    [Budget of the United States Government]
    [IV. Preparing For the 21st Century]
    [2. Supporting Working Families]
    [From the U.S. Government Publishing Office, www.gpo.gov]

    [[Page 57]]

                         2.  SUPPORTING WORKING FAMILIES

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

      In this era of unprecedented prosperity, we still have some work . . . to do to make sure that we embrace all
    Americans in this prosperity and to give every American the chance to succeed at work and at home . . . America
    is a better place because our families are stronger, our children are growing up in more stable homes, and every
    adult American who is willing to work has a chance to do so.
                                          President Clinton
                                          August 1999

      ----------------------------------------------------------------------
      While the surge of economic growth in the past seven years has
    presented a wealth of opportunities, this new economy also means that
    parents work harder than ever. Many face a constant struggle to fulfill
    their obligations as workers and the even greater responsibility of
    doing a good job in raising their children.
      From the start, President Clinton has advanced policies to strengthen
    the family, in large part by helping Americans balance the twin demands
    of work and parenthood. The first bill he signed into law, two weeks
    after taking office, was the Family and Medical Leave Act, granting
    workers the right to 12 weeks unpaid leave to care for a newborn child,
    or a sick child or parent, or attend to their own serious health needs.
    The President has expanded after-school programs and funding for child
    care and early childhood learning including, in the past seven years,
    increasing funding for Head Start by 90 percent, moving toward the goal
    of serving one million children by 2002.
      In the course of this Administration, the President has sought to
    encourage and support work and responsibility, pillars of the family
    structure. A central goal of his 1993 economic package was to make work
    pay. The President's economic plan expanded the Earned Income Tax Credit
    (EITC), helping 15 million low-income working families. In 1998, the
    EITC lifted 4.3 million people out of poverty, more than twice as many
    as in 1993. In 1996, he proposed, and signed into law an increase in the
    minimum wage, followed in 1997 by the child tax credit of $500 per child
    and the State Children's Health Insurance Program (SCHIP), which
    provides health insurance to the children of low-income working parents
    who otherwise would not be able to afford it.
      The President believes that individuals have a responsibility to work
    to support their families, and government has a responsibility to reward
    work. In 1996, he signed legislation to reform the Nation's welfare
    system into one that requires and rewards work and responsibility. There
    is now increased flexibility for States to administer work-focused
    welfare programs. In order to provide support for those entering the
    work force, this legislation expanded funds for child care. Significant
    steps have been taken to ensure that eligible working families retain
    access to food stamps and Medicaid, and to increase participation in the
    Special Supplemental Nutrition Program for Women, Infants and Children
    (WIC). Welfare reform has also placed additional responsibility on non-
    custodial parents for financial responsibility in child rearing by
    strengthening child support provisions. In order to support at-risk
    families and individuals, this Administration has advanced policies to
    provide support for those at-risk, which can prevent a slide into
    dependency.
      In this budget, the President builds upon these policies that are
    central to his agenda of work, responsibility, and family. The budget
    expands the EITC to provide marriage penalty relief to two earner
    couples, reduce marginal tax rates, and provide a higher credit to
    larger families, who face a child poverty rate twice as high as families
    with one

    [[Page 58]]

    or two children. This budget promotes early learning and improves child
    care quality. It makes child care more affordable by expanding subsidies
    and the Child and Dependent Care Tax Credit, including making it
    refundable in order to help defray child care costs for low- and
    moderate-income families. The budget expands 21st Century Learning
    Community Centers, increases support for education of disabled children,
    and expands Head Start. It also expands resources for WIC and proposes
    to restore food stamps, Medicaid, and Supplemental Security Income for
    certain legal immigrants. It continues efforts to move people from
    welfare to work. It includes a major initiative to help former welfare
    recipients and other low-income families succeed on the job and move up
    the career ladder. This initiative provides competitive grants to States
    and local communities that build partnerships to maximize the use of
    existing resources to provide work supports and skill training. The
    budget promotes responsible fatherhood, proposing tough new measures to
    ensure that all parents who can afford to pay child support do so,
    making sure more support goes directly to families, and making sure that
    unemployed fathers who owe child support go to work and provide that
    support. This new initiative is targeted at increasing the employment,
    earnings, and child support payments of low-income fathers.

    Increasing the Earned Income Tax Credit

      The Federal Government is committed to helping those who work meet the
    cost of raising their children. The EITC helps to meet this goal by
    supplementing the earnings of working families. In his 1993 economic
    program, the President proposed, and Congress enacted, legislation to
    substantially expand the credit, helping 15 million low-income working
    families. The expansion contributed to reducing the poverty rate to 12.7
    percent in 1998, the lowest rate since 1979. Having implemented a series
    of EITC error-reduction initiatives, including the provisions in the
    Taxpayer Relief Act of 1997, the President is proposing another increase
    in the EITC.
      The budget includes a 10-year, $23.6 billion proposal to expand the
    EITC to provide tax relief for 6.8 million working families by
    increasing the credit received by larger families and married couples.
    The poverty rate for children in families with three or more children is
    more than twice that of children in smaller families. This proposal
    would increase the maximum credit for families with three or more
    children by approximately $500 in order to help roughly 2.1 million low-
    and moderate-income families. Approximately 5.4 million families with
    two or more children would also benefit from a slower phaseout rate, so
    parents could keep more of what they earn even as their earnings
    increase. The proposal would also provide an average credit increase of
    $250 for married two-earner couples by allowing them higher combined
    earnings; a two-earner couple with children could earn up to $14,480 and
    still receive the maximum credit. In addition, the proposal would
    simplify the rules for measuring earned income.

    Expanding Child Care Resources

      The President's 2001 proposal builds on the successes of last year's
    budget in which the Administration obtained $173 million to help States
    improve the quality of child care, $10 million for child care research,
    and an increase of $254 million for the Education Department's after-
    school/summer-school program.
      The budget proposes a range of further increases and new policies to
    expand the accessibility, affordability, and quality of federally-funded
    child care. The 2001 child care initiative would increase spending and
    tax incentives by $3.3 billion over 2000 (see Table 2-1).
      ----------------------------------------------------------------------

        Table 2-1.  The Budget Supports a $3.3 Billion Increase in Resources for Child Care, 36 Percent Over 2000
                                       (Budget authority, in millions of dollars)
    ----------------------------------------------------------------------------------------------------------------
                                                                                                   Change:   Change:
                                                            1993      1999      2000      2001     1993 to   2000 to
                                                           Actual    Actual   Estimate  Proposed    2001      2001
    ----------------------------------------------------------------------------------------------------------------
    Spending:
      Discretionary and Mandatory Budget Authority:
        Child Care and Development Fund \1\.............  \2\ 1,75     3,167     3,550     4,567     +2814    +1,017
                                                                 3
          Child Care and Development Block Grant........       893     1,000     1,183     2,000    +1,107      +817
          Child Care Entitlement to States..............  ........     2,167     2,367     2,567        NA      +200
        Head Start......................................     2,776     4,660     5,267     6,267    +3,491    +1,000
        Early Learning Fund.............................  ........  ........  ........       600       +NA      +600
        21st Century Community Learning Centers.........  ........       200       453     1,000    +1,000      +547
        College Campus-Based Child Care.................  ........         5         5        15       +15       +10
        Child Care Apprenticeship Program...............  ........         4         5         5        +5  ........
        Developmental Disabilities Special Projects,      ........         4         4         4        +4  ........
         State Support Systems..........................
                                                         -----------------------------------------------------------
          Total Spending................................     4,529     8,040     9,284    12,458    +7,329    +3,174

    Changes in Tax Expenditures:
      Expansion and Simplification of Child and           ........  ........  ........       121        NA      +121
       Dependent Care Tax Credit \3\....................
      Tax Credits for Private Employers.................  ........  ........  ........        42        NA      +121
                                                         -----------------------------------------------------------
          Total Changes in Tax Expenditures.............  ........  ........  ........       163        NA      +163
                                                         ===========================================================
          Total.........................................     4,529     8,040     9,284    12,621    +7,329    +3,337
    ----------------------------------------------------------------------------------------------------------------
    NA = Not applicable.

    \1\ Includes discretionary Child Care and Development Block Grant and mandatory Child Care Entitlement to
      States.

    \2\ Includes AFDC/JOBS, Transitional, At-risk, and discretionary child care programs that were consolidated into
      the Child Care and Development Fund beginning in 1997.

    \3\ Includes tax expenditures and effect on outlays.

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

    [[Page 59]]

      To make child care more affordable, the budget proposes an expansion
    of resources for the Child and Dependent Care Tax Credit, tax credits
    for private employers, the Child Care and Development Fund, and college
    campus-based child care. In addition, it continues the existing child
    tax credit and exclusion of employer contributions for child care
    expenses.

      Child and Dependent Care Tax Credit (DCTC): The DCTC helps
    approximately six million families cover their child care costs each
    year. This proposed expansion will gradually make the credit refundable
    so it will be available to low-income working families for the first
    time. The expansion will also increase the amount of the credit for
    middle-income families who are struggling to afford child care. The
    budget also proposes further expansion of this tax credit to help
    parents who choose to stay home to raise a young child. These proposals
    would provide tax credits worth $7.5 billion over five years.
      Tax Credits for Private Employers: To encourage businesses to provide
    child care services to their employees, the budget proposes a new tax
    credit for private employers that expand or operate child care
    facilities, train child care workers, contract with a child care
    facility to provide child care services to employees, or provide child
    care resource and referral services to employees. This proposal would
    provide tax credits worth over $500 million over five years.
      Child Care and Development Fund: Federal funding for child care has
    more than doubled under this Administration, providing child care
    services for 1.75 million children from low-income working families or
    families mov

    [[Page 60]]

    ing from welfare to work in 1999. The budget would further increase
    funds for the Child Care and Development Fund by $817 million, enabling
    the program to provide child care subsidies for nearly 150,000
    additional poor and near-poor children in 2001. These new funds will
    bring the Child Care and Development Fund to a level of $4.6 billion,
    with $2 billion in the Child Care and Development Block Grant and $2.6
    billion in the Child Care Entitlement to States. When combined with the
    child care funds provided in welfare reform beginning in 1997, the new
    funds will enable the program to serve 2.3 million children by 2003, an
    increase of over one million since 1997.
      College Campus-Based Child Care: To encourage low-income parents to
    pursue higher education, the budget includes $15 million for the Child
    Care Access Means Parents in School program to establish and support
    child care services on college campuses. States may also use a share of
    the Child Care and Development Fund for this purpose.
      Exclusion of Employer Contributions for Child Care Expenses: The 2001
    Budget continues this measure, consistent with current law, permitting
    parents to exclude up to $5,000 of employer-provided child care expenses
    from their taxable income and Social Security earnings. The exclusion
    from income tax will provide nearly $4 billion in benefits over five
    years.
      Tax Credit to Help Meet the Cost of Raising a Child: The Child Credit,
    which the President proposed and Congress enacted as part of the 1997
    Taxpayer Relief Act, helps working parents raise their children by
    providing $500 per child for all children under age 17. The credit,
    which will provide over $93 billion in tax benefits over the next five
    years, will help 26 million families with over 44 million children in
    2001.

    Strengthening Early Childhood Learning

      The budget provides new funds to improve the safety and development of
    young children, including the new Early Learning Fund, and continued
    expansion of the highly successful Head Start program.

      Head Start: Head Start, one of the President's highest priorities, is
    America's premier early childhood development program. It supports
    working families by helping parents get involved in their children's
    educational lives and providing services to the entire family. Since
    1993, the President has worked with Congress to increase annual Head
    Start funding by 90 percent. In 2000, Head Start will serve 880,000 low-
    income children, including up to 44,000 children under age three in the
    Early Head Start component that the President launched in 1995.
      The budget proposes to expand Head Start funding by $1 billion in 2001
    and add approximately 60,000 Head Start pre-school slots and 10,000
    Early Head Start slots, bringing the total number of children in Head
    Start to approximately 950,000. The Administration intends to increase
    participation by underrepresented groups in specifically targeted areas
    with recent influxes of immigrants and limited English proficient
    children, including seasonal farmworkers. The proposed increase invests
    in program quality improvement measures and makes further progress
    toward the President's goal of enrolling a million children in Head
    Start by 2002, including doubling the number of infants and toddlers in
    Early Head Start.

      Early Learning Fund: Scientific research on reading compiled by the
    National Academy of Sciences shows that children participating in
    quality early childhood programs have significantly higher reading
    achievement from third grade through eighth grade, have fewer behavior
    problems, are less likely to be required to repeat a grade or to be
    referred to special education, and are more likely to graduate from high
    school. The White House Conference on Early Child Development and
    Learning in 1997 highlighted the importance of experiences in the early
    years of life to school readiness. In response, the Administration
    proposed the Early Learning Fund to help improve early childhood
    education for children under five years old. The budget proposes to
    establish the Early Learning Fund at a level of $3 billion over five
    years to provide community grants for activities that foster cognitive
    development. Activities would focus on language acquisition, emergent
    literacy, reading development, numeracy, and other early child

    [[Page 61]]

    hood education, health, and emotional development activities aimed at
    improving child care quality and readiness for school. Resources could
    be used to help providers obtain certification, facilitate licensing or
    accreditation of child care programs, enhance provider training and
    retention, and reduce child-to-staff ratios--quality factors associated
    with positive developmental outcomes for young children. Grants to
    States would be contingent on reporting on progress toward child care
    quality goals and on children's progress toward educational goals. A
    Federal evaluation would assess improvements in outcomes that result
    from the Fund.
      21st Century Community Learning Centers: First funded in 1997 and
    expanded dramatically in 1998, this program provides grants to public
    schools, in partnership with community-based organizations, to establish
    and expand extended learning time opportunities.
      This year, the budget proposes to more than double funding for this
    program to $1 billion, in order to reach over 10,000 schools and 2.5
    million students. The 21st Century Community Learning Centers are part
    of a comprehensive approach to fix failing schools by providing low-
    achieving students the extra help they need to meet challenging academic
    standards. The budget provides sufficient funds for this program to make
    after- and/or summer-school programs universally available to help turn
    around all Title I schools identified as low-performing, while also
    offering high quality after-school opportunities to others.

    Continuing Support for other Key Programs that Assist Families

      Investments in Child Care Quality: In response to the President's
    request for 2000, Congress provided an additional $173 million for child
    care quality activities, which supplements the $135 million that would
    already have been available for these activities in 2000. Congress has
    also advance appropriated another $173 million for quality activities
    for 2001. States invest these dollars in improving child care quality
    through activities such as resources and referrals for parents,
    scholarships and training for child care providers, monitoring and
    inspection of providers, networks for family day care providers, and
    linkages with Head Start. The budget also requests a continuation in
    2001 of the $50 million reserved in 2000 for activities to improve the
    quality of child care for infants and toddlers.
      Research on Child Development and Child Care: Research on child care,
    and dissemination of its findings, is critical to support State and
    local policy makers in their decision-making about child care and to
    help parents learn how to evaluate and where to find quality child care.
    At the President's request, Congress provided $10 million for new
    research activities in 2000 to expand our knowledge of good policies and
    practices--including the types of child care settings, parent
    activities, and provider training that most benefit the early
    development of children--and to demonstrate effective consumer education
    programs and hotlines. This budget requests $10 million in continued
    research funding for 2001.
      National Crime Prevention and Privacy Compact: Last year, the
    President and Congress worked together to pass legislation, based on a
    proposal from the White House Conference on Child Care, to help build a
    new electronic information sharing partnership among Federal and State
    law enforcement. This legislation makes background checks on child care
    providers (and other non-criminal justice checks) more efficient and
    accurate by eliminating some of the barriers that have made it difficult
    for States to share information about the criminal backgrounds of job
    seekers.
      Services for Families of Children with Disabilities: Children with
    disabilities and their families face a broad range of obstacles to
    achieving educational success. Ensuring that the educational needs of
    the youngest children with disabilities are fully met is critical to the
    Administration. (For a discussion of the Administration's work
    incentives initiative for individuals with disabilities and investments
    in special education programs, see Chapter 1, ``Investing in Education
    and Training.'')
      The budget continues a $4 million program proposed two years ago by
    the President and funded by Congress to help the families

    [[Page 62]]

    of children with disabilities. This program provides grants to States to
    expand and modify their State-wide support systems to help these
    families address such problems as inadequate child care options, missed
    job training and job opportunities, the loss of medical assistance, and
    teen pregnancy.

    Promoting Self-Sufficiency

      Improving Access to Food Stamps: For many low-income working families,
    access to food stamps can keep them out of poverty. However, between
    1995 and 1997, food stamp participation fell five times faster than the
    poverty rate, suggesting that some working families have left the
    program though they remain poor. Last year, the President took a series
    of actions to ensure working families who need food stamps know how to
    get access to them. These steps included launching a nationwide public
    education campaign and toll-free hotline to help working families know
    they are eligible for food stamps, allowing States to make it easier for
    working families receiving Temporary Assistance to Needy Families (TANF)
    to own a car and still be eligible for food stamps, and simplifying food
    stamp reporting rules to reduce bureaucracy and encourage work.
      The budget will build upon such efforts by providing funds to improve
    outreach and nutrition education to individuals who are eligible for
    food stamps. The budget also proposes to help the many working poor
    families for whom owning a vehicle is the one item that makes them
    ineligible for food stamps. For many of these families, a car is
    necessary in order to get to jobs or job training, as well as to access
    essential services, such as child care, that allow them to work. The
    budget proposes to make it easier for 245,000 individuals in working
    families to own vehicles and receive food stamps by allowing States to
    conform their food stamps vehicle policy with a more generous TANF
    program.
      In addition, the budget provides $565 million in food stamp benefits
    for legal immigrants (see discussion later in this chapter).

      Increasing Parental Responsibility Through Child Support Enforcement:
    The President's campaign to ensure that parents support their children
    is working. In 1998, the number of paternities established rose to
    nearly 1.5 million, and child support collections have nearly doubled
    since the President took office, to an estimated $15.5 billion in 1999.
    In 1999, net Federal costs for child support enforcement were $1.7
    billion.
      The budget builds on this success by taking important, additional
    steps to increase child support collections and to direct more of these
    payments to low-income families. The budget expands the Administration's
    Family First policy enacted under welfare reform by allowing States to
    adopt simplified child support rules under which all collections made on
    behalf of former welfare families would be paid to the family. This
    proposal would result in an additional $815 million in child support
    paid to these families over five years, improving their chances of
    staying off the welfare rolls.
      The budget also proposes to provide Federal matching funds for child
    support that States distribute to families on welfare above States'
    current efforts. Matching funds would only be available for child
    support which does not reduce the family's cash benefit, resulting in an
    estimated $388 million more in child support income for families on
    welfare over five years. In addition, the budget would require States to
    review child support orders for these families every three years,
    increasing the Federal share of child support collections by $262
    million through 2005.
      The budget includes several new measures to increase child support
    collections from parents who owe past-due child support. The budget
    proposes to intercept the gambling winnings of these parents, and to
    offset their Social Security and other Federal benefits to collect past-
    due support. The budget would also add vehicle booting to the set of
    enforcement tools available to States to bring delinquent non-custodial
    parents into compliance. The budget would also deny passports to
    delinquent non-custodial parents with more than $2,500 in child support
    arrears, lowering the threshold from $5,000 under current law, and
    prohibit them from enrolling as a Medicare provider. These proposals
    would result in $669 million more paid to families

    [[Page 63]]

    through 2005, and would provide Federal savings of $362 million.
      The budget stabilizes State and Federal funding of the child support
    program. The budget improves the methodology for awarding incentive
    payments to States to make these payments a more reliable funding stream
    for States. The budget also conforms the Federal match rate for
    paternity testing with the lower administrative match rate, resulting in
    $41 million in Federal savings over five years.

      Supporting Children Leaving Foster Care: An estimated 20,000 children
    leave foster care each year having reached the age of 18 without being
    adopted or finding another permanent relationship. Without the
    financial, as well as social and emotional support that families
    provide, many of these youth find themselves inadequately prepared for
    life on their own. Studies that examined former foster youth two to four
    years after leaving care found that only half had completed high school,
    less than half were employed, and only about 40 percent had held a job
    for one year or more. Of these young adults, one-fourth had been
    homeless at least one night, 60 percent of the females had given birth,
    and fewer than one in five were completely self-supporting. In November
    1999, working together with Congress, the President secured a 50-percent
    increase in funds to help former foster youth transition to adulthood,
    and new authority giving States the option of providing Medicaid
    coverage to these youth up to age 21. The budget proposes to increase
    2000 funding for this program to $140 million, the full amount
    authorized and double the amount provided in 1999, and to maintain this
    higher level in 2001.
      Working to End Violence Against Women: Since 1993, funding for
    services to victims of domestic and sexual violence has grown by over
    $400 million and the passage of the Violence Against Women Act of 1995
    expanded the Government's role in supporting services and providing
    scientific knowledge to prevent and treat violence against women. The
    budget proposes an increase of over $20 million to further strengthen
    and increase the availability of battered women's shelters and
    counseling services, increase culturally appropriate services in under-
    served populations, and expand resources for research and prevention
    activities aimed at changing the social norms that allow this violence
    to occur. These new funds will allow programs addressing violence
    against women to serve an additional 30,000 women and children.
      Assisting Impoverished Border Communities: The budget provides $5
    million in assistance for rural, impoverished communities along the
    United States/Mexico border. Almost all of the residents in these
    communities are poor, and one-third receive no food assistance. These
    funds will help to build partnerships that will improve the delivery of
    nutrition assistance, health, and other programs to these impoverished
    areas.

    Restoring Equity in Benefits for Legal Immigrants

      The President believes that legal immigrants should have the same
    economic opportunity, and bear the same responsibility, as other members
    of society. Upon signing the 1996 welfare law, he pledged to work toward
    reversing the unnecessary cuts in benefits to legal immigrants that were
    unrelated to the goal of moving people from welfare to work. As part of
    the 1997 Balanced Budget Act, the President worked with Congress to
    restore Medicaid and Supplemental Security Income (SSI) to hundreds of
    thousands of disabled and elderly legal immigrants. The next year, the
    Noncitizens' Benefit Clarification and Other Technical Amendments Act
    restored eligibility to additional legal immigrants. In response to the
    Administration's request, the 1998 Agricultural Research Act restored
    food stamp benefits to 225,000 elderly, disabled, and other needy
    immigrants, including 70,000 children who lawfully resided in the United
    States as of August 22, 1996.
      Despite these gains, many legal immigrants, including disabled
    individuals and families with children, remain ineligible for nutrition
    assistance, health, and disability benefits. The budget provides $2.5
    billion over five years to let States provide health care to legal
    immigrant children and pregnant women, to restore SSI eligibility to
    legal immigrants with disabilities, and to restore food stamp
    eligibility to certain aged immigrants and

    [[Page 64]]

    to legal immigrants in families with eligible children. The SSI and
    related Medicaid benefits in the budget that apply to immigrants who
    entered the country after August 1996, and became disabled thereafter,
    would only start after five years of residence.

      Health Care: As described in Chapter 3, ``Strengthening Health Care,''
    the budget would let States provide health coverage to legal immigrant
    children and pregnant women under Medicaid and, in the case of children,
    SCHIP. Currently, States can provide health coverage to legal immigrants
    who entered the country before the welfare law was enacted. But,
    immigrants who entered after the law was enacted cannot get benefits for
    five years. Under these proposals, States could provide health coverage
    to those children and pregnant women through Medicaid or through SCHIP.
    In addition, parents of legal immigrant children who have coverage
    restored would also be covered by the Medicaid/SCHIP family coverage
    policy described in Chapter 3, ``Strengthening Health Care.''
      Supplemental Security Income (SSI): The budget would provide
    approximately $1.2 billion over five years to restore SSI and related
    Medicaid to legal immigrants who entered the country after August 22,
    1996, lived in the United States for more than five years and became
    disabled after entry. Currently, only legal immigrants who entered the
    country before August 22, 1996, can be found eligible for SSI disability
    benefits.
      Food Stamps: As mentioned earlier in this chapter, the budget provides
    $135 million over five years to ensure that legal immigrants in the
    United States as of August 22, 1996, who are eligible for food stamp
    benefits may receive them once they reach age 65. In addition, the
    budget builds on the progress made in the Agricultural Research Act by
    providing $430 million over five years to restore benefits to adult
    legal immigrants who were residing in the United States before August
    22, 1996, and are currently living with eligible children.

    Continuing Support for Working Families

      The Administration is committed to policies that encourage the
    transition from welfare to work, and, once that transition has been made
    with success, supporting the efforts of working families so that they
    will stay in the work force and move forward (see Table 2-2).
      ----------------------------------------------------------------------

     Table 2-2.  The Budget Includes $290 Billion Over Five Years in Support for Families with Children Through the
                                                       Tax System
                                                (In millions of dollars)
    ----------------------------------------------------------------------------------------------------------------
                                                                                Estimate
                                                       1993  ---------------------------------------------   Total
                                                      Actual    2001     2002     2003     2004     2005   2001-2005
    ----------------------------------------------------------------------------------------------------------------
    Tax Expenditures
    Existing Law: \1\
      Earned Income Tax Credit 2, 3................   12,400   29,935   31,193   32,162   33,445   34,746    161,481
       Child Tax Credit  2.........................  .......   20,000   19,475   18,615   17,985   17,275     93,350
       Child and Dependent Care Tax Credit.........   \4\ 2,    2,360    2,330    2,305    2,275    2,250     11,520
                                                         559
       Exclusion of Employer Contributions for       .......      700      725      765      805      850      3,845
       Child Care Expenses.........................

    Proposed Legislation:
      Expand and Simplify the Earned Income Tax      .......    2,308    2,240    2,281    2,318    2,340     11,487
       Credit 2, 5.................................
       Expand and Simplify the Child and Dependent   .......      121      589      922    2,715    3,144      7,491
       Care Tax Credit 2, 6........................
      Tax Credits for Private Employers for Child    .......       42       88      121      140      148        539
       Care Expenses...............................
                                                    ----------------------------------------------------------------
        Total......................................  .......   53,270   56,640   57,171   59,683   60,753    289,713
    ----------------------------------------------------------------------------------------------------------------
    \1\ Does not include interaction effects between provisions.

    \2\ Includes tax expenditures and effect on outlays.

    \3\ Excludes credit for workers who do not live with children.

    \4\ Calendar year actual for 1993.

    \5\ Includes an expansion of the credit for families with three or more children, a slower phaseout of the
      credit for families with two or more children, marriage penalty relief for two-earner couples, and
      simplification of the earned income definition.

    \6\ Includes an expansion of the credit for families with earnings below $60,000, a phase-in of refundability,
      and assistance for stay-at-home parents of infants.

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

      Helping Families Move from Welfare to Work: The President has led
    successful efforts to help millions of families make a successful
    transition from welfare to work.
      Temporary Assistance for Needy Families (TANF): The President signed
    the Personal Responsibility and Work Opportunity Reconciliation Act
    (PRWORA) in 1996, and States have refocused their welfare systems to
    support work. Welfare caseloads have fallen by over five million since
    President Clinton signed the welfare reform law, and by over 50 percent
    since he took office, to their lowest level in 30 years. Moreover,
    recent data from the Census Bureau's Current Population Survey show an
    82-percent increase in the rate of employment for individuals leaving
    welfare since 1992.
      Welfare-to-Work (WtW) Grants: Because of the President's leadership,
    the 1997 Balanced Budget Act included $1.5 billion in 1998 and 1999 for
    a new Welfare-to-Work grants program. WtW provides grants to States and
    local communities to help long-term, hard-to-employ welfare recipients,
    and certain non-custodial parents, secure lasting, unsubsidized
    employment. Grantees may spend their funds for up to three years after
    receipt.
      Funds are used for job creation, job placement, job retention,
    training, and other post-employment support services. Working closely
    with Congress, the Administration secured critically needed changes to
    WtW's eligibility requirements. The streamlined eligibility criteria
    will allow WtW to use existing resources to more effectively help long-
    term welfare recipients and non-custodial parents of low-income children
    work and support their children. To allow grantees to fully implement
    these program improvements, the budget proposes a two year extension of
    the period of time in which existing funds can be spent.
      To build on the investments and partnerships begun under the Welfare-
    to-Work program and the Workforce Investment Act, this budget proposes
    an additional $255 million for Fathers Work/Families Win, including

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    a $10 million set aside to provide grants to Indians.
      Fathers Work/Families Win: This initiative includes $125 million for
    Fathers Work to put non-custodial parents (mainly fathers) who owe child
    support to work and help engage them in the lives of their children. As
    part of this effort, States will need to put in place procedures to
    require more non-custodial parents--whether their child is on welfare or
    not--to pay child support or go to work. The remaining $120 million will
    be dedicated to Families Win to help low-income parents stay in their
    jobs, move up the career ladder, and remain off cash assistance.
    Competitive grants would be awarded to business-led State and local work
    force boards who demonstrate strong partnerships with community based
    organizations, faith based organizations, public entities such as
    Medicaid, food stamps, child support enforcement, TANF, and child care
    resources, transportation agencies, public housing authorities, and
    postsecondary schools. Families Win will provide resources for case
    management and skill training for low-income families to ensure
    retention, advancement, and long-term success in the work force through
    improved access to training and food stamps, Medicaid, child care, and
    other critical support for eligible working families. Families Win
    includes $5 million to finance improved information and access for low-
    income families through the One-Stop delivery system to the range of
    existing work supports and services such as food stamps, Medicaid, and
    the EITC.
      Welfare-to-Work Transportation: One of the biggest barriers facing
    people who move from welfare to work--in cities and in rural areas--is
    finding transportation to get to jobs, training programs and child care
    centers. The President's leadership on this issue helped secure funding
    through 2003 to assist States and localities in developing flexible
    transportation alternatives, such as van services, for welfare
    recipients and other low-income workers. The budget proposes to double
    funding to $150 million for this program in 2001.

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      Welfare-to-Work Housing Vouchers: In the 1999 Budget, the President
    proposed $283 million for 50,000 new housing vouchers for welfare
    recipients who need housing assistance to get or keep a job, and
    Congress approved full funding for this new initiative. Families will
    use these housing vouchers to move closer to a new job, to reduce a long
    commute, or to secure more stable housing to eliminate emergencies that
    keep them from getting to work every day on time. The budget proposes
    $183 million for an additional 32,000 vouchers, bringing the total
    number of welfare-to-work vouchers to 82,000 in 2001.
      Individual Development Accounts (IDAs): Since 1992, President Clinton
    has supported the creation of IDAs, savings accounts to help low-income
    workers buy a first home, finance postsecondary education, or start a
    new business. The President signed into law in 1998 legislation
    providing $10 million to get the program off the ground. The budget
    provides $25 million for IDAs. The Administration will propose
    legislation to allow low-income workers' families to use IDAs to save
    for a car that helps them get or keep a job.
      Social Services Block Grant (SSBG): SSBG supports an array of critical
    services to more than nine million low-income children and adults. The
    budget proposes to fund the SSBG at $1,775 million in 2001, an increase
    of $75 million over the authorized level to maintain funding at the 2000
    level. Of this amount, $25 million will be available to support second
    chance homes for unmarried teen parents and their children who cannot
    live at home or with other relatives. The basic SSBG grant provides
    funding to States to support a wide range of programs including child
    protection and child welfare, child care, and services focused on the
    needs of the elderly and the disabled. The inherent flexibility of this
    grant permits States to target funds to meet the specific needs in their
    communities.
      Special Supplemental Nutrition Program for Women, Infants, and
    Children (WIC): The Administration has continued to target resources to
    low-income infants and children. WIC, for example, reached over 7.3
    million persons each month in 1999. Funding in 2000 is sufficient to
    serve 7.4 million women, infants, and children, and the budget proposes
    $4.1 billion to serve 7.5 million people by the end of 2001, fulfilling
    the President's goal of full participation in WIC. (See Chapter 3,
    ``Strengthening Health Care'', for more information on WIC.)

      Providing Better Benefits in the Workplace: The President has led
    successful efforts to ensure a living wage for all American workers
    while expanding their ability to care for their families and protect
    their health care benefits. In addition, the President has proposed an
    innovative way to allow States to provide partial wage replacement for
    parents who need to take leave to care for a newborn or recently adopted
    child.
      Expanding the Family and Medical Leave Act (FMLA): In early 1993, the
    President proposed, and Congress enacted FMLA, which allows covered
    workers to take up to 12 weeks of job-protected, unpaid leave to care
    for a newborn or adopted child, attend to their own serious health
    needs, or care for a seriously ill parent, child, or spouse making it
    less likely that employees will have to choose between work and family.
    The President continues to support expansion of FMLA to reach workers in
    firms with 25 or more employees, extending coverage to almost 12 million
    more workers.
      Making family leave more affordable: Many workers face barriers to
    taking advantage of unpaid leave. A 1996 Study found that loss of wages
    was the most significant barrier to parents taking advantage of unpaid
    leave following the birth or adoption of a child. To address the
    existing barriers, the President's budget provides $20 million for
    competitive planning grants to States and other entities to explore ways
    to make parental leave and other forms of family leave more affordable
    and accessible for American workers. This initiative would enable States
    and others to identify the workers who need financial assistance to take
    parental leave or other forms of family leave and to evaluate and
    develop options to aid these workers.

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      Ensuring equal pay: The budget includes $27 million for the
    President's Equal Pay Initiative, an increase of $12 million over 2000.
    The initiative requests $10 million for the Equal Employment Opportunity
    Commission (EEOC) to provide training and technical assistance to about
    3,000 employers on how to comply with equal pay requirements and to
    launch a public service announcement campaign on wage issues. The
    initiative also dedicates $10 million in the Department of Labor (DOL)
    to train women in nontraditional jobs including high-tech jobs and other
    skill shortage occupations. Lastly, the initiative provides $7 million
    for DOL to help employers assess and improve their pay policies, support
    public education efforts, provide for projects in nontraditional
    apprenticeships, and implement industry partnerships.
      Increasing the minimum wage: In 1996, the President successfully
    sought a minimum wage increase that gave a big financial boost to full-
    time, full-year minimum wage workers, raising the pay of each by
    approximately $1,800 a year. In November 1999, the President reiterated
    his support to further raise the minimum wage to $6.15 an hour by the
    beginning of 2001. Increasing the minimum wage by one dollar in two
    equal steps simply restores the real value of the minimum wage to what
    it was in 1981. More than 10 million workers would benefit under this
    proposal. This increase will help ensure that as costs continue to
    increase, parents who work hard and play by the rules can bring up their
    children out of poverty. The President remains strongly committed to
    increasing the minimum wage and will work with Congress to ensure the
    enactment of this vital increase.