecting critical, reservation-level programs, turning
back congressional threats to Tribal sovereignty, and bringing together
government leaders and resources to address important Tribal concerns.
The budget protects these priorities and proposes more assistance to
combat crime, foster educational opportunities, and promote
environmental conservation. The budget proposes $7.8 billion, four
percent more than in 1998, for Government-wide programs addressing basic
Tribal needs and encouraging self-determination (see Table 8-1).
A joint law enforcement initiative of the Interior (DOI) and Justice
Departments, for which the budget proposes $182 million in 1999, will
address sharply increasing crime rates in Indian country with more
resources for drug and youth crime prevention programs, police
investigators and officers, Tribal courts, and detention facilities. The
Administration also proposes a new school construction initiative and
more resources for school operations; education opportunity zones; early
intervention partnerships; child care; technology to link schools,
classrooms, and libraries; and teacher preparation and recruitment.
Finally, the Interior and Commerce Departments recently issued a
Secretarial Order to assist Tribes in promoting healthy ecosystems and
developing conservation measures.
DOI's Bureau of Indian Affairs (BIA) and the Health and Human Services
Department's Indian Health Service (IHS) comprise nearly
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Investing in the Delta Region
The budget proposes $26 million to apply the successful economic development model of the Appalachian Regional
Commission (ARC) to help 219 distressed counties in the seven-State Lower Mississippi Delta Region, which has
suffered from persistently high poverty and low economic growth for much of the past 40 years.
The ARC's Federal-State partnership is a proven economic development tool that embodies balanced, equitable
fiscal decision-making and that could dramatically improve the economic viability of the Delta Region.
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Table 8-1. GOVERNMENT-WIDE NATIVE AMERICAN PROGRAM FUNDING
(Budget authority, dollar amounts in millions)
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Dollar Percent
1997 1998 1999 Change: Change:
Actual Estimate Proposed 1998 to 1998 to
1999 1999
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BIA........................................................... 1,639 1,702 1,844 +142 +8%
IHS \1\....................................................... 2,351 2,431 2,476 +45 +2%
All other..................................................... 2,925 3,357 3,507 +150 +5%
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Total....................................................... 6,915 7,490 7,827 +337 +4%
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\1\ IHS program level includes both budget authority and Medicaid, Medicare, and private insurance collections.
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two-thirds of Federal funding for Native American programs.
For the BIA, the budget proposes $1.8 billion, eight percent over the
1998 level, including a five-percent increase for Tribal priority
allocations, to meet basic local needs and improve the quality of life
of a growing population; build strong Tribal governments; promote Tribal
self-sufficiency; and fulfill the Federal trust responsibility to Native
Americans. Over 90 percent of BIA operations funding goes for basic,
high-priority reservation-level programs such as education, social
services, law enforcement, housing improvement, and natural resource
management.
For IHS, the budget proposes $2.5 billion, a two-percent increase
over the 1998 level, enabling IHS to continue to uphold the Federal
Government's responsibility to promote the health of American Indian and
Alaska Native people, communities, and cultures by providing quality
curative and preventive medical care. In some cases, IHS is the only
source of medical care available on remote reservation lands.
IHS facilities continue to provide quality medical care. The budget
proposes funds to help construct the Keams Canyon Service Unit on the
Hopi reservation and a replacement for the Fort Defiance Hospital, an
antiquated facility, on the Navajo reservation. In addition, the $30
million a year in diabetes-related funding that IHS receives under the
new Children's Health Insurance Program will help alleviate
complications from diabetes, such as blindness, foot amputation, and End
Stage Renal Disease among American and Alaskan Natives.
BIA and IHS will continue to promote Tribal self-determination through
local decision-making. Tribal contracting and self-governance compact
agreements now represent half of BIA's operations budget, and over a
third of IHS' budget. The self-governance agreements, which give Tribes
greater flexibility to administer Federal programs on reservations, will
likely grow in number to 74 in BIA in 1999, a 16-percent increase from
1998. BIA and Tribes are negotiating to permanently implement the self-
governance program, ensuring its strong future and continued growth.
Finally, after Tribal consultations on its December 1996 report, DOI
submitted its ``Recommendations of the Secretary of the Interior for
Settlement of Disputed Tribal Accounts'' to Congress in November 1997.
This proposal reflects the Administration's commitment to resolve
disputed Indian trust fund account balances through informal dispute
resolution. The budget also supports the recently introduced Indian Land
Consolidation Act Amendments, to address the problem of highly
fractionated land ownership by individual Indians on reservations. Also,
within the Administration's three-pronged approach to address trust
fund-related issues, the budget supports DOI's Office of Special
Trustee's trust fund management improvement
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project to resolve problems in individual Indian accounts, convert to a
commercial-grade accounting system, and strengthen the management of the
underlying trust assets.
The District of Columbia
As President Clinton told congregants at Metropolitan Baptist Church
in Washington, D.C. recently, the Administration is committed to being
``a better neighbor'' to the District of Columbia.
The President's comprehensive plan for the District, which Congress
largely funded last year, was an important step along the way. By
relieving the District of major financial burdens that it should never
have had, the plan lays the groundwork for the District to restore its
fiscal health.
Under the plan, the Federal Government assumed certain functions in
which it has a clear interest.
Criminal Justice: The Federal Government now funds D.C.'s
Court System and other key elements of the District criminal
justice system, including the incarceration of sentenced
felons and supervision of all adult offenders.
Medicaid: The Federal Government has assumed the role
typically played by both Federal and State governments under
this health insurance program, paying 70 percent of Medicaid
spending in the District (compared to the previous 50
percent).
Pensions: The Federal Government is resuming responsibility
for an estimated $5.9 billion unfunded pension liability that
it transferred to the District in 1979.
In exchange, the Federal Government eliminated its annual payment to
D.C., which totaled $660 million in 1997, though it provided a one-time,
$190 million payment for District operations in 1998.
Under the President's plan, the District government estimates that it
will save about $200 million in 1998 alone. To balance its budget in
1998 and maintain balance thereafter, the District plans to launch major
management reforms, cut spending, and finance part of its $528 million
accumulated deficit.
The Administration--through its departments and agencies--will
continue to provide technical help and other assistance to the District
in specific areas, such as education and law enforcement. The budget,
for instance, proposes $20 million to help D.C. public schools implement
reforms that hold the promise of improving student achievement,
including expanding summer school, training teachers and principals, and
placing reading specialists in every school.
The upcoming year is a pivotal one for the Federal and District
governments to implement the landmark changes in their relationship, and
for D.C. to implement vital management reforms. The Administration,
which strongly supports the District's right to self-governance, is
committed to do its part, and it proposes to pay for certain special
expenses that arise from District implementation of the President's plan
in the areas of District Corrections, Courts, and Offender Services
Agency operations.
Moreover, the budget proposes to build on last year's plan by
providing $100 million for economic development initiatives, including
$50 million to fund an economic development entity created by the
District; $25 million to make the proposed Washington Convention Center
more accessible to the public through Washington's Metro subway system;
and $25 million to fund management reform initiatives to improve the
city's economic development infrastructure.
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Expanding Public Television
The budget provides $450 million over five years to help the public broadcasting system make the transition to
digital technology, which will greatly expand educational, community service, and cultural programming. New
digital technology will set the stage for four to six more channels and new innovative television applications,
including high definition and interactive television.
These funds--for the Corporation for Public Broadcasting and the Commerce Department--will ensure that public
broadcasting can take advantage of the transition while continuing to meet four core principles: education, non-
commercialism, universal access, and localism in the digital era.
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