[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

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        Table 11-1.  Federal Resources in Support of Education, Training, Employment, and Social Services
                                            (In millions of dollars)
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                                                                               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
----------------------------------------------------------------------------------------------------------------

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                         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

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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

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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

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$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

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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.

[[Page 95]]

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.