    [Budget of the United States Government]
    [III. Creating a Better Government]
    [11. Education, Training, Employment, and Social Services]
    [From the U.S. Government Publishing Office, www.gpo.gov]

            11.  EDUCATION, TRAINING, EMPLOYMENT, AND SOCIAL SERVICES

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

            Table 11-1.  Federal Resources in Support of Education, Training, Employment, and Social Services
                                                (In millions of dollars)
    ----------------------------------------------------------------------------------------------------------------
                                                                                   Estimate
                   Function 500                   2000   -----------------------------------------------------------
                                                 Actual     2001      2002      2003      2004      2005      2006
    ----------------------------------------------------------------------------------------------------------------
    Spending:
      Discretionary Budget Authority..........    44,378    61,146    65,424    67,060    69,049    70,661    72,273
      Mandatory Outlays:
        Existing law..........................    10,266     9,145    14,304    14,522    14,757    15,315    16,183
        Proposed legislation..................  ........  ........        90       315       387       393       398
    Credit Activity:
      Direct loan disbursements...............    16,425    19,061    16,579    17,460    18,395    19,387    20,442
      Guaranteed loans........................    26,602    29,501    30,742    32,421    34,228    36,153    38,202
    Tax Expenditures:
      Existing law............................    36,030    37,780    38,770    40,410    43,210    45,010    47,500
    ----------------------------------------------------------------------------------------------------------------

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

                             DEPARTMENT OF EDUCATION

    Elementary and Secondary Education

      The President's education reform plan is devoted to two fundamental
    principles: that all children can learn, and that no child should be
    left behind. Our K-12 education system needs to do more to live up to
    its potential to prepare all our students for productive lives in the
    21st Century. The academic achievement gap between rich and poor and
    Anglo and minority is large and, in some cases, growing larger. Nearly
    70 percent of fourth-grade students in our highest-poverty schools
    cannot read at a basic level. And our high school seniors trail students
    in most industrialized countries on international math tests. This
    Administration is committed to improving the academic performance of
    America's youth.
      The President's agenda measures how well we are educating our
    children, not in dollars or numbers of programs, but in results. The
    budget reflects a bold and ambitious plan for reauthorizing the
    Elementary and Secondary Education Act (ESEA) that places accountability
    for improved achievement at the center of K-12 reforms. It lays the
    foundation for learning by ensuring that every child can read by the
    third grade. It streamlines dozens of overlapping programs into five
    performance-based funding streams that allow States the flexibility to
    address their unique needs. And it empowers parents with more choices in
    the education of their children.

      Accountability for Results: The President's plan would grant States
    and school districts unprecedented freedom from rules and regulations--
    in exchange for accountability for results. States will establish
    accountability systems built on high standards, annual tests, measurable
    goals, rewards for success, and sanctions for failure. They will be
    required to test students every year in grades 3-8 in math and reading
    so that parents, teachers, and communities will know if their schools
    and students are meeting State academic standards. The budget provides
    $320 million to support the costs of developing new assessments. Once
    accountability systems are in place, a new Federal fund will reward
    States and schools that improve student achievement. The budget also

    [[Page 84]]

    provides $109 million, a $69 million increase, to expand the National
    Assessment of Educational Progress to administer tests in reading and
    math in 4th and 8th grade every year. These tests, sometimes called the
    Nation's report card, will provide additional information on whether
    States are on track toward success.
      Part of the Administration's ESEA reauthorization strategy for
    improving accountability will be the implementation of performance-based
    grants. Once ESEA is passed this year, States will set performance
    targets for the major ESEA programs and strategies for meeting them. In
    future years, the Department of Education will revise and refine its own
    performance goals based on State targets and plans.

      Title I--Closing the Achievement Gap for Disadvantaged Students: While
    the Federal Government is the junior partner to States and local
    governments in providing education to our children, it has a special
    obligation to our most disadvantaged students, in particular those who
    are low income or with limited English proficiency. The Title I Grants
    to Local Educational Agencies (LEAs) program enables high-poverty
    schools to provide extra educational assistance to help their students
    to catch up with their peers. The Administration seeks $9.061 billion,
    an increase of $459 million or 5.3 percent, to help students most at-
    risk of not reaching State standards improve their academic achievement.
    The President's plan would require States to set measurable performance
    targets to ensure that all groups of disadvantaged students improve, and
    would hold States, districts, and schools accountable for meeting those
    goals. Schools that fail to meet performance targets will receive help
    to turn themselves around. The Administration seeks $400 million within
    Title I Grants to LEAs for low-performing schools, a $175 million, or
    78-percent, increase over 2001. States will use these funds to provide
    technical assistance and intensive interventions to improve achievement
    in schools that are failing to make sufficient academic gains. To ensure
    that no student is trapped in a chronically failing school, students in
    schools that are consistently low-performing will have the option of
    transferring to a better public school, or of using their share of
    Federal Title I funds to seek supplemental educational services or
    private school alternatives. This combination of accountability for
    improved achievement among all groups of students, extra help for
    struggling schools, and the unacceptability of chronic failure, provides
    powerful incentives for all Title I schools to use their funds on
    effective, proven practices in order to achieve results.
       The Administration's goal is to ensure that the performance
              of our lowest-achieving students and students in high-poverty
              schools will increase substantially in reading and
              mathematics.

      Reading First: The budget builds a foundation for success by investing
    $900 million in the Reading First initiative to help all children read
    by the third grade. This new program will provide funds to States that
    establish comprehensive reading programs in kindergarten through third
    grade. States would be required to implement scientifically proven
    reading programs, train K-3 teachers in proven teaching practices,
    implement effective reading interventions for students who are falling
    behind, and use a reading diagnostic test in K-3 to identify students
    early who have reading difficulties. Ensuring that children receive
    effective reading instruction means that more children will get the help
    they need before they fall too far behind, and will result in fewer
    referrals to special education in later years. The budget also includes
    an additional $75 million for the Early Reading First initiative that
    helps implement research-based reading practices in existing pre-school
    and Head Start programs that feed into participating elementary schools.
    This program will help ensure that children enter school ready to learn
    to read.
       These two programs will help the Nation make significant
              progress toward the goal of ensuring that all students can
              read by the third grade.

      Improving Teacher Quality: Improvements in student achievement begin
    with an effective teacher in every classroom. Unfortunately, some
    schools are not yet meeting this challenge. They are unable to retain
    promising new teachers and employ a complete staff of fully qualified
    teachers. Currently, 22 percent of all new teachers leave teaching in
    their first three years of service. In high-poverty

    [[Page 85]]

    secondary schools, 12 percent of teachers only hold a temporary or
    emergency certification, and 18 percent teach out of their field of
    expertise. The President requests $2.6 billion, an increase of $0.4
    billion to prepare, train, and recruit a high-quality teaching force.
    States would have the flexibility to invest these funds to address their
    most pressing quality improvement needs, whether it be to alleviate
    shortages, enhance skills, or reform the certification process. The
    President's plan combines the funding from the largest Federal teacher
    programs, including the Class Size Reduction program and Eisenhower
    Professional Development programs, into a streamlined, performance-based
    grant to States and school districts. In addition, the budget provides
    $30 million to expand and build on the Troops to Teachers program,
    currently adminstered by the Department of Defense, which helps military
    professionals become teachers and serve in high-need communities.
      An expanded Math and Science Partnership program, administered by the
    National Science Foundation in coordination with the Department of
    Education, would provide funds to States to join with institutions of
    higher education to strengthen K-12 math and science instruction and
    curriculum. The Administration requests $200 million for this program
    (see Chapter 4, ``General Science, Space, and Technology'').
       One performance goal of this program is to help increase the
              percentage of teachers with improved knowledge and skills in
              core academic subjects.

      Moving Limited English Proficient Students to English Fluency: Over
    the last two decades, the population of limited English proficient (LEP)
    children in the 50 States has grown dramatically, increasing from less
    than one million in 1980, to approximately 3.4 million in the 1996-1997
    school year. LEP students face unique challenges in achieving to the
    same high standards expected of all students--many must face the
    difficult task of learning the English language while simultaneously
    mastering the content of academic subjects. Unfortunately, many English
    language-learners, when compared with their English-fluent peers,
    receive lower grades and often score below average on standardized math
    and reading assessments. The President's reform plan proposes to
    consolidate Bilingual and Immigrant Education funds into a $460 million
    formula-driven grant to provide school districts with added flexibility
    in exchange for more effective transitioning of LEP and immigrant
    students into English fluency and for improving their overall
    achievement levels. States would be required to establish performance
    goals for English language acquisition and develop high-quality annual
    assessments to measure English language proficiency. In addition, both
    States and school districts will be held accountable for ensuring that
    LEP and immigrant students meet State academic achievement goals.
       The Administration's goal is to improve significantly the
              English proficiency and academic achievement of limited
              English proficient and immigrant students.

      Indian Education: American Indians have made progress in recent
    decades but continue to be disproportionately affected by poverty and
    low educational attainment. For example, American Indian students, on
    average, score lower on the National Assessment of Educational Progress
    and the Scholastic Aptitude Test than other students. To address these
    issues, the budget provides $116 million to support formula grants to
    local educational agencies and Bureau of Indian Affairs operated schools
    to implement programs that address the special educational and cultural
    needs of Indian children. In order to address the critical shortage of
    trained Indian professionals in schools with high concentrations of
    American Indian students, funding for both the American Indian Teacher
    Corps and American Indian Administrator Corps initiatives will continue
    at the 2001 level.
       American Indian and Alaska Native students served by LEAs
              receiving Indian Education formula grants will progress at
              rates similar to those for all students in achievement to
              standards, promotion, and graduation.

      Safe and Drug Free Schools: The President's plan for improving school
    safety and drug-use prevention emphasizes research-based practices,
    includes tougher enforcement of existing gun laws, grants teachers
    control over their own classrooms, improves

    [[Page 86]]

     cooperation between school districts and law enforcement, and stresses
    accountability for results. Under the $644 million Safe and Drug Free
    Schools program, districts will be held accountable for the
    effectiveness of their crime prevention and drug outreach activities,
    and students trapped in persistently dangerous schools will have the
    option to transfer to a safe alternative.
      21st Century Community Learning Centers: The budget includes $846
    million for a more flexible after-school program that allows States to
    award Federal funds to school districts, private organizations, and
    faith-based entities, thereby empowering local communities to provide a
    wider array of choices for students and parents. Expanding access to
    high-quality before- and after-school programs is a key strategy in
    providing students safe and supervised environments and extending
    learning time to improve student achievement. States would conduct grant
    competitions to support before and after-school programs that are proven
    to be effective and advance statewide academic achievement goals.
       This program will be supplemented by two new initiatives in other
    agencies. The budget requests $400 million for After-School Certificates
    within the Child Care and Development Block Grant in the Department of
    Health and Human Services to help low income working parents obtain
    quality after school childcare with a strong educational component. The
    Corporation for National and Community Service will provide $15 million
    for the Veterans Mission for Youth, a new initiative that will provide
    matching grants to community organizations that connect veterans and
    retired military personnel with America's young people through
    mentoring, tutoring, after-school and other programs.

      The Choice and Innovation Fund: The most direct form of accountability
    is parents' ability to choose the school their children will attend. The
    Administration is committed to expanding the educational choices that
    parents and students have. Under the new Choice and Innovation fund, the
    Administration consolidates 10 programs to create a $472 million fund
    that provides States with the flexibility to pursue a range of effective
    education reform strategies, including school choice, that address areas
    of State and local need. A separate Reform and Innovation fund supports
    character education and allows the Secretary to fund projects that
    address national priorities in K-12 education.
      Educational Technology: The budget supports a streamlined educational
    technology fund that consolidates nine overlapping programs into one
    flexible $817 million fund. The President believes that technology must
    be used to improve learning and that Federal funding for educational
    technology must focus on results. This performance-based formula grant
    will provide States greater discretion to make educational technology an
    effective learning tool, and ensure that more technology funds reach the
    classroom.
       The Administration is seeking administrative improvements in the E-
    rate to ensure that this program provides greater flexibility to schools
    and libraries in how they use their E-rate discounts, while reducing the
    administrative burden they have faced in applying for educational
    technology funds. The Administration also proposes $80 million in
    matching grants, through the Department of Housing and Urban
    Development's Community Development Block Grant, to support Community
    Technology Centers in high poverty areas. (See Chapter 10, ``Community
    and Regional Development.'')

      Impact Aid and School Construction: The budget proposes $1.130 billion
    for the Impact Aid program, a $137 million increase from the 2001
    appropriation. The request provides a significant increase for the
    Impact Aid construction program to improve the quality of public school
    buildings and eliminate the backlog of repairs and construction for
    schools on or near military facilities and those serving children from
    Native American lands.
       Special Education: Under the Individuals with Disabilities Education
    Act (IDEA), the Department of Education works with States to ensure that
    more than six million children with disabilities receive a ``free
    appropriate public education'' that prepares them for employment and
    independent living, and that all schools are held accountable for the
    educational results of special education children. The President's
    education reform plan will require States to report on the educational

    [[Page 87]]

    progress of all student groups--including students with disabilities. In
    addition, the President's new Reading First initiative will help ensure
    that fewer children are referred to special education simply because
    they did not receive proper reading instruction in the crucial early
    years. The Administration seeks $7.3 billion for IDEA Part B Grants to
    States--the primary special education program--a $1 billion increase.
       One measure of success in the IDEA program is the increase in the
    percentage of students with disabilities who are graduating from high
    school with a regular diploma and the reduction in the number who are
    dropping out.
       In the 1998-1999 school year, 57 percent of students with
              disabilities left school by graduating with a regular diploma
              and 29 percent dropped out of school. The Administration's
              goal for the 2001-2002 school year is that 59 percent of
              students with disabilities will graduate with regular diplomas
              and that no more than 27 percent will drop out.

      Vocational and Adult Education: The President requests significant
    resources for the Department of Education's Vocational and Adult
    Education programs to help Americans of all ages obtain the training and
    education they need to succeed in a rapidly changing economy. Vocational
    Education programs, including State grants and Tech-Prep, help States
    and communities develop the academic, vocational, and technical skills
    of students in high schools and community colleges. Adult Education
    State grants and other programs fund State and local activities that
    enable adults to become literate and complete high school so that they
    can succeed as workers, parents, and citizens. Access to Adult Education
    programs is particularly important for recent immigrants and other
    limited English proficient adults who wish to learn English and further
    their education.
       The Administration's goal is to provide students with
              increased access to improved vocational and adult education
              programs that strengthen educational achievement, workforce
              preparation, and lifelong learning.

    Postsecondary Education

      Pell Grants: Low-income and minority students continue to lag behind
    their peers in college enrollment and graduation rates. In 1998, 77
    percent of students from high-income families entered college after
    completing high school, compared to 46 percent of high school graduates
    from low-income families. To help increase access to postsecondary
    education for disadvantaged students, the Administration proposes to
    increase funding for Pell Grants by $1 billion in the 2002 Budget. This
    level would fund a $100 increase in the maximum award for all students,
    fill a projected shortfall of over $100 million in the 2001 award year,
    and create a small surplus in the program.
       At the President's budget level, over four million low- and
              middle-income college students would receive Pell Grants in
              2002, when the maximum award would be $3,850.

      TRIO: The gap in college enrollment rates between low-income students
    and other students is due to differences not only in financial resources
    but also in academic preparation and support. The President proposes a
    $50 million increase for TRIO programs to promote college success for
    disadvantaged young people. TRIO programs provide tutoring, college
    outreach, and student support services to help low-income, first-
    generation college, and disabled individuals achieve academic success
    beginning in middle school, throughout high school and college, and into
    graduate school.
       TRIO projects aim to increase participating students'
              persistence in and completion of academic programs. In 1998,
              29 percent of participants in the TRIO program Student Support
              Services had earned a degree from the college where they began
              within six years.

      Aid for Institutional Development: The President requests significant
    increases to Department of Education programs supporting Historically
    Black Colleges and Universities (HBCUs), Historically Black Graduate
    Institutions (HBGIs), and Hispanic-Serving Institutions (HSIs) as the
    first installment of the President's plan to increase funding for these
    institutions by 30 percent between 2001 and 2005. HBCUs and HBGIs
    receive a combined

    [[Page 88]]

    $15 million, seven-percent increase over 2001; the increase for HSIs is
    $4 million, or six percent. The budget also includes funding to support
    Tribal Colleges and other institutions that serve low-income students
    and that have low per-pupil expenditures. This funding would help these
    educationally and historically important institutions increase their
    capacity to serve low-income and minority college students and will help
    ensure equal access to postsecondary education for all Americans. The
    performance goals for these programs are:
       The percentage of HBCUs, HBGIs, HSIs, and other institutions
              serving disadvantaged populations having specialized
              accreditation, a measure of academic program quality, will be
              maintained or increased. In 1998-1999, 75 percent of HSIs
              receiving title V grants and 71 percent of HBCUs, HBGIs, and
              other institutions receiving Aid for Institutional Development
              grants had at least one specialized accreditation.
       The percentage of full-time, degree-seeking students enrolled
              at HBCUs, HBGIs, HSIs, and other institutions serving
              disadvantaged populations who complete a degree or certificate
              will increase over time. In 1997-1998, 35 percent of students
              at four-year schools receiving Aid for Institutional
              Development completed their degrees within six years. Of
              students at two-year schools, 18 percent earned a degree or
              certificate or transferred to a four-year school within three
              years.

      Student Loans: The Federal Government plans to provide nearly $37
    billion in new student loans to 5.5 million borrowers in 2002. Loans are
    provided through two programs: the Federal Family Education Loan (FFEL)
    program and the Federal Direct Student Loan (FDSL) program. The FFEL
    program will originate approximately two-thirds of new loan volume
    through a network of approximately 4,100 private lenders, 36 guaranty
    agencies, 50 participants in the secondary markets, and over 4,000
    participating schools. The Federal Government provides lenders with a
    98-percent guarantee against default and interest subsidy payments to
    ensure a sufficient lender rate of return. The FDSL, created in 1993,
    provides the remaining third of new student loan volume directly from
    the Department of Education through participating schools.
       Under current law, teachers who are employed in high-poverty schools
    for five years may have up to $5,000 of their Federal student loans
    forgiven. The Administration proposes to expand this program to allow
    individuals who majored in math or science and who teach those subjects
    in high-need schools to have up to $17,500 of their loans forgiven.

      Vocational Rehabilitation Services: The Vocational Rehabilitation (VR)
    program helps individuals with disabilities prepare for and obtain
    gainful employment to the extent of their capabilities. State VR
    agencies are also required One-Stop partners under the Workforce
    Investment Act of 1998. The Administration proposes $2.5 billion for the
    VR program, an $82 million increase.
       Today, the unemployment rate for Americans with disabilities is
    unacceptably high, and individuals with disabilities face significant
    obstacles in obtaining competitive employment in the general labor
    market.
       In 2002, one of VR's performance goals is that 63.2 percent
              of all individuals with disabilities served in the VR program
              will obtain employment, up from 62.5 percent in 1999.

      New Freedom Initiative: In addition, the Department of Education's
    budget proposal supports part of the New Freedom Initiative, to help
    individuals with disabilities access the best assistive technologies of
    today, invest in research and development so even better technologies
    will be available in the future, and promote telecommuting opportunities
    for individuals with disabilities.

    Management Reforms

      Financial Management: Since 1996, when independent audits were first
    required, the Department of Education has received only one unqualified
    audit opinion, and that was in 1997. Beginning in 1999, separate
    independent audit reports have also been prepared for the performance-
    based Student Financial Assistance (SFA) Office. Audits of both the
    Department as a whole and SFA have repeatedly found major financial
    management

    [[Page 89]]

    deficiencies. These failed audits indicate a potential for improper use
    of Government resources. Through investments in updated financial
    reporting systems, as well as better oversight and other management
    improvements, the Department expects to significantly increase the
    reliability and accuracy of its financial data. The Department's goals
    are:
       By 2002, the Department will have implemented and launched a
              new general ledger system and asset tracking software that
              will address many of the Inspector General's longstanding
              concerns about Education's financial management.
       For 2002, the Department will resolve all outstanding
              material weaknesses from prior reports and receive an
              unqualified (``clean'') audit opinion on all of its financial
              statements.
       The Department will ensure that its information systems are
              safe and secure by implementing and testing contingency back-
              up plans.

      Student Aid Modernization: The Department of Education manages the
    delivery of student aid benefits to over eight million students in
    approximately 5,300 postsecondary schools and oversees the direct and
    guaranteed loan systems, affecting 37 million individuals, 4,100
    lenders, and 36 guarantee agencies. To correct perennial deficiencies in
    the Department's student aid operations, the Higher Education Amendments
    of 1998 created the Federal Government's first performance-based
    organization, with the goal of modernizing student aid delivery and
    management. Student aid modernization is dependent on better use of
    efficient technologies, simplification of business processes, and
    seamless coordination with myriad partners in the higher education
    community.
       The three primary goals of the SFA Office, which is charged with this
    modernization effort, are to:
       Improve customer satisfaction: SFA has established the goal
              of increasing the satisfaction of customers of the student
              financial assistance programs to a level commensurate with
              private sector financial service firms. Under the national
              survey conducted by the University of Michigan in 1999, SFA
              scored 63 in satisfaction. The goal is to increase this rating
              to 74 out of 100 by 2002.
       Reduce cost: SFA has set a target to reduce the projected
              unit cost of delivering each student aid dollar by 19 percent
              by 2004. This cut in operating costs is necessary given flat
              administrative funding levels coupled with a fast-growing
              workload. In 2002, SFA will continue to re-invest all
              budgetary savings from reformed operations into the
              modernization effort in order to achieve its goal for 2004.
       Improve employee satisfaction: Recognizing that employee
              satisfaction is essential to modernizing the delivery of
              student financial assistance and achieving the aforementioned
              goals, SFA has committed to raising employee satisfaction, as
              measured by the Gallup Workplace Management (GWM) survey, to a
              level comparable to the private sector (3.6 out of 5.0) by
              2004. SFA will use the GWM to measure satisfaction at the work
              group level in order to develop action plans aimed at
              improving any areas with low scores.

      Default Prevention: Over the last eight years, outstanding student
    loan defaults have more than doubled from $12 billion to $25 billion,
    resulting in significant costs for taxpayers. As the loan programs
    continue to grow--outstanding loan volumes increased from $81 billion to
    $224 between 1993 and 2000--outstanding defaults will continue to
    increase unless the Department and its partners significantly improve
    default management and prevention activities.
       During 2001 and 2002, the Department plans to work to minimize new
    defaults and maximize loan collections through continued counseling of
    students on their loan repayment responsibilities, improved early
    identification of problem loans, and implementation of loan management
    ``best practices.''

      Reducing Erroneous Payments: As part of the Administration's
    Government reform effort to reduce erroneous payments to Pell Grant and
    student loan beneficiaries, the Departments of Education and Treasury
    plan to review their pilot program to match income data reported on
    student aid applications

    [[Page 90]]

    against IRS data, as well as the results of two test matches, to
    determine whether a permanent matching program would be cost-effective
    and consistent with relevant statutes governing taxpayer privacy and
    privacy in data sharing between agencies. A match could enable the
    Department of Education to reduce fraud and improve eligibility
    determinations in Federal student aid programs.

                               DEPARTMENT OF LABOR

       Elementary, secondary, and postsecondary education and training
    investments enable Americans to acquire the skills to get good jobs in
    an increasingly competitive global economy. In addition, most workers
    acquire more skills on the job or through the billions of dollars that
    employers spend each year to enhance worker skills and productivity.
    However, some workers also need special, targeted assistance. In
    addition to Pell Grants, student loans, and tax credits, the budget
    requests $6.6 billion for Department of Labor (DOL) programs that
    finance job training and related services. Workers who want to learn
    about job openings can use the One-Stop Career Center/Employment Service
    and DOL's popular America's Job Bank (AJB) web site, which lists an
    average of 1.5 million job vacancies daily and has over 10 million job
    searches each month. Employers can search through resumes posted on the
    AJB web site, with over 500,000 daily listings.

      The Workforce Investment Act (WIA) of 1998: The WIA took full effect
    on July 1, 2000, as the Job Training Partnership Act was repealed and
    all States began to implement the WIA requirements. The WIA calls for a
    customer-driven job training system that focuses on: streamlining
    services through One-Stop Career Centers; empowering individuals with
    the information and resources they need to choose the training that is
    right for them; providing universal access to a core set of employment
    services, such as job search assistance; increasing accountability;
    ensuring a strong role for the private sector and the local boards who
    develop and oversee programs; facilitating State and local flexibility;
    and improving the quality of youth development and job training
    services.
       In 2000, spending for the core WIA programs, including State grants
    for Dislocated Workers, Adults and Youth Activities, was well below
    expectations. The budget promotes efficiency by utilizing these
    unexpended balances to maintain current service levels in the core
    programs. The 2002 budget also supports the WIA goal of a streamlined
    job training system by reallocating funding from duplicative, or
    narrowly targeted programs in favor of the core WIA programs.
       In addition, the budget addresses shortcomings of the WIA financial
    reporting system. Currently, DOL's Employment and Training
    Administration lacks an integrated information management system for the
    regular reporting of financial and performance data. The budget provides
    resources to increase DOL financial management capacity and to
    strengthen program management through specialized oversight and
    assistance to States and other grant recipients. The budget provides
    resources to improve the Department's financial reporting systems to
    strengthen accountability.
       Over the next few years, DOL will work to implement fully the
    performance accountability provisions of the WIA. In July 2000, each
    State began implementing an accountability system to measure
    performance. The goal of this system is to optimize the return on
    investment of Federal funds directed to State and local workforce
    activities. This accountability system will assess the effectiveness of
    States and local areas in achieving positive outcomes and ensuring
    continuous improvement of their workforce investment systems. The WIA
    establishes core performance indicators related to unsubsidized job
    placements, retention, and increased earnings; customer satisfaction for
    job seekers and employers; and attainment of occupational or educational
    skills credentials. DOL worked with each State to establish appropriate
    baselines and challenging performance goals.
       The performance goals for the WIA Adult Program are to
              increase the employment, retention, and earnings of
              individuals registered. Specifically, in 2002, of those
              registered in the program, 70 percent will be employed in the
              quarter after program exit; 80 percent will be employed in the

    [[Page 91]]

              third quarter after program exit; and the average earnings
              change, compared to the third quarter prior to registration,
              for those who are employed in the third quarter after program
              exit, will be $3,423.
       The performance goals for the WIA Dislocated Worker Program
              are to increase the employment, retention, and earnings
              replacement of registered individuals. Specifically, in 2002,
              75 percent of those registered in the program will be employed
              in the quarter after exit; 85 percent will be employed in the
              third quarter after program exit; and, of those who are
              employed in the third quarter after program exit, their
              earnings will represent 92 percent of their pre-dislocation
              earnings.
       The performance goal for the WIA Youth Activities Formula
              Grants Program is to increase the number of youth making a
              successful transition to a career path. Specifically, in 2002,
              of the 14- to 18-year-old youth registered in the program, 53
              percent will be either employed, in advanced training, post-
              secondary education, military service, or apprenticeships, in
              the third quarter after program exit. Of the 19- to 21-year-
              old youth registered in the program, 77 percent will be
              employed in the third quarter after program exit.
       The WIA establishes strong ties between performance and funding. If a
    State fails to meet its expected levels of performance in any year, it
    will receive technical assistance from DOL. If a State continues to fail
    to meet its agreed-upon performance levels for a second year, or if a
    State fails to report its performance information in any year, its
    funding may be reduced by up to five percent. Because the WIA is a new
    program, the above goals will be regularly reviewed for appropriateness
    and rigor.

      One-Stop Centers/Employment Service: The One-Stop Center/Employment
    Service provides a single point of contact for information about and
    access to education, job training and employment services, and a free
    labor exchange for all job seekers and employers. It is growing more
    effective through implementation of a One-Stop delivery system. The
    budget proposes $980 million for a range of information and services,
    including self-service access to job and labor market information,
    either through the Internet or in local offices, as well as staff-
    assisted services for those needing more help.
       The performance goal for the One-Stop Centers is to increase
              the total number of job openings listed with the public labor
              exchange, including State Employment Security Agencies (SESAs)
              and AJB. Specifically, in 2002, the program plans to increase
              the total number of job openings by five percent over the 2001
              level to 13.5 million (AJB and SESAs) and increase the number
              of new employers that register with AJB by 10 percent to
              76,000.

      Work Incentive Grants: To enhance the employment prospects of
    individuals with disabilities, the budget includes $20 million for
    competitive grants to partnerships or consortia to provide new services
    and information for individuals with disabilities who want to return to
    work. These partnerships would work with the One-Stop system to augment
    its capabilities to provide timely and accurate information that people
    with disabilities need to get jobs and learn about the benefits
    available to them when they return to work. In addition, the
    partnerships would improve local service delivery by coordinating the
    State and local agencies and disability organizations that help
    individuals with disabilities prepare to enter or reenter the workforce.
       Workplace Protections: DOL regulates compliance with various laws
    that protect individuals in the workplace--a minimum wage for virtually
    all workers, prevailing wages and equal employment opportunity for
    workers on government contracts, overtime pay, restrictions on child
    labor, and time off for family illness or childbirth. (For discussion of
    workplace safety programs, see Chapter 12, ``Health.'') In these areas,
    the Federal Government seeks to increase industry's compliance with
    labor protections through voluntary compliance efforts coupled with
    continued enforcement. DOL measures the success of these efforts against
    specific measurable goals:
       In the area of workplace protection, the performance goal for
              the Department is to increase compliance--including among
              employers which were previous violators and the subject of
              repeat investigations--with

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              labor standards laws and regulations in nationally targeted
              industries, including health care, garment and agriculture.
              For example, in 2002, the Department's goal is to increase the
              compliance rate in the nationally targeted industries (or
              sectors of those industries) by an average of at least five
              percentage points.

                     DEPARTMENT OF HEALTH AND HUMAN SERVICES

      Promote Safe and Stable Families: The Administration for Children and
    Families (ACF) administers a number of programs that focus on preventing
    maltreatment of children, protecting children from abuse and neglect,
    and finding permanent placements for children who cannot safely return
    to their homes. To strengthen States' ability to promote child safety,
    permanency, and well-being, the President proposes to reauthorize the
    Promoting Safe and Stable Families program at $505 million in 2002, a
    $200 million increase over the 2001 level. These additional resources
    will help States to keep children with their biological families if safe
    and appropriate, to return children to their families, if possible, or
    to place children with adoptive families. By undertaking more
    preventative efforts to help families in crisis, the prospects for
    children to live in a permanent home are enhanced. To support these
    efforts, the President also proposes to provide an additional $2 million
    to expand collaborative Federal/State child welfare monitoring efforts.
    For those children who cannot live with their biological parents, the
    budget proposes to encourage increased adoptions by raising the adoption
    tax credit from $5,000 to $7,500.
       In 2002, decrease the percentage of children with
              substantiated reports of maltreatment who have a repeat
              substantiated report of maltreatment within six months from
              eight percent in calendar year 1998 to seven percent.
       Increase the number of adoptions from 46,000 in 1999 to
              56,000 in 2002.
       The President also proposes to provide greater assistance to older
    foster children. Approximately 16,000 young people leave foster care
    each year when they reach age 18 without an adoptive family or other
    guardian. Research indicates that these young people experience alarming
    rates of homelessness, early pregnancy, mental illness, unemployment,
    and drug abuse in the first years after they leave the system. To help
    these children, the budget proposes to provide $60 million through the
    Independent Living Program specifically for education and training
    vouchers to youth who are aging out of foster care. This initiative will
    help ensure that these young people are able to obtain the support they
    need to develop skills to lead independent and productive lives.
    Vouchers worth up to $5,000 would be available to cover the costs of
    college tuition or vocational training.

      Mentoring Children of Prisoners: The Administration proposes to create
    a new $67 million initiative within the Promoting Safe and Stable
    Families program to assist children of prisoners. This initiative will
    provide grants through States to assist faith and community-based groups
    in providing a range of activities, including family-rebuilding programs
    that serve low-income children of prisoners and probationers.
      Responsible Fatherhood Initiative: The budget includes $64 million in
    2002 ($315 million over five years) to strengthen the role of fathers in
    the lives of families. This initiative will provide competitive grants
    to faith-based and community organizations that help unemployed or low-
    income fathers and their families avoid or leave cash welfare, as well
    as to programs that promote successful parenting and strengthen
    marriage. The initiative also will fund projects of national
    significance that support expansion of State and local responsible
    fatherhood efforts.
      Head Start: Head Start is administered by ACF. The budget provides
    $6.325 billion for Head Start, a $125 million increase over the 2001
    level.
       In 2002, Head Start will serve an estimated 916,000 children.
              Within the overall total of children served, approximately
              55,000 children under age three will participate in the Early
              Head Start component.

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       The President has proposed to reform Head Start and return it to its
    original purpose--education. Head Start programs will be required to
    adopt a proven core curriculum that makes school readiness--pre-reading
    and numeracy--its top priority. The budget includes an Early Reading
    First program within the Department of Education for research-based
    reading programs in existing pre-school programs, including Head Start
    programs. Planning is also underway to move Head Start to the Department
    of Education to reinforce the emphasis on school readiness.

      Compassion and Charitable Giving: The President proposes two
    initiatives to ensure that the Federal Government plays a larger role in
    providing support to charitable organizations. The ``Compassion Capital
    Fund'' will provide start-up capital and operating funds totaling $89
    million in 2002 to qualified charitable organizations that wish to
    expand or emulate model programs. In addition, the fund will support and
    promote research on ``best practices'' among charitable organizations.
    Finally, to encourage States to create state tax credits for
    contributions to designated charities, the budget will propose
    legislation to allow States to use Federal Temporary Assistance to Needy
    Families funds to partially offset revenue losses.
      Maternity Group Homes: The budget also includes $33 million in 2002
    for maternity group homes, which are community-based, adult-supervised
    group homes or apartment clusters for teenage mothers and their
    children. The homes provide safe, stable, nurturing environments for
    teenage mothers and their children who cannot live with their own
    families because of abuse, neglect, or other extenuating circumstances.
      Aging Services Programs: The Administration on Aging (AoA) administers
    information and assistance, home and community-based support services
    for older people and support programs that protect the rights of
    vulnerable, at-risk older people. In 2002, the budget proposes $1.1
    billion for these AoA programs.
       In 2002, AoA will increase the number of meals served under
              the Home-Delivered Meals Program to 183 million, compared to
              176 million meals in 2001.

                                NATIONAL SERVICE

       The Corporation for National and Community Service supports programs
    providing service opportunities nationwide for Americans of all ages and
    backgrounds. The Corporation organizes its programs into three streams
    of service, with various annual performance goals.

      National Senior Service Corps: The Senior Corps links the talents,
    skills, and experiences of more than 500,000 older Americans with
    service opportunities in the areas of education, public safety, health,
    human needs, and the environment. Members serve as Foster Grandparents,
    as Senior Companions, and in the Retired and Senior Volunteers Program
    (RSVP). In 2002, the budget proposes $203 million for the Senior Corps,
    a $14 million increase over 2001 and the first step of the President's
    five-year strategy to increase the annual funding for the Senior Corps
    to the $250 million over five years.
       For 2002, the Foster Grandparents and Senior Companions
              programs plan to serve some 160,000 special-needs youth and
              frail elderly, while RSVP volunteers will serve through more
              than 70,000 local organizations.

      AmeriCorps: The AmeriCorps program helps Americans of all backgrounds
    to serve in local communities through programs sponsored by local and
    national nonprofits. Participants serve full or part-time generally for
    at least a year. For their service, participants become eligible to
    receive education awards that help pay for college, graduate school or
    re-pay student loans.
       For 2002, the AmeriCorps program plans to engage 50,000
              Americans in community service, and provide education awards
              in return for such service.

      Learn and Serve America: This program provides young people with
    opportunities to serve by connecting community service with academic
    learning, personal growth and civic responsibility.
       For 2002, the Learn and Serve program plans to engage more
              than one million students in elementary schools, high schools
              and colleges in service-learning programs.

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                                CULTURAL AGENCIES

      The Smithsonian Institution and Other Cultural Agencies: The
    Smithsonian Institution, the National Gallery of Art, the U.S. Holocaust
    Memorial Museum, the John F. Kennedy Center for the Performing Arts, and
    the Woodrow Wilson International Center for Scholars all have as part of
    their missions the advancement of knowledge and sharing that knowledge
    with the American public. To accomplish its mission, each institution
    must maintain its physical infrastructure and provide access to its
    unique assets. In 2002, each agency will undertake at least two
    management reform activities: addressing the backlog of deferred
    maintenance and enhancing management decisions through improved
    budgetary information.
       The budget requests $494 million for the Smithsonian Institution,
    $80.4 million for the National Gallery of Art, $36 million for the U.S.
    Holocaust Memorial Museum, $34 million for the John F. Kennedy Center
    for the Performing Arts, and $7.8 million for the Woodrow Wilson
    International Center for Scholars.
       To address the backlog of deferred maintenance, each agency will
    prepare a plan that encompasses renovation activities, annual
    maintenance, and backlog maintenance. The plans will also propose a
    strategy for how each agency will take appropriate action. The plans
    will be reviewed by an independent entity as part of a Government-wide
    review of cultural agency buildings and repair and restoration plans for
    museums.
       Each of these agencies is, to some extent, a partnership between the
    Federal Government and the private sector, relying on funding from both
    partners. In order to assess the overall fiscal health and strategy of
    the enterprise, it is necessary to understand not only the Federal
    portion, but also the funding anticipated from private sources.
    Therefore, each agency will work to present its proposed budget for 2003
    in a format such that the components are clearly identifiable, including
    projections for private funding.

      The National Foundation on the Arts and Humanities: In 2002, the
    Administration proposes $105 million for the National Endowment for the
    Arts and $121 million for the National Endowment for the Humanities.
       For the Institute of Museum and Library Services (IMLS), the
    Administration requests $193 million. IMLS awards grants and cooperative
    agreements to assist the Nation's museums and libraries in increasing
    and expanding their services to the public. In 2002, IMLS plans to
    invest in: responding to the educational needs of learners of all ages;
    providing the public with broad access to library and museum services;
    supporting technology to improve library and museum services; serving
    the changing informational and educational needs of families; helping
    museums and libraries expand their roles as centers of community
    engagement; preserving our cultural heritage; and maintaining efficient
    internal operations.

      Commission of Fine Arts: The Commission of Fine Arts supports non-
    profit cultural entities in the Washington, D.C. region, using funds
    appropriated to its National Capital Arts and Cultural Affairs account.
    The budget requests $8.3 million for the Commission of Fine Arts.
    Currently, the support is through formulation-based grants. In 2002, the
    Commission will examine the benefits and consequences of implementing a
    competitive grants program, rather than awarding the funds based on
    formulas, in order to improve the quality of activities supported by
    Federal funds.
      National Capital Planning Commission: The National Capital Planning
    Commission provides overall planning guidance for Federal land and
    buildings in the National Capital Region. The budget requests $7.3
    million for the National Capital Planning Commission. The Planning
    Commission will examine the content and timeline of its Federal Capital
    Improvements Program, which coordinates proposed Federal land and
    building projects, to make it more useful to Federal agencies in their
    capital budgeting process.

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    Tax Expenditures

       The Federal Government helps individuals, families, and employers (on
    behalf of their employees) pay for education and training, and helps
    State and local governments support education and training activities,
    through numerous tax benefits, which under current law will cost an
    estimated $39 billion in 2002, and $215 billion from 2002 to 2006.
       The President proposes four new or expanded tax incentives. To help
    parents offset the increasing costs of education, the annual
    contribution limit for Education Savings Accounts would be increased
    from $500 to $5,000, and families would be allowed to withdraw these
    funds tax-free to pay educational costs from kindergarten through
    college. To encourage parents to save early for college, a full tax
    exemption would be available for all qualified pre-paid tuition and
    savings plans. The President also proposes a new tax deduction for
    teachers to deduct up to $400 annually to defray out-of-pocket classroom
    expenses, including books, school supplies, and professional development
    programs. The President proposes to help local school districts meet
    school construction demands by allowing tax-exempt State private
    activity bonds to be used for school construction and repair.
       The President proposes to extend the Work Opportunity Tax Credit and
    the Welfare-to-Work Tax Credit, letting employers claim a tax credit for
    part of the wages they pay to certain hard-to-employ people who work for
    them for a minimum period. Other current tax expenditures continue under
    the budget, such as tax credits to help families offset the costs of
    higher education. In addition, State and local governments can issue
    tax-exempt debt to finance student loans or build facilities of non-
    profit educational institutions. Interest from certain U.S. Savings
    Bonds is tax-free if the bonds go solely to pay for education. Many
    employers provide education benefits that do not count as income.