[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

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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

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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

[[Page 65]]

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.
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