[Senate Hearing 108-]
[From the U.S. Government Publishing Office]



 
  DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, AND EDUCATION, AND 
          RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2004

                              ----------                              


                        THURSDAY, MARCH 27, 2003

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 9:04 a.m., in room SD-138, Dirksen 
Senate Office Building, Hon. Arlen Specter (chairman) 
presiding.
    Present: Senators Specter, Stevens, Harkin, Murray, and 
Landrieu.

                        DEPARTMENT OF EDUCATION

                        Office of the Secretary

STATEMENT OF HON. RODERICK PAIGE, SECRETARY OF 
            EDUCATION
ACCOMPANIED BY WILLIAM HANSEN, DEPUTY SECRETARY OF EDUCATION

               OPENING STATEMENT OF SENATOR ARLEN SPECTER

    Senator Specter. Good morning, ladies and gentlemen. The 
Appropriations Subcommittee on Labor, Health, Human Services, 
and Education will now proceed.
    This morning we will hear from the distinguished Secretary 
of Education, the Honorable Rod Paige, who will present the 
administration's budget, which is $53.1 billion, an increase of 
$26 million over the fiscal year 2003 program level. That is an 
increase, obviously, of a minor proportion, less than the 
inflation rate.

                  PROGRAM REDUCTIONS AND ELIMINATIONS

    As we take a look at some of the programs which are being 
cut or eliminated, they pose some real issues for the 
subcommittee--the reduction in GEAR UP, the Rural Education 
program cut by $167 million, which would, I am told, eliminate 
the program; a significant cut of $326 million for vocational 
education programs; and a problem which confronts this 
subcommittee is that the budget for education is joined in our 
overall allocation with health and also labor worker safety, 
which gives us a lot of very hard choices.
    We have advanced the time of this hearing to 9 o'clock, so 
that we could be available to meet with the full committee, 
which is going to hear testimony from the Secretary of Defense 
and the Secretary of Homeland Security at 10:00.
    And I will yield now to the chairman of the full committee, 
Senator Stevens, with your permission, Senator Harkin.

                OPENING STATEMENT OF SENATOR TED STEVENS

    Senator Stevens. Well, thank you, because I do have to 
organize that other hearing with both the Homeland Security and 
Defense. I do have a long statement. I would like to have it 
put in the record.
    Senator Specter. Without objection.

                    ALASKA'S REQUEST FOR FLEXIBILITY

    Senator Stevens. I would like to personally ask the 
Secretary about the problem of responding to Alaska's request 
with regard to flexibility. We have had both the letter that 
was written to you last June and then the meeting with our 
Governor Frank Murkowski about the problem that we have of so 
many small schools in areas where, in many cases, we are unable 
to get teachers, let alone teachers' assistants; and we have 
not received any indication that there is going to be any 
flexibility in dealing with those issues.

                       RURAL EDUCATION IN ALASKA

    I urge you to read my statement. I do not want to hold up 
the committee. But Alaska's native population is 25 percent of 
the enrollment of our schools. The bulk of it is in these small 
areas, very small areas, small villages. And it is just 
impossible for us to follow the bill we support, which is that 
no child should be left behind, from the point of view of 
getting the people that are necessary to carry it out. If we 
cannot hire teachers, how can we hire teachers' assistants and 
people, special people, to qualify those who are not keeping 
up? And in many cases, it is a cultural language problem, where 
the parents refuse to allow the children to study in English.
    We do not have BIA schools. And yet we find that your 
budget has reduced the funding for the two basic programs, the 
Education Equity Act from $31 million to $14 million, and the 
Alaskan-Native Hawaiian Institution Program from $8.2 million 
to $4 million. And you also reduced the funding for the Carol 
White Physical Education Program from its current level to $10 
million. It was $60 million. That meant you put $10 million in 
another program that is not really authorized by Congress.
    Now, Mr. Secretary, some of us have taken on a lot of 
responsibility around here trying to help run the Senate. And I 
do not think that means we deserve any extra consideration, but 
it means we should be treated as a State and as representing a 
State in a way that we can get answers. I would again ask you 
to come up and take a look at the villages and see the 
problems. I do not think your people--your people came up, and 
they did not leave the main cities. They did not go to the 
villages. And our problems are in the villages. Even our small 
Barrow College, the college that is there for native children, 
your people ignored it entirely.

                           prepared statement

    So I hope that by the time this markup comes, Mr. Chairman, 
I am going to ask you to put some severe restrictions on the 
Department of Education with regard to the use of funds unless 
they pay attention to the rural areas that cannot comply with 
this law.
    Thank you very much.
    [The statement follows:]
               Prepared Statement of Senator Ted Stevens
    Thank you Mr. Chairman, and I'm pleased to welcome Secretary Paige 
to our subcommittee.
    Mr. Secretary, I thank you for the leadership you are demonstrating 
in working to ensure that no child in America is left behind in getting 
an education that will prepare him or her to lead a productive life in 
the 21st century.
    Yours is not an easy task, especially in times like these when our 
ability to provide funding for these programs is severely challenged by 
the needs of homeland security and supporting our defense needs.
    I do have some concerns about how your Department is responding to 
our State of Alaska's need for flexibility in meeting the standards of 
the ``No Child Left Behind Act.''
    Last June, Alaska's education commissioner sent you a letter 
requesting flexibility for our State in meeting timelines for 
qualifications of teachers and teacher aides, and testing in english of 
students at early ages.
    To the best of my knowledge, the department has yet to receive a 
written response from the Department to its request.
    In January, Alaska's Governor, Frank Murkowski, met personally with 
you and your senior staff to discuss the issues raised in the June 2002 
letter.
    I understand that the Department has taken the position that it 
will not grant any waivers for the ``No Child Left Behind Act'' 
requirements.
    I also understand that when the Department sent up a team to alaska 
to ``peer review'' its proposed State plan, that the team did not 
choose to accept the State's invitation to visit remote rural 
communities to see just how different conditions in my State are from 
those in the South 48.
    Alaska has 54 school districts, with the largest 5 enrolling 70 
percent of students. Thirty-nine school districts in my State each 
enroll less than 1 percent of the student body.
    My State has a large number of very small schools, each with only a 
handful of teachers. Of 506 schools, 135 schools have fewer than 50 
students and 82 enroll 25 or fewer students.
    Many of these schools are located in villages not served by roads, 
where the only means of transport among villages is via plane or dog 
sled.
    I am concerned about what my State perceives as a lack of 
responsiveness by your Department to these issues.
    Last year I invited you to come to Alaska and see these conditions 
for yourself. Once again, I extend the same invitation.
    I also ask that within the next 30 to 60 days you send appropriate 
members of your staff to my State to visit representative schools in 
rural Alaska and to work with Governor Murkowski's administration to 
arrive at an equitable solution to these issues.
    I'm also disturbed about several decreases and program eliminations 
in your budget proposal.
    Alaska's Native population is almost 25 percent of total enrollment 
in our schools. Our State has assumed the responsibility for educating 
all of its students, and we do not receive any Indian education 
funding, nor do we have BIA schools.
    Alaska's Native children need the resources provided under the 
Alaska Native Education Equity Act to provide the extra help many of 
them need to succeed in school.
    Yet, for the second year in a row, your Department is proposing to 
cut this funding to $14 million from its present fiscal year 2003 level 
of $31 million.
    In the higher education area, your budget proposes to cut funding 
for the Alaska Native--Native Hawaiian Serving Institutions program 
from its present level of $8.234 million to only $4 million.
    You have eliminated entirely funding for the Echo Act, which 
provides funding for cultural enrichment and job training activities 
for our Alaska Native Heritage Center and our Inupiat Heritage Center.
    All of these programs are authorized in law.
    Mr. Secretary, I would like to have you share with this 
subcommittee why your Department persists in slashing funding and even 
eliminating programs which are desperately needed by my State's Native 
people.
    On another topic, the Department has also zeroed out funding for 
the ``Carol M. White Physical Education for Progress'' program--also 
authorized in law--from its current level of $60 million.
    I am particularly disturbed by this, because you and the 
administration have publicly voiced support for physical education 
programs as a means of combating our epidemic of obesity among 
America's children, and your budget proposes a similar initiative to be 
funded at $10 million.
    Mr. Secretary--what's wrong with my pep program--one that is 
supported by most of the advocacy groups supporting increased emphasis 
on physical fitness for kids?
    Mr. Secretary, I'm also concerned over significant cuts to the 
Impact Aid program, which is of great benefit to many schools in 
Alaska, and I hope your staff will work with our subcommittee to 
restore this important source of support to federally-impacted school 
districts.
    I look forward to your testimony Mr. Secretary and to your visiting 
Alaska in the near future.

    Senator Specter. Thank you, Senator Stevens.
    Senator Harkin.

                OPENING STATEMENT OF SENATOR TOM HARKIN

    Senator Harkin. Thank you, Mr. Chairman. I will try to be 
brief. I would also ask that my full statement be made part of 
the record.

                   FISCAL YEAR 2004 BUDGET REDUCTIONS

    I just want to associate myself with the statements of our 
chairman, Senator Specter, in his opening remarks. The 
President's budget would increase Education Department funding 
by $26 million or .05 percent. It does not help schools meet 
the requirements of No Child Left Behind.
    In Iowa, it is estimated 56 percent of all the schools will 
be designated next year as needing improvement under the No 
Child Left Behind law. It will go up even higher in years after 
that. But this budget cuts funding for the No Child Left Behind 
programs by $1.2 billion from this year's level.
    Now I noticed in your opening statement, you point out that 
the President's budget represents more than a 25 percent 
increase since 2001. Well, thanks to Congress. In spite of the 
President's budget, we increased it that much. The President's 
budget did not. We did here in the Congress on a bipartisan 
basis. I just think that the cuts that are made in the budget 
request from this year's level are really unconscionable.
    The $400 million cut for 21st Century Community Learning 
Centers would mean no more after-school services for 550,000 
children. Surely the administration does not think kids will be 
better off alone or home alone or out on the streets than in 
after-school programs in school-based settings.

                      RURAL EDUCATION PROGRAM CUT

    I also want to again repeat for emphasis' sake what the 
chairman said. The $167 million cut in the Rural Education 
program is really not acceptable. That zeroes out the whole 
rural education fund program that we had specifically outlined. 
It is important to my State of Iowa. It has never been a 
partisan program, Republican or Democrat. It was authorized in 
No Child Left Behind. It has broad support here. And yet the 
administration wants to zero it out.

                           prepared statement

    Mr. Secretary, again, I just repeat: This budget is totally 
inadequate. And it is leaving us in a heck of a situation here 
to try to correct it and get the education funding back up. 
Again, as you know, I have personally a high regard for you and 
respect for you. But this budget from the administration is 
just unacceptable.
    Thank you, Mr. Chairman.
    [The statement follows:]
                Prepared Statement of Senator Tom Harkin
    Mr. Secretary, thank you for joining us today for this hearing. I 
believe this is your third appearance before this subcommittee.
    We've had some vigorous debates in the past, and maybe we'll have 
another one today.
    Unfortunately, once again I am disappointed in the President's 
proposed budget for education. Overall, it would increase Education 
Department funding by just $26 million. That's just 0.05 percent--it 
doesn't even cover inflation.
    The President's budget is far from adequate to help schools meet 
the requirements of the No Child Left Behind Act.
    In Iowa, many parents and educators are just now coming to grips 
with the fact that next year, an estimated 56 percent of all the 
schools in the state will be designated as ``needing improvement'' 
under this new law. The numbers will go up even higher in the years 
after that.
    But what does this budget do? It cuts funding for No Child Left 
Behind programs by $1.2 billion from this year's level. That is 
unconscionable.
    I am particularly disturbed by the proposed $400 million cut for 
21st Century Community Learning Centers. This cut would mean no more 
afterschool services for 550,000 children. Does this administration 
really think that children will be better off at home alone or out on 
the streets than in a school-based, afterschool program?
    But beyond the question of funding, I'm frustrated by the 
Administration's disregard for Congressional priorities when it comes 
to programs like rural education, dropout prevention, and dozens of 
others that the President plans to eliminate.
    Take the rural education program, which is particularly important 
for my state of Iowa. This is not a Democratic program or a Republican 
program. It is a bipartisan program authorized in the No Child Left 
Behind Act. It has broad and strong support in Congress. It helps a 
group of students that are particularly at risk of being left behind.
    Members from both parties understand this. And yet the 
Administration wants to zero it out.
    Mr. Secretary, you know I have a great deal of respect for you 
personally. I know you want all children to succeed. But this budget 
will not do the job. I assure you that I and others on this 
subcommittee will do everything we can to increase funding for 
education in the months ahead.
    I look forward to hearing your statement and discussing this more 
in the question-and-answer period.

    Senator Specter. Senator Murray, would you care to make an 
opening comment?

               OPENING STATEMENT OF SENATOR PATTY MURRAY

    Senator Murray. Mr. Chairman, I know we have a short amount 
of time, and we want to hear from the Secretary and have a 
opportunity to ask our questions. So I will submit my statement 
for the record.

          BUDGET CUTS AND NO CHILD LEFT BEHIND ACCOUNTABILITY

    But I want to associate myself with the remarks made by 
both the chairman and the ranking member. I find the 
President's budget to have serious shortfalls. And I think all 
of us who have been home are hearing screaming and yelling from 
our States. Everyone wants to meet the accountability 
requirements of No Child Left Behind, but at this point they 
really believe this is an unfunded mandate that has been passed 
down to them because we have not followed through with the 
resources.

                           prepared statement

    I agree that zeroing out funding for impact aid and rural 
education reductions in everything from after-school programs 
to safe and drug-free schools, not meeting the commitments of 
Title I, all of it just puts our schools at a serious 
disadvantage in trying to meet the accountability requirements 
they really want to meet. They want to work with us to do that. 
So I am very disconcerted by the President's budget. And I have 
some questions, and I will ask them during the round.
    Thank you very much.
    [The statement follows:]
               Prepared Statement of Senator Patty Murray
    Thank you Mr. Chairman for giving us this opportunity to discuss 
the Administration's fiscal year 2004 budget with Secretary Paige. And 
thank you Secretary Paige for being here today.
    I'd like to remind everyone of the context in which we sit here 
today. The Administration has sent us a budget that proposes a $1.2 
billion cut in funding for the No Child Left Behind Act, while funding 
a $1.4 trillion tax cut. This budget request--with its meager 
investment in funding for the No Child Left Behind Act--fails our 
children and fails their future. It fails the very promise that the 
President made to students when he signed the No Child Left Behind Act 
just two years ago.
    Leaving no child behind is a noble goal, and with bipartisan 
support, we passed an education reform bill to meet that goal. But this 
budget does not come close to meeting the needs of our students or 
keeping the promises of that legislation. When we passed the No Child 
Left Behind Act, we passed it based on two commitments. First, we would 
hold schools accountable for their progress, and second, we would 
provide schools with the resources to meet those new requirements.
    We're certainly keeping the first part of that bargain. But this 
budget suggests that the Administration does not intend to keep the 
second part of their promise. Why is this Administration willing to 
keep the commitment to identify schools in need of improvement, but 
unwilling to keep the commitment to provide the resources for those 
schools to improve?
    Let me highlight a few of the ways this budget shortchanges 
America's students. This budget could cut funds for after school 
programs for more than 500,000 latch key children. That's on top of the 
more than 6 million latch key children we're already not serving. It 
leaves 6 million of our most disadvantaged students behind by not 
providing the Title I funding they need. Among other things, it also 
falls short on funding for teacher quality and class size reduction, 
for English language acquisition, for Impact Aid for Safe and Drug Free 
Schools, and for rural education.
    At a time when we are demanding more than ever from our students, 
teachers and schools, this budget does not invest more in them. At the 
Department of Education you are no doubt getting a bird's eye view of 
how hard our states are struggling to implement this law. Everywhere I 
go in my home state of Washington I hear from educators who believe in 
the goals of the No Child Left Behind Act. They're willing to work as 
hard as they have to do to make it work. But they can't do that without 
resources. That's why the bill promised significant increases in 
resources.
    Leaving no child behind means making serious investments in things 
like Title, IDEA, smaller classes, teacher quality and after school 
programs. These are the type of real reforms that will make a 
difference for our students, and these are the reforms that are 
underfunded or cut in President Bush's proposal.

    Senator Specter. Senator Landrieu, would you care to make 
an opening statement?

               OPENING STATEMENT OF SENATOR MARY LANDRIEU

    Senator Landrieu. Yes, I do. Thank you.
    And welcome, Mr. Secretary.
    Secretary Paige. Thank you.

               BUDGET REDUCTIONS AND NO CHILD LEFT BEHIND

    Senator Landrieu. I look forward to continuing to work with 
you as we fashion a stronger accountability program for our 
Nation's schools. But just a note: I associate myself with the 
remarks previously made. I want to go on record as saying that 
the President's budget is wholly inadequate to support the 
commitment that he made personally to the schools in Louisiana 
and to the schools throughout our Nation. He reneged, in my 
opinion, on his promise to fund the Leave No Child Behind Act.
    I think it is the height of hypocrisy for him to open his 
budget with the quote ``The time for excuse-making has come to 
an end.'' The President himself continues to make excuses to 
this Congress about why he cannot find the money to meet the 
commitment that he made specifically to Title I and to Special 
Education.
    There was no, to my knowledge, misunderstanding in these 
negotiations. I was in the room when the negotiations were 
made. It was very, very clear in the negotiations made on Leave 
No Child Behind that Congress would adopt the testing 
requirements and the President would step forward with the 
funding. Well, he reneged on this promise. He continues to make 
excuses and I think it is a shame.

                    LOUISIANA ACCOUNTABILITY SYSTEM

    Second, I want to say that there are five States in this 
Union, Louisiana being one of them, that have an extraordinary 
accountability system that was in place long before the one 
that we designed went into effect. My superintendents and my 
principals have been operating this system with extremely good 
results. I am told the current Federal law is in some ways in 
conflict with their efforts.
    Louisiana is not asking, Mr. Chairman, for lower standards, 
we are asking for using common sense. I know the Secretary is 
aware of Louisiana's situation and I would like you to 
personally examine our unique situation and try to respond as 
soon as possible.
    [TThe information follows:]
     Louisiana State Accountability Plan Under No Child Left Behind
    Louisiana's plan for an accountability system, which both builds 
upon the State's existing accountability system and responds to the No 
Child Left Behind (NCLB) Act requirements, has been approved by the 
U.S. Department of Education. Louisiana is the 11th State to gain 
approval of its State accountability plan.
    Included below is the April 17, 2003 U.S. Department of Education 
Press Release announcing the approval of Louisiana's plan. Information 
on the No Child Left Behind Act may be found at the No Child Left 
Behind website: /http://www.nclb.gov/. A copy of the Louisiana State 
Accountability Plan, along with other approved State plans, may be 
found at the Ed website: http://www.ed.gov/offices/OESE/CFP/csas/
index.html.
paige approves louisiana state accountability plan under no child left 
                                 behind
    Baton Rouge, La.--Louisiana has completed work on a plan for a 
strong state accountability system aligned with the No Child Left 
Behind Act (NCLB) of 2001, U.S. Secretary of Education Rod Paige 
announced today.
    Paige made the announcement today during a visit to the state 
capitol where he was joined by Governor Mike Foster and State 
Superintendent Cecil Picard.
     ``Louisiana has built upon its existing state accountability 
system to produce an even stronger and more cohesive plan to benefit 
every child in the state,'' said Paige. ``I congratulate Superintendent 
Picard and Governor Foster for this step forward. Louisiana has a 
distinguished history of education reform and cutting-edge work in 
assessment and accountability. With these improved accountability 
provisions and an established record of reform, Louisiana is firmly on 
the path to ensuring that no child is left behind.''
    Under NCLB's strong accountability provisions, states must describe 
how they will close the achievement gap and make sure all students, 
including disadvantaged students, achieve academic proficiency. In 
addition, they must produce annual state and school district report 
cards that inform parents and communities about state and school 
progress. Schools that do not make progress must provide supplemental 
services such as free tutoring or after-school assistance, take 
corrective actions and--if still not making adequate yearly progress 
after five years--must make dramatic changes in the way they operate.
    Louisiana is the 11th state to gain approval. Other states whose 
plans have been approved include Colorado, Delaware, Indiana, Kansas, 
Maryland, Massachusetts, Mississippi, New York, Ohio and West Virginia.
    No Child Left Behind is the landmark education reform law designed 
to change the culture of America's schools by closing the achievement 
gap, offering more flexibility, giving parents more options and 
teaching students, based on what works. Foremost among the four key 
principles is an insistence on stronger accountability for results. To 
achieve that, states must develop strong accountability systems or 
improve those already in place, establish high standards and hold all 
children to the same standards. They also must provide instruction by 
highly qualified teachers that results in steady progress and, 
ultimately, proficiency for all students by the 2013-14 school year.
    Secretary Paige recently asserted that the new law aims to correct 
the ``previous and pervasive separate and unequal education systems 
that taught only some students well while the rest--mostly poor and 
mostly minority--floundered or flunked out.''
    All states submitted draft accountability plans to the U.S. 
Department of Education by the Jan. 31 deadline. Following an initial 
review and technical assistance, if needed, the next step is on-site 
peer review of each state's proposed accountability plan. Teams of 
three peer reviewers--independent, nonfederal education policy, reform 
or statistical experts--conduct each peer review. Following a review of 
the team's consensus report, the department provides feedback to the 
state and works to resolve any outstanding issues. Ultimately, Paige 
approves the state plan, as he did today.
    To date, 47 states and the District of Columbia and Puerto Rico 
have had peer reviews of their accountability plans. Additionally, the 
senior staff of the Department of Education has finished meeting with 
education officials from the states to discuss the specifics of their 
plans and the unique challenges and issues in each state.
    Despite all the priorities competing for our tax dollars, President 
Bush's budget boosts federal education funding to $53.1 billion--an $11 
billion increase since the president took office. Louisiana alone will 
receive more than $914 million, including $385 million to implement 
NCLB. If the president's budget is approved, federal education funding 
for Louisiana will have gone up $166 million since he took office.
    Louisiana's plan will be posted online in the coming days at: 
http://www.ed.gov/offices/OESE/CFP/csas/index.html.
    For more information about the No Child Left Behind Act, go to 
www.nochildleftbehind.gov.

                 STATE ACCOUNTABILITY PLANS UNDER NCLB

    Senator Specter. Senator Landrieu, could you conclude your 
opening statement?
    Senator Landrieu. Yes, I will.
    The reason, Mr. Chairman, I raise this is because this 
trend could be quite discouraging to the other States. If the 
five States that are moving forward so aggressively are 
discouraged from their efforts, then I fear that all the other 
States will be discouraged and we will be defeating our 
purpose.

                           prepared statement

    I would end my remarks by saying: The time for excuses is 
over. The President and his administration should be the ones 
that stop making excuses and be a good example for everyone 
else.
    Thank you.
    [The statement follows:]
              Prepared Statement of Senator Mary Landrieu
    Thank you, Mr. Chairman. Mr. Secretary, thank you for being here 
this morning. As evidenced by my work in passing the No Child Left 
Behind Act, I believe wholeheartedly in this law's founding principles: 
accountability for results, flexibility and local control and the 
targeting of resources to the school districts, who because of a lack 
of local revenues, are most in need of federal assistance. The State of 
Louisiana is proud to be a leader in the effort to hold schools and 
districts accountable for performance. In fact, a nationally renowned 
publication, Education Week, recently singled out our statewide 
accountability system as being amongst the best in the Nation. I remain 
hopeful that accommodations can be made by your department to allow 
this success to continue.
    I would like to begin my comments here this morning with a quote 
from the speech that President Bush delivered on January 8, 2003, the 
day he signed the NCLB Act into law. He said, ``the time for excuse 
making has come to an end.'' The President is right, we can no longer 
allow excuses to stand in the way of all of our children receiving a 
high quality education. The future of our National economy is dependent 
on our ability to replace excuses with results. But what I think may be 
lost in the translation, is that the time for excuse making has come to 
an end for us all. It is no longer appropriate for the federal 
government to excuse themselves from their responsibility to America's 
public school system.
    Mr. Secretary, as you know there were a lot of things written into 
to law by the No Child Left Behind Act. I would like to call your 
attention to Section 1002 of Title I of this bill. It is here that we 
made the commitment to increase Title I by $2.5 billion a year for the 
next six years. In addition, in Section 4206, of this bill we carefully 
laid out the funding for the 21st Century After School program. In both 
cases, the amount of the increases were the result of a carefully 
constructed compromise between the White House and members of Congress 
who felt that reform and resources for reform must go hand in hand. 
Despite this, the President's budget only calls for an $650 million 
increase over last year for Title I and perhaps even more shocking, 
calls for a reduction of $400 million in after school. By doing this, 
the President, in essence, excuses himself from the requirements of 
these sections of the NCLB act while at the same time insisting that 
States, locals and schools be bound to all other requirements of this 
bill.
    In addition, the President insisted that all new programs, 
particularly in reading, be research based programs and then excuses 
himself from the federal commitment made to provide the funding to 
promote this research and best practices through programs such as the 
Comprehensive Regional Assistance Centers and the Eisenhower Regional 
Math and Science Consortia. In my state of Louisiana, these programs 
are crucial to our ability to translate research into effective 
practice. The rationale behind these cuts, I am told, is that States 
are allowed to use their limited Title I dollars to fund research and 
best practices at the local level and it is the view of this 
Administration that the states are better suited than Universities and 
Regional Academic Consortia to engage in this practice. Not only does 
this policy add to the burden on states to choose between the many 
needs of limited Title I funds but it also wrongly assumes that states 
are better equipped to perform this function.
    The most disturbing excuse of all, however, is that these smaller 
than promised increases and cuts are the consequence of a deficit 
budget and the costs of the war. True, these efforts will require the 
majority of our attention and resources. Yet, while the President is 
saying that his recommended increase are all our current fiscal status 
will allow he is at the same time able to find the resources to fund 
$100 million mentoring program, $75 million school choice demonstration 
program and a $2,500 tuition tax credit for children who transfer to a 
higher performing schools. While each of these programs may be 
worthwhile, I can't help but wonder if it is appropriate for us to be 
spending our precious resources to give a few students the option to 
attend a better school instead of funding the reform necessary to give 
all students the opportunity to succeed.
    Mr. Secretary, there are a lot of good things in this budget, but 
there are also a lot of excuses. I hope that we can work together to 
make the targeted investments necessary to provide the high quality 
education our children need and deserve.

    Senator Specter. It is not customary to have anybody but 
the chairman and ranking make an opening statement. But in view 
of the limited number of people here, I try to extend the 
courtesy. But they have to be brief in the context where we are 
having another hearing at 10 o'clock.
    Mr. Secretary, the floor is yours.

                SUMMARY STATEMENT OF HON. RODERICK PAIGE

    Secretary Paige. I will be very brief, Mr. Chairman. And 
thank you so much for this opportunity to come. Ladies and 
gentlemen, thank you. I have just a brief statement here.
    In total, the President's budget demonstrates his ongoing 
substantial commitment to supporting educational excellence and 
achievement. More importantly, it reaffirms that the Federal 
support for education is about more than money. It is about 
reform through high standards and through leadership and 
through the use of proven education methods. Only through the 
combination of these resources, with effective leadership 
exemplified in the President's No Child Left Behind initiative, 
can America's children and adults benefit.

                           prepared statement

    I will end this by asking that you recognize that the 
President's 2004 budget request is somewhat unusual in that it 
was developed before the Congress completed its work on the 
2003 appropriations. The request for the Department of 
Education reflects the administration's relative priorities at 
that time within the overall 2004 discretionary totals. We are 
prepared to work with the Congress to adjust some of these 
priorities in light of the 2003 appropriations, as long as the 
overall discretionary appropriations do not exceed the total of 
the President's budget.
    Mr. Chairman, with that abbreviated statement in vieu of 
the time, I end my statement.
    [The statement follows:]
               Prepared Statement of Hon. Roderick Paige
    Mr. Chairman and Members of the Committee: Thank you for this 
opportunity to testify on behalf of President Bush's 2004 Budget for 
the Department of Education. I am proud to appear before you today, 
discussing the many ways that President Bush's 2004 Budget and other 
initiatives support educational opportunity for American children and 
adults.
    As you know, earlier this year we celebrated the first anniversary 
of the No Child Left Behind Act of 2001, which President Bush signed 
into law on January 8, 2002. State officials, administrators, and 
teachers across the country now are working hard to strengthen their 
accountability systems, identify research-based strategies for 
improving student achievement, and offer new choices to parents whose 
children attend low-performing schools.
    The President's budget seeks $53.1 billion for Department of 
Education programs in 2004. That represents more than a 25 percent 
increase since 2001, and a 130 percent increase in Federal education 
funding since fiscal year 1996. Key requests for the cornerstones of 
the Federal role in education include:
  --$12.4 billion for Title I, a 41 percent increase since the passage 
        of No Child Left Behind;
  --$9.5 billion for IDEA grants to States, a 50 percent increase since 
        he was elected President; and
  --$12.7 billion for Pell grants, for a record 4.9 million students.
    In addition to discretionary spending, the President's budget 
provides significant mandatory support for education. The President 
seeks additional loan forgiveness for teachers in high-demand 
disciplines. He also seeks changes in the tax code to improve 
education. As you will recall, the President backs the CRAYOLA credit 
for teachers, allowing them a $400 above-the-line deduction for out-of-
pocket expenses. He also continues to support the changes in last 
year's tax law that help students and families save for higher 
education.
    In total, the President's budget demonstrates his ongoing, 
substantial commitment to supporting educational excellence and 
achievement. More importantly, it reaffirms that Federal support for 
education is about more than money. It is about reform through high 
standards, leadership, and the use of proven educational methods. Only 
through the combination of these resources with the effective 
leadership exemplified in the President's No Child Left Behind 
initiative can American children and adults benefit.
    Before I go into more detail about specific areas of our request, I 
want to recognize that the President's 2004 Budget request is somewhat 
unusual, in that it was developed before the Congress completed its 
work on the 2003 appropriation. The request for the Department of 
Education reflected the Administration's relative priorities--at the 
time--within the overall 2004 discretionary total. We are prepared to 
work with the Congress to adjust some of these priorities, in light of 
the 2003 appropriation, as long as overall discretionary appropriations 
do not exceed the total in the President's budget.
                   implementing no child left behind
    As President Bush said on the first anniversary of No Child Left 
Behind, ``We can say that the work of reform is well begun.'' The 
Department of Education has approved the accountability plans of five 
States, and all remaining States submitted their plans on schedule at 
the end of January. We will be working with these States over the next 
few months to refine and complete those plans, and I am confident that 
all States will be on board when the new school year begins next fall. 
Now that the fiscal year 2003 appropriations bill has been completed 
and signed, the Department will be able to provide States with more 
reliable estimates of the Federal funding that will be available for 
the coming school year.
    The 2004 Budget request will help ensure that this work does not 
falter, but continues until, in the President's words, ``every public 
school in America is a place of high expectations and a place of 
achievement.''
    The request would provide $12.4 billion for Title I Grants to Local 
Educational Agencies to help States and school districts turn around 
low-performing schools, improve teacher quality, and increase choices 
for parents. This level represents a $3.6 billion increase, or 41 
percent, in Title I Grants to LEAs funding since the passage of No 
Child Left Behind. The budget also provides $390 million for State 
Assessment Grants to help States develop and implement--by the 2005-
2006 school year--the annual reading and math assessments in grades 3 
through 8 that are integral to the strong State accountability systems 
required by the new law.
    We are seeking $1.05 billion for Reading First State Grants and 
$100 million for Early Reading First, two programs that require State 
and local educational agencies that receive funds to capitalize on 
recent research findings by supporting proven methods for improving the 
reading skills of young children. A $185 million request for Research, 
Development, and Dissemination would build on this research base and 
fund new efforts to develop proven, research-based instruction in other 
subjects like mathematics.
                        more choices for parents
    No Child Left Behind provides unprecedented choice for parents of 
children in low-performing schools. To support and enhance the law's 
reforms, the budget provides $75 million for a new Choice Incentive 
Fund to increase the capacity of State and local districts to provide 
parents, particularly low-income parents, more options for obtaining a 
quality education for students in low-performing schools; $25 million 
for Voluntary Public School Choice grants that would encourage States 
and school districts to establish or expand statewide and interdistrict 
public school choice programs; and $100 million to expand the new 
credit enhancement program that will help charter schools pay for 
school facilities.
                   improving america's teaching corps
    The President believes that well-prepared teachers are essential to 
ensuring that all children reach high State standards. That is why in 
his budget he calls for over $4.5 billion to support our Nation's 
teachers. Included in this total is $2.85 billion for Title II Teacher 
Quality State Grants; more than $500 million in loan forgiveness and 
teacher tax reductions; an estimated $814 million in funds supporting 
improvement through Title I, Educational Technology State Grants, and 
Title III professional development grants; $25 million for Troops to 
Teachers; and $190 million for the high-need areas of special education 
and American history.
            special education and vocational rehabilitation
    President Bush has demonstrated a strong commitment to improving 
educational opportunities for children with disabilities, both by 
requesting significant annual increases for Special Education Grants to 
States and in his determination to apply the same rigorous 
accountability demanded by No Child Left Behind to the upcoming 
reauthorization of the Individuals with Disabilities Education Act 
(IDEA). Over the next year, we will be working with Congress to renew 
IDEA to strengthen accountability for results, simplify paperwork and 
increase flexibility to do what works based on sound research, and 
increase choice and meaningful involvement for parents.
    The President also recognizes, however, that educating students 
with disabilities is a special challenge for States, school districts, 
and schools. This is why his budget would provide $9.5 billion for 
Special Education Grants to States, the highest level of Federal 
educational support ever for children with disabilities, and a $3.2 
billion or 50 percent increase in Grants to States since the President 
took office.
    The 2004 budget also supports the reform of the Federal 
Government's overlapping training and employment programs, first 
proposed in last year's budget, for individuals with physical or mental 
disabilities. A $2.7 billion request for Vocational Rehabilitation (VR) 
State Grants would help State VR agencies increase the participation of 
those individuals in the labor force while at the same time reduce 
duplication and complexity in the operation of Federal training 
programs.
                     vocational and adult education
    The Administration also will be proposing fundamental changes to 
vocational and adult education programs during their upcoming 
reauthorizations. For Vocational Education, this means greater emphasis 
on student outcomes and stronger links with high school programs, 
including activities supported by the ESEA Title I program. Our request 
would provide $1 billion for a new Secondary and Technical Education 
State Grants program that would create a coordinated high school and 
technical education improvement program in place of the current 
Vocational Education State Grants program. The new program would build 
on No Child Left Behind by ensuring that States and LEAs focus more 
intensively on improving student outcomes, such as academic 
achievement, and that students are being taught the necessary skills to 
make successful transitions from high school to college and college to 
the workforce.
    A $584 million request for Adult Basic and Literacy Education State 
Grants would support reauthorization proposals that would strengthen 
accountability, require State standards for adult literacy activities 
leading to high school-level proficiency, and train teachers in the use 
of research-validated instructional practices.
     postsecondary education--grant, loan and work-study assistance
    Finally, our 2004 request would support more than $62 billion in 
grant, loan, and work-study assistance to an estimated 9.2 million 
postsecondary students and their families. The cornerstone of this 
assistance is a $12.7 billion request for the Pell Grant program. Since 
taking office, President Bush has requested an unprecedented $4.7 
billion in additional funding for this critical program. The 2004 
request will enable almost 4.9 million students to receive a Pell 
Grant, an increase of 1 million students or 25 percent since the 
President took office 2 years ago.
    Our postsecondary student loan programs also continue to make 
available needed assistance to millions of students and their families. 
For 2004, new student loans provided under the Federal Family Education 
Loans and Federal Direct Student Loans programs will grow from $44.3 
billion to $47.6 billion, an increase of $3.3 billion or 7.4 percent. 
And these students are borrowing at the most favorable interest rates 
in the history of the student loan programs--just 4 percent. At the 
same time, student loan default rates remain low, reflecting both 
improved management practices and flexible repayment plans that can 
accommodate student needs both before and after graduation.
 loan forgiveness for math, science and special education teachers in 
                         low-income communities
    Also, the President is again asking Congress to approve his plan to 
provide additional loan forgiveness for highly qualified math, science, 
and special education teachers who work in low-income communities. The 
President's proposal will provide up to $17,500 in loan forgiveness for 
teachers in these three fields who work for 5 consecutive years in 
schools that serve high poverty student populations. This is more than 
three times the $5,000 in loan forgiveness now allowed for other 
qualified elementary and secondary teachers serving low-income 
communities. This proposal will help our neediest schools recruit and 
retain highly qualified teachers in fields that have critical teacher 
shortages, as well as fields that face fierce competition from the 
private sector.
             tax-related assistance in paying college costs
    In addition to grants and loans, postsecondary students and their 
families benefit from a variety of tax-related assistance in paying 
college costs passed as part of President Bush's tax proposal in 2001. 
Under the new tax law, families are able to make tax-free withdrawals 
from pre-paid qualified State tuition savings plans, and can contribute 
up to $2,000 to Education IRAs. Plus, students are eligible for up to 
$4,000 in above-the-line deductions for higher education expenses. The 
tax bill also eliminated the 60-month limitation on student loan 
interest deductions and increased the income levels of individuals able 
to claim the deduction. This change makes this tax benefit simpler to 
administer and increases the affordability of student loan repayment. 
Additionally, the bill extended the income exclusion for employer-
provided educational assistance and the benefit of the exclusion to 
graduate level courses. Combined with other tax benefits already on the 
books, over $10 billion this year in tax breaks will be provided to 
working families who are struggling to meet the skyrocketing cost of 
college and to students who are repaying their student loans. The 
President's 2004 Budget would make the important benefits provided in 
the 2001 tax law permanent.
   historically black colleges and universities and hispanic-serving 
                              institutions
    Our $224 million request for the Strengthening Historically Black 
Colleges and Universities program demonstrates the President's 
commitment to help close achievement and attainment gaps between 
minority students and other students by assisting institutions that 
enroll a large proportion of minority and disadvantaged students. 
Similarly, a $94 million request for Hispanic-serving Institutions 
would help increase academic achievement, high school graduation, 
postsecondary participation, and life-long learning among Hispanic 
Americans.
    Overall, the President's 2004 higher education budget proposal 
further demonstrates his commitment to invest in the future of 
America's neediest students at all levels of education. The substantial 
funding increase we are seeking will help millions of needy families 
pay for higher education and give millions of students the opportunity 
to pursue their educational goals and make the most of their potential.
                  departmental management--clean audit
    While No Child Left Behind reforms are asking States and schools to 
improve their accountability in the use of education funds, we have 
tried to set an example by improving our own management. Just last 
month, the Department of Education received its first clean audit since 
1997 and only the second in the history of the Department.
             president's management agenda--``green light''
    I am also proud to report that the Office of Management and Budget 
has given the Department its seal of approval by giving us a ``green 
light'' for our progress in improving management on all items in the 
President's Management Agenda. This is especially rewarding since we 
had to work our way up from the bottom on each of the initiatives, 
ranging from financial management to electronic government to linking 
program performance and budgeting.
                     program assessment rating tool
    Also, in the 2004 Budget, the Administration launched the Program 
Assessment Rating Tool (PART) process to rate programs according to 
performance. The President's goal was to rate 20 percent of all Federal 
programs in the first year. In the 2004 Budget, the Department of 
Education rated 18 programs, covering $28 billion, or more than half of 
its appropriation. One finding was that many programs lacked 
performance information. We will work on that in the future, because 
the PART scores tend to fluctuate based on the strength of data about 
program success. The PART is a new process and we look forward to 
increasing our ability to base budget decisions on program 
effectiveness.
    I believe we have a strong budget for education in fiscal year 
2004, one that puts significant resources where they can do the most to 
help improve the quality of educational opportunities at all levels of 
the American education system. I will be happy to take any questions 
you may have.

                            RURAL EDUCATION

    Senator Specter. Well, Mr. Secretary, thank you for those 
comments. The critical aspect of what you said is that you will 
work with us so long as it is within the total figure. And that 
is the problem, as to how to stretch the dollars to reach so 
many of these programs which will have to be cut.
    Where there is such a major challenge with rural education, 
how can we justify the elimination of the entire program with a 
$167 million cut? Rural education is important not only to 
Iowa, the ranking member's State, or Kansas, but also my home 
State, Pennsylvania, which has more people living in rural 
Pennsylvania, 2.5 million, than any State in the Union. How can 
we go back to justify that to our constituents?
    Secretary Paige. Yes. Mr. Chairman, let me respond to that 
by using Alaska as an example, but the same thing will be true 
for many of the other rural States. And we are learning a lot 
about rural States, and we are moving now to have discussions 
specifically about that topic, about rural education.
    The various representatives from these States have had a 
chance to sit down with us, and we with them, to learn about 
their idiosyncratic issues. We have learned an awful lot about 
these States. And we are continuing to learn how we can be 
helpful to the States. They have enlisted the help of very 
capable accountability experts and are making noble efforts to 
include all students in their accountability efforts.
    Alaska has proposed a comprehensive accountability plan 
designed to hold all schools, even small schools, accountable. 
And what they are finding is a Department of Education that is 
willing to serve as a partner with them to help overcome some 
of these difficulties. And the same thing is true with 
Nebraska.
    Senator Specter. Mr. Secretary, how does accountability 
bear on eliminating the funding for a program? Mr. Secretary, 
would you give us a written answer there? We have a very 
limited amount of time.
    Secretary Paige. Absolutely. I look forward to that, 
because I think there are answers. And I would like very much 
to have a chance to----
    Senator Specter. If you would provide it in writing, I 
would appreciate it.
    Secretary Paige. Absolutely. We will do that.
    [The information follows:]
                Elimination of Rural Education Programs
    We believe that providing funds through the large formula grant 
programs, coupled with flexibility in using the funds, is the most 
effective way to help rural districts to ensure that their students 
meet challenging State academic content and student achievement 
standards. No Child Left Behind (NCLB) is intended to encourage a more 
comprehensive education reform strategy responsive to specific local 
needs. We believe that school districts will identify problem areas, 
adopt scientifically based improvement strategies, and use the 
flexibility of the NCLB Act to combine Federal, State, and local 
resources to support those strategies. In this context, the important 
question is not whether a specific program receives a particular level 
of funding, but whether local officials make effective use of the total 
resources available.
    In addition, recognizing the different needs of small, rural 
districts, NCLB provided those districts with greater flexibility in 
their use of Federal formula funds than is available to other 
districts. For example, a district eligible for the Small, Rural School 
Achievement program can consolidate its formula allocations from three 
different programs (Improving Teacher Quality State Grants, Educational 
Technology State Grants, State Grants for Innovative Programs, and Safe 
and Drug-Free Schools and Communities State Grants) to carry out 
activities authorized by any of the consolidated programs. In addition, 
rural districts are able to use the consolidated funds for activities 
authorized under Title I, Part A program, the Title III (Language 
Instruction for Limited English Proficient and Immigrant Students) 
program, and 21st Century Community Learning Centers.
    Unlike districts that transfer funds under the State and Local 
Transferability authority, the rural flexibility authority enables 
eligible districts to carry out activities under the various 
authorities without having to meet separate program requirements. We 
know from discussions with States that eligible districts are taking 
advantage of this increased flexibility.
    Rural districts not eligible for the rural flexibility authority 
may use the flexibility allowed by the new State and Local 
Transferability Act, which allows a district not identified for 
improvement under Title I to transfer up to 50 percent of its 
allocation from four different formula programs to any of those 
programs or to use those funds for Title I, Part A purposes.

                                GEAR UP

    Senator Specter. The GEAR UP Program is also cut. That is 
the other end of the spectrum, moving from rural education to 
inner city. The GEAR UP Program has been advanced by 
Congressman Chaka Fattah on the House side, and this 
subcommittee has added enormous funds to it. GEAR UP seeks to 
intervene with seventh graders who come from disadvantaged 
backgrounds, to provide mentoring and close monitoring of 
individuals to try to work with them through the next 6 years 
of their education before college and then go on to college.
    It seems to me that that is exactly the kind of a program 
we ought to be emphasizing, where those inner city youth are 
most at risk. Now should we not be adding funds to programs 
like that instead of cutting?

                          MENTORING INITIATIVE

    Secretary Paige. Yes. And that is why the President's 
mentoring initiative is such an important part of our request. 
What is included is, I think, $300 million over 3 years for a 
mentoring program specifically for middle school students, 
where the need is greatest, and to recruit mentors from all 
across the spectrum of professional people who love children 
and are willing to work with them. It is one of the most 
exciting mentoring programs that we have seen anyplace.
    So mentoring is a great concept. In fact, we believe that 
the most important determinant of a child's success or failure 
is the quality of the adult relationships in their lives. And 
mentoring fills that gap. So, far from not thinking it is a 
good idea, we think it is a superb idea.

                  FLEXIBILITY OF NO CHILD LEFT BEHIND

    Senator Specter. Mr. Secretary, let me move to one more 
question before my time expires, because I am going to observe 
the time, I will expect other members to do so as well.
    Yesterday there were some representatives here, in what 
they call the Creative Coalition, emphasizing education. And 
the group had a number of high-powered performers. One of them 
was Ron Reagan, Jr., another of whom was Fran Drescher, who 
made a very impassioned plea for funding for the arts in 
schools. And she was almost poetic in her characterization of 
the issue, trying to get young people to love themselves 
instead of loathing themselves, trying to be productive instead 
of destructive.
    The question is: How can we structure funds from the 
Department of Education to encourage or perhaps--well, 
``mandate'' is a word we do not like to use in the Federal 
Government, telling people what to do in schools--but to see to 
it that there is more creative work on this very critical 
aspect of the educational process, which is significantly 
ignored?
    Secretary Paige. Yes. Mr. Chairman, I think many people 
miss the power of the creativity that is unleashed by the 
flexibility in the bill, the No Child Left Behind Act. It 
provides an opportunity for people at the scene, the local 
level, who choose to focus on arts or focus on other 
activities, or to be able to use funding flexibly to support 
that. The amount of funding overall is up. The flexible funding 
actually is a reallocation of funds, and putting it in 
localities so that it can be used by those who are on the scene 
who can make the judgments on where these funds would be best 
used.
    There are places across our Nation that have high interest 
in the arts. There are places that have interests in other 
priorities. Each of these things can be met by the flexibility 
in the bill. So if we just judge, make a judgment, that there 
is not a category with arts in it and a large number attached 
to it, we fail to focus on the fact that that possibility 
exists through election by the people who are at the local 
level and who are best able to make those judgments.

             IMPORTANCE OF READING AND READING INSTRUCTION

    Senator Specter. Is art as important as reading?
    Secretary Paige. I think reading is a fundamental activity. 
I think it is the one upon which all other learning is based. 
And if a child fails to read and fails to read early, all of 
the other activities, I think, are made much more difficult. 
And that is why the President has focused so heavily on 
reading. About 50 percent of our special education students are 
there because they cannot read or have never been taught to 
read properly. If we can conquer the reading problem 
substantially, we will reduce the other problems.
    Senator Specter. Senator Harkin.
    Senator Harkin. Thank you, Mr. Chairman.

                    FISCAL YEAR 2004 BUDGET REQUEST

    Mr. Secretary, in your prepared statement and also in your 
verbal statement here before us this morning--let me get back 
to it and read it. You said that the President's 2004 budget 
request is ``somewhat unusual in that it was developed before 
the Congress completed its work on the 2003 appropriation. The 
request for the Department of Education reflected the 
administration's relative priorities, at the time, within the 
overall 2004 discretionary total.''
    Secretary Paige. Yes.
    Senator Harkin. You said that. It is in your statement.
    Secretary Paige. Absolutely.
    Senator Harkin. You also said, and I made note of this, 
``We are prepared to work with Congress to adjust some of these 
priorities''----
    Secretary Paige. Yes.
    Senator Harkin [continuing]. ``In light of the 2003 
appropriation''----
    Secretary Paige. yes.
    Senator Harkin [continuing]. ``As long as overall 
discretionary appropriations do not exceed the total in the 
President's budget.''
    Secretary Paige. Yes.
    Senator Harkin. Well, in plain English, what you are saying 
is that the President would support cutting funding for some 
other Cabinet agencies to increase funding for education. Is 
that right?

                     TOTAL EDUCATION BUDGET REQUEST

    Secretary Paige. I think it would be best to characterize 
my thoughts about that in this fashion: That given all of the 
other competing priorities for funds, the appropriate funds to 
support education would be the $53.1 billion that the President 
has recommended.

           ADJUSTMENTS TO FISCAL YEAR 2004 EDUCATION REQUEST

    Senator Harkin. Oh. Oh, so you are not saying that you want 
any--wait a minute. Let me go back to this statement. You said 
that ``we would work to adjust these priorities.'' You do not 
mean any more money. You say--what you have requested in the 
budget is the maximum. That is what you just said just now.
    Secretary Paige. Yes. What we request in the budget is our 
view of the appropriate funding level for education. Some of 
the categories inside the request might be higher, viewed as 
having a higher priority than others. Those kinds of 
adjustments are entirely possible.
    Senator Harkin. Oh, I see. Let me get this straight. What 
you are saying, Mr. Secretary, is that when you are talking 
about adjusting some of these priorities, you are talking about 
within that amount that you submitted.
    Secretary Paige. Yes.
    Senator Harkin. You are not saying that you could get any 
more than that.
    Secretary Paige. Yes. I am saying that it is our view----
    Senator Harkin. That is not what your written statement 
said. Your written statement said the request for the DOE----
    Secretary Paige. Yes.
    Senator Harkin [continuing]. ``Reflected the 
administration's relative priorities, at the time, within the 
overall 2004 discretionary total.''
    Secretary Paige. Yes.
    Senator Harkin. And you said, ``We are prepared to work 
with Congress to adjust some of these priorities, as long as 
overall discretionary appropriations,'' that is, total----
    Secretary Paige. Yes.
    Senator Harkin [continuing]. ``Do not exceed the total in 
the President's budget.'' So what that says to me is that the 
President, and you, are saying that you are willing to increase 
funding for the Department of Education as long as you cut it 
someplace else. Is that right, or that is not right?
    Secretary Paige. Yes, that is exactly right. That is what 
we are saying.
    Senator Harkin. You are--oh. So this is different than what 
you just said about 2 minutes ago.
    Secretary Paige. Okay.
    Senator Harkin. Let us see if we can speak to each other 
here.
    Secretary Paige. Okay. Let us try that.
    Senator Harkin. Let us try to speak to each other.
    Secretary Paige. Okay.
    Senator Harkin. Are you saying that the President would be 
willing to cut some funding in other Cabinet agencies to 
increase funding for education?
    Secretary Paige. No.
    We are speaking about the $53.1 billion for education and 
adjusting the priorities within it.
    Senator Harkin. Oh, I see.
    Secretary Paige. Yes.
    Senator Harkin. The President will not support more than 
$53.1 billion.
    Secretary Paige. I am not speaking for the President with 
regard to that statement. The statement that I am making is 
that within the $53.1 billion in our budget, it is our view of 
the appropriate spending level for education. And inside that 
$53.1 billion, adjustments----
    Senator Harkin. Well, that is not what your statement says.
    Secretary Paige. Give me just a minute. Give me just a 
minute.
    Senator Harkin. That is not what your statement says. But 
we have to figure this thing out. I am just trying to get a 
handle on whether or not we might have some hope here. Is hope 
alive or not?
    Secretary Paige. Okay. Let me try it again. And I have some 
more counsel here.

         ADJUSTMENTS TO THE FISCAL YEAR 2004 EDUCATION REQUEST

    Within the overall President's budget, we can work with 
some adjustments in education. It might go higher than $53.1 
billion for education, as long as the overall spending in the 
budget does not increase.
    Senator Harkin. Then back to my point: If that is the case, 
then there has to be some cuts in other Cabinet agencies.
    Secretary Paige. That is true.
    Senator Harkin. And the President would be willing to 
support that.
    Secretary Paige. That is right.
    Senator Harkin. Do we have any suggestions where the 
President might be willing to cut other departments, so that we 
can have more money for education?
    Secretary Paige. We do not have those suggestions 
presently.
    Senator Harkin. Could we expect to get something like that 
from the administration?
    Secretary Paige. I am sure we can.
    Senator Harkin. Well, this committee, I am sure, Mr. 
Chairman, would love to have some guidance and some suggestions 
from the administration, since we appropriate money for all of 
the Cabinet agencies--not our subcommittee here, but the full 
Appropriations Committee--about where we might cut some of the 
other departments to get money for education. To me, that is 
encouraging. Thank you.
    Secretary Paige. Mr. Harkin, if I could, the Office of 
Management and Budget has been working with us. And I think the 
same way in which we worked with you on the development of the 
2003 bill, when the education budget went up and there were 
other priorities, but it stayed within the President's overall 
amount. During the appropriations process, the administration 
will be happy to work with Congress as long as the overall 
President's number remains the same.
    Senator Harkin. Thank you.
    Thank you, Mr. Chairman.
    Senator Specter. Senator Murray.
    Senator Murray. Well, thank you, Mr. Chairman.
    I assume from that conversation then that we can expect to 
see a revised budget request from the Department of Education.
    Secretary Paige. No. We are saying that we are willing to 
work with the Congress and talk to you about those issues.
    Senator Murray. But you are not going to give us a formal 
request of any kind so that we know how the President wants to 
set these priorities?
    Secretary Paige. That is correct.

                FUNDING FOR TEACHER QUALITY IMPROVEMENT

    Senator Murray. Well, okay. That makes it difficult for us, 
as we try and manage this. But let me ask you about one of the 
biggest challenges that I am hearing from the people in my 
State. They are struggling to meet the requirements to have all 
teachers and most paraprofessionals highly qualified by 2005, 
which feels like it is fast approaching.
    Do you not agree that fulfilling that kind of mandate will 
require significant investments in training and recruiting and 
retaining and testing teachers in order to meet that 
requirement that we have put forward, that all teachers and 
most professionals have to be highly qualified by 2005?
    Secretary Paige. Yes, I do agree it will take significant 
resources. And that is why the $4.5 billion in the President's 
budget is there.
    Senator Murray. But what I see in the President's budget is 
your request of $2.85 billion for Title II teacher quality, 
which is what the mandate was under the bill. Last year we 
actually funded, in 2003, $2.95 million. So your request is 
below what we funded in 2003. Now I know that you said that you 
had to prepare this before we did the 2003 appropriations.
    Secretary Paige. Yes.
    Senator Murray. And despite the conversation you just had 
with Senator Harkin, given that you are not going to send us a 
revised budget, your budget actually calls for $2.85 billion--
which is less than we just appropriated for this year for 
meeting this requirement. I do not see how our schools are 
going to meet the requirements to have all our teachers and 
professionals highly trained when we are providing them less 
money to do it.
    Secretary Paige. When we discussed Federal funding for 
teacher quality, preparation, and recruiting and retention, we 
have to look at the full gamut of support available in the 
budget for that purpose. And when you do that, it will total 
$4.5 billion, not just the $2.85 billion.
    Mr. Hansen. And if I might add, Senator Murray, that is an 
increase even over and beyond the $4.25 billion that is in the 
current 2003 bill. If you look at our proposals on teacher loan 
forgiveness, our troops-to-teachers, transition to teaching, 
other proposals, and total what is provided for in our Title I 
program with the 5 percent set-aside for teacher training----
    Senator Murray. With all due respect, let me just tell you 
that when we worked on the No Child Left Behind, the 
authorization for this requirement and this money were under 
the Teacher Quality State Grants. What you are now saying to us 
is that we are not going to pay attention to the language of 
the bill and the Teacher Quality State Grants. We are going to 
pull money from all these other things that we do, and say that 
that counts.
    Well, that is--you know, the schools are already using 
those funds for specific things. We have added a new 
requirement, a new accountability requirement, on top of that. 
And now you are just saying: Use the money you use for 
something else. That is what it sounds like to me that you are 
saying to our schools.
    Secretary Paige. No. We are not saying that. What we are 
saying is: All of the dollars in the budget for teacher quality 
improvement are not captured under that line item that includes 
the $2.85 billion. There are other places.
    Senator Murray. When we wrote the No Child Left Behind, the 
teacher quality money was under the Teacher Quality State 
Grants. That is what we expected to work with the 
administration in good faith to increase the funding for.
    Mr. Chairman, I know we do not have much time. I have a 
number of other questions I will submit for the record.

                   PUBLIC SCHOOL CHOICE REQUIREMENTS

    But I do have one question in particular that I wanted to 
ask about, because a lot of our schools, in trying to implement 
the public school choice requirements, are following your 
guidance. And your guidance says, and I am going to quote it, 
``Lack of capacity and health and safety concerns, including 
overcrowding problems, do not excuse an LEA from meeting the 
Title I public school choice requirement.''
    Well, I know you are an educator. And you cannot believe 
that it makes sense to transfer students to schools that are 
overcrowded even to the point of causing health and safety 
concerns. So I am very concerned about that language in your 
guidance, and I want you to clarify it for us.
    Secretary Paige. Our language in the guidance was as 
flexible as we could make it under the language in the law. And 
so what we were doing there was trying to provide as much 
flexibility as the law permits us to provide in the capacity 
issue. We are fully aware of the problems that capacity 
presents to teaching and learning.

              TITLE IX ADVISORY COMMISSION RECOMMENDATIONS

    Senator Murray. Well, I am deeply concerned about that. And 
in my last 30 seconds, I want to just jump to one quick 
question on Title IX. It is another issue that I have dealt 
with your office on.
    You said recently that you would consider only the advisory 
commission recommendations on Title IX that are unanimous. And 
two members, at least two members, of the commission have 
repudiated their support for a number of those so-called 
unanimous recommendations in their minority report. And I 
wanted to find out from you this morning if you will consider 
those recommendations as unanimous or if you will respect the 
dissenting views on that question.
    Secretary Paige. The two persons that you refer to voted 
for the ones that we agree are unanimous. They were a party to 
that and had more participation and discussion than anyone 
there. They were part of----
    Senator Murray. Well, Mr. Secretary, I have talked----
    Secretary Paige. They were part of the unanimous vote. That 
is why it is unanimous.
    Senator Murray. Well, I have talked extensively to them. 
And they believe that the way the report was written was not 
the way that their discussions were going. They have submitted 
a minority report saying that they have dissenting views on 
that and do not consider them unanimous. I hope that you take a 
look at that, because there is a lot of disagreement on that.
    Secretary Paige. Senator, the other 13 members of the 
commission thought that their conduct with respect to that was 
very inappropriate. They voted for those issues that were 
unanimous.
    Senator Murray. Mr. Secretary, again, with all due respect, 
I hope that you look at the language of the minority report. 
They are very specific in their concerns about how those were 
worded and what the final outcome of that was.
    Secretary Paige. The commissioners were advised even before 
they had their first meeting that we wanted them to reach 
agreement, consensus, and that those were the issues that were 
going to be included, and that we are going to consider. Even 
before they had their first meeting, they were advised about 
that. And so they were fully aware of what the ground rules 
were and what the rules of engagement were before the meeting, 
before the report was prepared.
    Senator Murray. Will you look at the minority report?
    Secretary Paige. I am going to look at the issues that were 
voted on unanimously.
    Mr. Hansen. Mrs. Murray, I think it is important to note, 
too, that Cynthia Cooper, who is the co-chair of the 
commission, takes great issue with the representation of the 
other two commissioners--and I think actually the transcript 
speaks very clearly as well that everybody knew exactly what 
they were voting for. And I think Cynthia Cooper spelled it out 
very clearly in the press conference during the----
    Secretary Paige. And not only Cynthia Cooper, the other 
members of the commission as well.
    Senator Murray. I hope we will have further discussion.
    Thank you, Mr. Chairman.
    Senator Specter. Senator Landrieu.

                       FEDERAL ROLE IN EDUCATION

    Senator Landrieu. Mr. Secretary, do you agree that one of 
the roles of the Federal Government is to try to close the 
opportunity gap between the affluent districts in this Nation 
and the disadvantaged districts?
    Surely, as your background suggests, you are aware that the 
local school systems are funded, primarily through property 
taxes; not in every case, but in most cases throughout the 
Nation. In those school districts where there is a strong 
middle class or affluent area, property taxes are paid and 
therefore schools are fairly well funded. In other areas that 
are poorer and more disadvantaged, where the property is not as 
valuable, there is by contrast less money that goes into the 
schools.
    In my view one of the roles of the Federal Government is to 
try to close that gap and help those children that come from 
less affluent neighborhoods to actually have equal opportunity 
to succeed. Do you agree?
    Secretary Paige. Yes, especially if you mean by that the 
equity. Our role is to--we have two roles--to ensure equity and 
to promote excellence. And I would consider what you said 
ensuring equity.

                          TAX CREDIT PROPOSALS

    Senator Landrieu. Well, I am very encouraged by that, 
because I think that is absolutely what we should be doing. But 
I am perplexed and confused then about the President's 
proposals. Two initiatives that I see outlined in this budget 
from your Department and the President are to expand the 
Coverdell tax credit and then to give an additional tax credit 
for up to $5,000 in tuition costs. In order to get the tax 
credit, you would have to be able to have paid $5,000 in 
tuition, correct?
    How do those two programs, one that you are seeking to 
expand and one that is brand new, meet the objectives that you 
just stated?
    Secretary Paige. Well, we believe that one of our greatest 
failings in education is tying a child to a school that is not 
serving them well. And so the President is attempting here, and 
I agree fully, to provide options for parents, so that if a 
school is not serving a child well, that child has other 
options. And this is a vehicle to promote that possibility.
    Senator Landrieu. Well, let us discuss that a minute. 
Explain to me how a child that comes from a family that cannot 
afford even $1,000 for tuition would be helped by these two 
programs. Go ahead and explain that to me, if you would.
    Mr. Hansen. Well, the----
    Senator Landrieu. In other words how does the tax credit 
work for them?
    Mr. Hansen. Senator Landrieu, the tax credit, it needs to 
be kept in mind, that it is an above-the-line tax credit. So it 
is specifically targeted to disadvantaged families. And I think 
it is----
    Senator Landrieu. Excuse me. Could you start again?
    Mr. Hansen. Sure. It is an above-the-line tax credit for 
families. It is also important to note that the average 
tuition----
    Senator Landrieu. Excuse me. Hold on. Explain what you mean 
by ``above the line''?
    Mr. Hansen. It basically means that they are eligible for 
it no matter what the rest of their tax is. If they do not owe 
any tax, they still are eligible for the tax credit.
    Senator Landrieu. That is true, but in order to get it, do 
they not have to first pay the tuition?
    Mr. Hansen. That is correct. And that is also----
    Senator Landrieu. So a parent has to have the $5,000, or up 
to half of $5,000, to pay for tuition before they can either 
claim the credit. Explain to me then how the people in this 
country who have two children and who, let us say, make the 
minimum wage can afford $10,000 in tuition they must pay to be 
eligible for this credit.
    Try to explain that to me how someone pays rent, buys food 
and clothes, and then pays $10,000 tuition, what benefit are 
you are offering them.
    Secretary Paige. There are--go ahead.
    Senator Landrieu. Go ahead, Mr. Secretary. That would be 
good.
    Secretary Paige. There clearly would be many people where 
this would be a burden. And they would have to find other 
sources. This category would meet some of the needs for some of 
the parents. There are other parents who would have to look to 
other sources. And there are other sources. This is just one of 
many mechanisms that are designed to provide options for 
parents.
    Senator Landrieu. Well, I will finalize this point with my 
37 seconds left. What you just stated, goes in direct 
contradiction to your goal, which according to your testimony 
is to help those parents that need the help the most, because 
the gap is so great. The programs that you are proposing in 
this budget go against that principle.
    I am going to do everything I can to oppose these two 
programs and instead try to support the public schools, as well 
as choice for parents, real choice that means something to 
them.
    Thank you.

                FISCAL YEAR EDUCATION BUDGET PRIORITIES

    Mr. Hansen. Senator Landrieu, if I could, I think it is 
important to note that the top three priorities in our budget 
were a billion-dollar increase in the Title I program, with all 
money in the targeted program; the billion-dollar increase in 
the Special Education program, which serves the most 
educationally disadvantaged children in our country. It also 
included a $1.9 billion----
    Senator Landrieu. I----
    Mr. Hansen [continuing]. Let me finish, please--a $1.9 
billion increase for our Pell Grant program. Ninty percent of 
those dollars go to families making less than $40,000. So all 
of our programs are geared to help those who need it the most. 
This tax credit, if people do not take it, it does not go to 
wealthy families. It is opportunities for those families that--
--
    Senator Landrieu. I did not say it went to wealthy 
families. Mr. Chairman, I want to get this on the record. I did 
not say it went to wealthy families. I do not have a problem 
helping wealthy families. My problem is when resources are 
limited we should help the poor families first, the middle-
income families second, and the wealthy families third. Your 
budget does not reflect that principle. I disagree with it.
    Mr. Hansen. Our budget does do that.

                      IMPORTANCE OF ARTS EDUCATION

    Senator Specter. Mr. Secretary, my concluding question to 
you was about focusing on the arts. And reading, obviously, is 
the critical issue on education of young people. And 
mathematics is not far behind and so many of the substantive 
issues, history and civics, health courses. But I would 
appreciate it if you would direct some special attention to 
what might be done to stimulate the arts.
    I started to tell you about this group of The Creative 
Coalition. A young woman, Fran Drescher, and young Ronald 
Reagan, and others make such a compelling case. And the 
emotionalism and self-worth that comes from theater and art are 
so important that I would like you to take a special look at 
it.
    Now I am not quite sure how we get there, because we do not 
direct the local boards as to what they do. But there are ways 
that we can encourage it, perhaps.
    Secretary Paige. Senator, we have a special interest in the 
arts. So we would be happy and pleased to do that.
    Senator Specter. Okay. We would appreciate that.

               ATHLETIC OPPORTUNITIES FOR WOMEN AND GIRLS

    The issue on Title IX with respect to athletic 
opportunities has been of great concern. I appreciate your 
focus on athletic opportunities for women and girls. It has 
been really amazing to see the women compete in basketball. In 
a bygone decade, that would have been thought to be 
unobtainable. So much of the funds are directed to men's sports 
because they are big moneymakers, big television, NCAA, et 
cetera.
    But with what we have now seen as to the competitive 
capabilities of young women and what a vital part it plays in 
the educational process and the development of women and girls, 
I think that is a line which we have to take really very 
positive steps to promote.
    Let me turn to a question, Mr. Secretary.
    Oh, do you want to make a comment?
    Senator Harkin, sotto voce--in fact, not sotto voce. 
Everybody in the room heard it.
    He has a great article titled: ``Strike Up the Band, keep 
music in schools.'' And in light of our limited time, we will 
just make this a part of the record. We will get a copy for you 
to read, Mr. Secretary.
    Secretary Paige. Thank you.
    Senator Harkin. I would like to have you read this. It was 
written by the former CEO of Meredith Publishing Company. It is 
a great article about the arts and school music. It is really a 
great article, in light of what the chairman was just saying.
    [The information follows:]

             [From the Des Moines Register, March 25, 2003]

       Strike up the Band (and Keep Music in Schools); Iowa View

                          (By James A. Autry)

    I have just returned from a magical mystery tour in which I 
witnessed a transformation from the ordinary to the sublime. The thing 
is, this happens all the time but not many of us get to see it from 
beginning to end. You have to be in the right place at the right time. 
I was.
    But I get ahead of myself.
    First, let me begin with a confession: On Saturday night, March 15, 
I let go of my adult inhibitions in the midst of 149 teenagers, and 
screamed myself hoarse.
    It happened when the chairman of the Heritage Music Festival at 
Disneyland announced that the top festival award was being presented to 
Des Moines Roosevelt High School. I jumped to my feet, pumped my hands 
in the air and yelled my fool head off.
    I was as caught up in the moment, as excited and exhilarated as 
those band, orchestra and chamber choir students who had traveled to 
Anaheim on March 12 for four days of fun and festival, and who were 
taking home the top honors.
    Later, I wondered if anyone would notice; if the media would bother 
with a musical triumph when there's so much to be written and shown 
about the triumphant world of sports.
    I wondered how many people know there are more kids involved in 
public school music than in all the sports put together.
    And I thought about the proposed cuts in music programs, and the 
havoc that may cause for bands, orchestras, choirs, and choruses as 
they have cuts and changes in teaching staff, plus diminished resources 
all around.
    I am not attacking the administrators or the school board. I am 
painfully aware of their difficult choices, and the so-called ``Leave 
No Child Behind Act'' puts no emphasis on art and music programs.
    My purpose is simply to assert that life is about more than the 
basic ``3 Rs.'' What students learn from music and art programs can't 
be taught anywhere else.
    As a consultant and author, I work with companies that stress 
teamwork and cross-functional projects. I tell managers to stop using 
the metaphor of sports teams, with their superstars and bench-warmers, 
and think of a band or orchestra in which every player has an important 
role, in which the greatest accomplishment is the ensemble.
    Isn't this what good organizations are about, what a democracy is 
about, what communities are about?
    There is no better education--repeat, no better education--for 
becoming a productive member of society than participation in a musical 
ensemble. In a band or orchestra or chorus, no child is ever left 
behind.
    And I know. Our son Ronald, now a senior at Roosevelt, has autism. 
He's not the most accomplished musician in the band, but he always 
gives it his best effort. And the band has been a defining activity for 
him. I can't imagine how his high school experience would have been 
without band.
    While I think of the band as having put a little magic in Ronald's 
life, that's not the magic or the mystery I started writing about. Just 
as the awards ceremony was not the high point of the Anaheim trip.
    That came earlier in the day when the symphonic band, chamber 
orchestra and chamber choir performed. My description: an utterly 
mystical experience.
    How else would you explain the transformation of typical teenagers 
into divinely performing musical ensembles? Picture busloads of young 
people looking and acting as young people do, dressed in a strangely 
conformist style (boys in baggy jeans, the waistline relocated 
somewhere around the the mid-to-lower buttocks, girls with low-cut 
jeans and bare bellies) and talking with one another in a language 
hardly intelligible to aging adults.
    Then picture those same kids in tuxedos and long, black evening 
dresses, intensely attentive and concentrating fully on their 
instruments (or voices) and the directions of the conductor, and 
producing music of a quality unimaginable from high school musicians 
back when I was one.
    It is a mystical transformation brought about by two factors:
    One is the transcendent quality of music that inspires kids to 
reach beyond themselves to perform at their peak.
    The key factor: teachers. I sit in awe of these educators--in this 
case, Treg Marcellus, Joseph Rich, Sandra Tatge and John Wallag--who 
devote their lives to bringing forth exquisite music from young people 
who, when they begin, can't imagine the possibilities of what beauty 
they can create together.
    I wish everyone in Des Moines could have the experience I've just 
had. They would be proud of the performances and the awards, but they'd 
be equally proud of how the students behaved and represented our city 
and state.
    I can't imagine school activities that produce more positive, 
lifelong outcomes than these music programs. They deserve everything we 
can do to preserve them.

    Senator Specter. Thank you, Senator Harkin, for insisting 
on not interceding.
    Senator Harkin and I always have a good time, in addition 
to being very cooperative in how we handle these issues.

               CAMPUS CRIME AND CLERY ACT ADMINISTRATION

    Now, Mr. Secretary, on the subject of campus crime, we had 
a particularly heinous rape/murder in Pennsylvania which 
inspired the parents of the victim to come forward on a 
crusade, which has been so well focused on trying to inform 
parents and students who are going to college campuses what 
kind of risks they might expect. And the Department prior to 
your administration had not done a very good job in 
administering these campus crime informational requirements.
    We have provided you with $750,000 to provide institutions 
of higher education with a handbook on how to comply with the 
Clery Act, I would be interested to know how you intend to use 
it. Do you have a plan now, or if not, you can submit it in 
writing, if you have not focused on it? What activist programs 
do you have to see to it that there is enforcement of the 
provisions in law related to campus crime?
    Secretary Paige. Well, we share your view about safety. The 
Department is developing a handbook on compliance with the 
Clery Act. We intend to use the funds that you have made 
available in strict compliance with congressional intent. The 
handbook will focus on explaining programs and regulations in 
clear language to school officials. We are consulting with 
interested organizations, including Security on Campus and 
participating institutions. The handbook will be distributed to 
all higher education institutions immediately after it is 
completed.
    We have some other activities going on as well, including a 
data collection system to facilitate the submission of campus 
crime data from postsecondary institutions--this is for the 
third consecutive year--a help desk to provide institutions 
with technical assistance, and a website to provide easy access 
to campus security legislation and regulations and data and 
resources.
    We have an enormous array of activities that are underway 
to promote campus safety. We are very grateful for the $750,000 
that was provided, and we are going to make sure that it is 
used in strict compliance with your intent.
    Senator Specter. Well, thank you very much, Mr. Secretary.

                           PREPARED STATEMENT

    Senator Thad Cochran's prepared statement will be made part 
of the record at this point in the hearing.
    [The statement follows:]
               Prepared Statement of Senator Thad Cochran
    Mr. Chairman, it is a pleasure to have Dr. Paige serving as 
Secretary of Education. He is doing a fine job, and I look forward to 
working with him on the Department's budget for fiscal year 2004.
    One program I need to mention, because nearly every school in 
Mississippi is dependent upon its funding, is the Title I program for 
the education of disadvantaged students. I'm pleased to see an increase 
of $1 Billion in this program. It is always a challenge, though, to get 
a share of any increase directed to Mississippi. That is a result of 
the formula distribution and also the child counts that are used by the 
department to determine eligible students. I hope this year we can come 
to a resolution that is fair to my state.
    I am interested in, and some of the vocational and technical 
education leaders in my state are concerned about, the Department's 
proposal for eliminating the Perkins Vocational and Technical Education 
Program. These are programs that have been very successful. The 
Mississippi Department of Education and the vocational and technical 
education centers have contacted me, and met with my staff. They do not 
understand how a new formula based program will be beneficial to them. 
So, as we work through the appropriations process, and the 
reauthorization process, I hope you will consult with the people 
currently running these programs.
    There are also several small, but critically important education 
programs in which I have a deep interest.
    I'm happy that this year, some are included in the Department's 
Budget request. I commend the Department, and you, Mr. Secretary, for 
noticing in particular the benefits of and recommending continued 
funding for the Ready to Learn Television Program, which provides 
educational television shows to nearly every child in the United 
States.
    I congratulate you on placing a priority on civic education by 
recommending funding for the Education for Democracy program. It 
sponsors the We The People Program here in the United States and the 
Cooperative Education Exchange Program in almost 30 emerging 
democracies abroad.
    There are however, a number of programs listed in the budget 
proposal under the heading: ``Program Terminations.'' I know we have 
difficult decisions to make, but I want you to know about a few of 
those in which I continue to have an interest.
    I understand that the Department plans to streamline as many 
programs as possible, but school leaders in my state advise me that 
even with the advantages of flexibility, there is still a need for 
schools and districts to have direct access to grant making programs 
and others that are best served through a single source.
    The Arts in Education program funds a number of high quality 
programs that use a small federal contribution to leverage other state 
and private funding. Most successful has been the relatively new grants 
to schools to provide arts education in their curriculum. The 
Department of Education published a collection of studies in 1999 and 
another one last year, both of which gave us clear evidence fo the 
value of arts in schools. The variety of advantages are amazing. These 
include decreased drop out rates, increased academic performance, 
better interpersonal skills, and higher sensitivity to social issues.
    Another Arts in Education program is VSA Arts. This is popular 
program which supports a national network that assures accessible arts 
programming for children and youth with disabilities. Each year 
approximately 4.5 million individuals participate in VSA Arts programs.
    The National Writing Project is another program that has not only 
proven its worth, but I am advised that it consistently receives the 
highest rating from its official federal review. The fact is, that the 
modest federal funds that have been directed to this program ($14 
Million in 2003) are leveraged as much as 7 times in some areas. The 
National Writing Project does not dictate a certain method of teaching 
writing, but it provides a highly trained network of teachers who share 
proven methods with other teachers. Teachers are energized by this 
training and become better teachers.
    The grant program for foreign languages in schools is another one 
that I truly hope we can continue to fund. Mr. Secretary, during the 
celebration of International Education Week, you stated a commitment to 
the elements of what you called a ``world-class'' education. Foreign 
languages taught early and throughout a child's life is a corner stone 
to that goal. Today we have national security issues that beg a 
population better prepared to conduct themselves with an international 
awareness. The experts told us at a hearing in 2000 that college is 
simply too late. We need to start sooner.
    There are other programs of importance, such as those which deal 
with gifted education, physical education, and school counseling. All 
of these need our attention.
    I hope that during this appropriations process, we can again come 
to some compromise and continue to fund the programs that have national 
significance and have proven to be successful.
    I know that you have the best interests of our children at heart, 
and I look forward to working with you.

                       CHAIRMAN'S CLOSING REMARKS

    Senator Specter. There are many more subjects. We had a 
pretty good attendance with the five Senators here this morning 
on an extraordinarily busy morning at 9 o'clock.
    We are going to be proceeding to a full committee hearing, 
as I said earlier, with Secretary Rumsfeld and Secretary Ridge. 
And with the customary roller skates around here, I have to go 
to a judiciary committee meeting for a few minutes to try to 
confirm Justice Priscilla Owen.
    But we thank you for what you are doing. We appreciate your 
coming from Houston, from a very activist program in education 
and taking on a very big responsibility. There are many other 
questions of concern to my State, not only as to the rural 
education but also as to big city education. We will be having 
a dialogue with you further and I look forward to an 
opportunity to invite you to Pennsylvania.
    You have been very gracious with your time in the past. And 
we look forward to working with you, Mr. Secretary.

                      SECRETARY'S CLOSING REMARKS

    Secretary Paige. We thank you so much for your leadership. 
And we invite you and the members of the committee, 
subcommittee, to contact us if there is any discussion you want 
to have around any of these issues.
    Senator Specter. Thank you very much.
    Secretary Paige. Thank you.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Specter. There will be some additional questions 
which will be submitted for your response in the record.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
              Questions Submitted by Senator Arlen Specter
                       title i school improvement
    Question. Does the fiscal year 2004 budget request provide 
sufficient funds to pay the costs of corrective actions--public school 
choice, supplemental services, school restructuring, etc.--which must 
be taken with respect to schools which fail to meet adequate yearly 
progress standards for 2 or more consecutive years?
    Answer. State and local educational agencies have been required to 
take corrective actions to improve Title I schools in need of 
improvement since the 1994 reauthorization. We believe that the 
President's $12.4 billion 2004 request for Title I, an increase of $3.6 
billion or 41 percent over the amount provided for the final year of 
the previous law, is more than adequate to help States and school 
districts provide the new educational options and carry out the 
improvement measures required by the NCLB Act.
    In particular, by statute, 2004 school improvement funding would 
double from 2 percent to 4 percent of the overall Title I Grants to 
LEAs funding. The President's request is large enough to ensure that 
this increased school improvement funding comes from new funding and 
not from existing Title I allocations.
    Question. How many schools have been affected by this requirement 
during the 2002-2003 school year?
    Answer. We do not yet have precise figures from the States, but a 
survey conducted last summer, combined with data from earlier years, 
suggests that roughly 8,000 schools were identified for school 
improvement in the 2002-2003 school year.
                title i choice and supplemental services
    Question. Have any localities received waivers from the requirement 
to provide supplemental services?
    Answer. Such waivers may be approved by State educational agencies 
only if there are no available service providers and the school 
district is itself unable to provide services. We do not yet have any 
data on how many waivers have been granted by the States.
    Question. What evidence is there that third-party supplemental 
services providers will be any more successful than their regular 
public schools in providing Title I services?
    Answer. While we do not yet know how successful supplemental 
educational services will be in raising student achievement, we do 
know, first, that students are eligible for such services only when 
their schools have failed, for at least three years, to meet adequate 
yearly progress requirements. In other words, we know the schools are 
not getting the job done. And, second, we know that there are service 
providers that have a strong record of improving student achievement, 
as demonstrated in part by the willingness of parents to pay for their 
services.
    I also should clarify that supplemental educational services, as 
the name suggests, are not a replacement for regular Title I services, 
but additional instruction available to those students with the 
greatest need for improvement. Students receiving supplemental 
educational services can continue to benefit from the regular Title I 
program offered in their schools.
    Finally, service providers are subject to monitoring by State 
educational agencies and must meet performance objectives included in 
the agreements negotiated with parents. If a particular provider 
consistently fails to meet its objectives for improving student 
achievement, few parents are likely to request its services and it will 
likely lose the State-approved status required for participation in the 
program.
parental notification of public school choice and supplemental services 
                                options
    Question. Are parents of affected pupils eligible for public school 
choice and supplemental services options being informed of these 
options in a timely and effective manner?
    Answer. In general, I believe most school districts have made a 
good-faith effort to notify parents of their children's eligibility for 
both public school choice and supplemental educational services. Some 
districts experienced difficulty in this area during the current school 
year, in part because these are new requirements and districts are 
still developing appropriate procedures and processes for complying 
with those requirements. In addition, some States did not post their 
lists of approved providers until well into the second semester of the 
school year, making it difficult for local educational agencies to make 
the services available on a timely basis.
    I am encouraged by anecdotal reports in the media of districts 
responding to complaints by parents by improving notification and 
increasing the range of options available to parents. I expect this 
improvement will continue as both districts and parents become more 
familiar comfortable with the choice and supplemental service 
requirements. In any case, this is an issue we will follow closely over 
the coming months and years.
    Question. Are the parents typically being offered a substantial 
range of choices?
    Answer. We do not yet have sufficient information to describe a 
``typical'' public school choice program under the NCLB Act. Based on 
reports in the media, the range of choices offered has varied 
considerably, depending on such factors as the district's understanding 
of the choice requirements and the number of eligible schools within 
the district. I think this is pretty much what we expected, 
particularly during the first year of implementation.
           no child left behind ``report card'' requirements
    Question. What are the costs to States and local educational 
agencies of meeting the report card requirements of the No Child Left 
Behind Act?
    Answer. These costs will vary considerably based on such factors as 
the size of the State and district involved and the number and type of 
schools that must be included in State and local report cards. It is 
important to remember, however, that report cards are not new to the 
Elementary and Secondary Education Act, but were required under the 
previous authorization. The NCLB Act did add some requirements for 
additional information in the annual report cards, but this reflects 
only incremental cost increases for an existing activity.
    Question. How are most States and local educational agencies 
disseminating their report cards?
    Answer. Information about State and local plans and procedures for 
disseminating their annual report cards was included in the 
accountability plan workbooks that each State submitted in January 2003 
as part of the consolidated application process. The Department is 
currently subjecting the plans outlined in these workbooks to peer 
review, and will have more data on report cards when the peer review 
process is completed early this summer.
    Question. If they are disseminated primarily through the Internet, 
how will parents and other individuals without home computers and 
Internet access obtain them?
    Answer. We do not yet have any data suggesting that the Internet 
will be the primary means of disseminating annual report cards. 
However, the Title I regulations require that States and school 
districts communicate all school improvement information, including 
annual report cards, directly to parents through such means as regular 
mail, and not just through broader means such as posting report cards 
on the Internet.
    Question. May Elementary and Secondary Education Act Title I-A 
funds be used to develop or disseminate report cards?
    Answer. Yes, States and school districts may use Title I, Part A 
funds to meet the requirements of Title I, Part A of the ESEA, which 
include annual report cards.
    Question. How many States and local educational agencies are 
currently meeting the No Child Left Behind Act requirements to publish 
report cards on their performance?
    Answer. The Department currently does not have complete data on the 
number of States and school districts meeting the report card 
requirements of the NCLB Act. Many States and school districts were 
producing and disseminating report cards under the previous law, but 
the NCLB Act required additional information that will likely require 
modification to these pre-NCLB report cards. The Department will have 
more data on State and local efforts to meet the new report card 
requirements once it completes the process of peer reviewing State 
accountability plans early this summer.
     evaluation of 21st century community learning centers program
    Question. The fiscal year 2004 budget proposes $600 million for 
21st Century Community Learning Centers, a reduction of $393.5 million 
from the amount provided in last year's bill. These centers help 
communities provide extended learning opportunities for students--
including after school programs--and related services for their 
families, such as family literacy. The stated reason for the proposed 
reduction is that the Department's recent national evaluation of 
centers revealed shortcomings in the program, in particular related to 
the academic performance of students attending such programs.
    Mr. Secretary, given that the findings from the national evaluation 
that are your basis for reducing the program are not nationally 
representative and are only first year findings, is it appropriate to 
cut this program so significantly, especially given the fact that other 
studies have found academic improvement and other benefits from such 
programs?
    Answer. The rapid growth in funding for the program over the past 
few years occurred almost entirely in the context of an increased 
emphasis on improving student achievement. For example, the 2001 
request submitted by the previous Administration, which proposed to 
more than double the appropriation to $1 billion, was justified by the 
perceived need to give students in all low-performing schools the 
opportunity to attend after-school programs to help improve their 
academic achievement. There was a specific link between the size of the 
request and the academic benefits expected from that request. In this 
context, our proposal to scale back the program, on the basis of 
evidence that it is not achieving those expected benefits, seems 
entirely appropriate. Preliminary findings from the current evaluation 
of 21st Century Community Learning Centers, conducted by Mathematica 
Policy Research, Inc., indicate that the centers funded in the 
program's first three years, on average, provided academic content of 
limited intensity and had limited influence on academic performance, no 
influence on feelings of safety, and no positive impact on student 
delinquent behavior. Attendance in the programs was found to be low (on 
average, less than two days per week, even though centers were open, on 
average, four to five days a week).
    Additional analyses compared the outcomes of frequent and 
infrequent program participants. Frequent participants were more likely 
to be from disadvantaged households and to want to improve in school; 
however, analyses did not reveal that more frequent participation led 
to better outcomes.
    The evaluation study uses far more rigorous methodology than other 
studies cited in the after-school program literature. The evaluation 
includes an experimental research design (randomly selected 
participants in programs) for the elementary school portion of the 
study and a quasi-experimental research design (matched comparison 
groups) for the middle school portion. Other studies in the literature 
used less rigorous methodologies (and thus produced less reliable 
results), often presented highly selective results from small samples, 
and offered information about outcomes rather than impacts. (In 
contrast to ``outcomes'' that provide description information on the 
performance of those who chose to participate in the program, 
``impacts'' provide evidence of outcomes that are caused by their 
participation in the program.)
    Question. Isn't it true that there were many positive findings from 
the study, such as more parental involvement and better quality of 
homework produced that argue against such a reduction?
    Answer. The Department did not discount those findings. The report 
states that the achievement gains of African-American, Hispanic, and 
female students were very small (with improvements only in math and 
then by less than 2 points on a 1-100 point scale). While parental 
involvement is often thought to be important, the study reported no 
clear evidence that a link to achievement exists.
            impact of current vocational education programs
    Question. Given that the National Assessment of Vocational 
Education's final report has yet to be released by the Department, will 
you provide specific information about any possible findings that have 
led the Administration to conclude that the current vocational 
education programs are not improving student outcomes?
    Answer. Since 1917, the Federal Government has invested in helping 
States and schools better prepare young people for the future, seeking 
to ensure that every young person leaves high school with the skills he 
or she needs to succeed. However, evidence shows that we are failing to 
adequately prepare our youth for the future. For example:
  --Recent NAEP and TIMSS data show little improvement in high school 
        students' relative academic performance. Nationally, the high 
        school graduation rate has declined, with many non-graduates 
        eventually obtaining GEDs or other alternative certificates 
        that have less value in the labor market than traditional high 
        school diplomas have.
  --Large proportions of high school students enter college, but many 
        fail to complete. The best available data suggest that rates of 
        remediation in college are high, and that students who have 
        taken remedial course work are much less likely to persist and 
        eventually earn a college degree than are other students.
  --With regard to employment and earnings, students with higher-level 
        math skills earn substantially more than do students with the 
        same level of educational attainment but weaker skills. A 
        similar pattern exists with regard to reading skills.
  --Surveys of firms indicate that many test job applicants and that 
        the proportion of applicants who lack the necessary basic 
        literacy and/or math skills may be growing. Thus, even students 
        who enter the job market directly out of high school must have 
        a strong foundation of academic competencies.
  --There is no evidence that vocational course taking, as it has been 
        structured, is likely to address deficiencies in academic 
        achievement or improve rates of college going. The previous 
        National Assessment of Vocational Education (NAVE) Final 
        Report, published in 1994, commissioned and reviewed several 
        studies and found: (1) no relationship between vocational 
        education and academic achievement gains, or a negative effect 
        if students substitute vocational for academic courses, and (2) 
        a similar relationship to postsecondary education. A more 
        recent rigorous evaluation of career academies, representing a 
        broad vision of vocational education, found that these programs 
        did not improve standardized math and reading achievement test 
        scores, had no effect on the graduation rate, and did not 
        increase the proportion of students who enroll in postsecondary 
        education by the end of the first year following high school 
        graduation.
    The current structure of the Federal vocational and technical 
education program is not adequately addressing these issues. The NAVE 
final report is likely to provide additional supporting evidence of the 
program's inadequacies.
    Question. Are these findings applicable to all groups of students?
    Answer. Yes. In fact, while there are significant achievement gaps 
between low-income and minority students and their peers, the overall 
academic attainment of all high school students is inadequate and 
disappointing. Too few students, regardless of their family income, 
race, or ethnicity, are leaving high school without the skills they 
will need to succeed in postsecondary education and the job market.
     reauthorization proposal for secondary and technical education
    Question. Please explain how the Administration's proposed 
secondary and technical education program would better prepare a 
complete workforce, with a broad range of skills that will be needed in 
the Nation's current and future economy.
    Answer. The Administration's proposed Secondary and Technical 
Education Excellence program would shift the Federal role from 
supporting traditional vocational education to focusing on improving 
high school academic achievement and on supporting high-quality 
technical education programs that span the high school and college 
levels, thus making sure that students are taught the academic 
knowledge and technical and practical skills needed to make successful 
transitions from high school to college and from college to the 
workforce.
    In particular, States would use their Federal formula allocations 
to make grants to partnership of local educational agencies and 
community and technical colleges to develop or implement academic/
technical education programs that show promise or are effective (or 
show promise of) in improving students' academic and technical skills, 
increasing degree attainment, reducing the need for remedial courses at 
the postsecondary level, and improving employment outcomes. Further, to 
improve the quality and labor market responsiveness of the curriculum 
and to make it easier for high school graduates to transition to 
postsecondary education, the proposed program will promote greater 
collaboration between technical and community colleges and high schools 
in planning and delivering technical education coursework for secondary 
school students, as well as continue to support postsecondary programs 
for adult, career-changing students.
    Creating cutting-edge programs of this kind can be costly and time-
consuming for administrators, teachers, college faculty, and business 
leaders, but the proposed program will provide communities with both 
incentives and resources to take on the difficult but important task of 
better preparing our young people for the future.
    fiscal year 2004 budget request for the secondary and technical 
                      education excellence program
    Question. Given the proposed reduction of $326 million in 
vocational education programs and the proposed authority to transfer 
funds for use under Title I of ESEA, are you concerned that there would 
be sufficient Federal financial assistance to support effective career 
and technical education programs throughout the United States; and, if 
not, why?
    Answer. We believe that the 2004 budget request is sufficient for 
the proposed Secondary and Technical Education Excellence program. 
Under the current program, $1.19 billion is spread thinly, supporting 
general expenses like equipment purchases and hiring of staff, but 
having little direct impact on student learning. The new program would 
target funds to a smaller number of high-need high schools that show 
promise for raising student achievement and to community colleges that 
are able to provide students with high-quality education and training 
leading to successful employment outcomes.
    In particular, at the high school level, the program would provide 
funds to local educational agencies to develop or implement technical 
education programs that include the high-level academics that all 
students need in order to succeed in postsecondary education and the 
job market. In addition to promoting high-quality community and 
technical college programs for adult, career-changing students, the 
program would encourage technical and community colleges to act as more 
active partners in secondary technical education, both to improve the 
quality and labor market responsiveness of the curriculum and to make 
it easier for high school graduates to transition to postsecondary 
education. Thus, Federal funds would be more tightly focused on 
promoting the development and implementation of programs that are most 
responsive to the academic and technical skill demands of the 21st 
century workforce.
                       student aid administration
    Question. The President's 2004 budget request proposes the 
development of a new, discretionary Student Aid Administration (SAA) 
account that would consolidate all student aid management costs 
previously funded through the discretionary Program Administration and 
Federal Family Education Loan Program (FFELP) accounts and the 
mandatory Federal Direct Student Loan Programs (HEA Section 458) 
account. Secretary Paige, could you please explain why the President 
and the Department are seeking to move the mandatory funds obligated 
under Section 458 of the Higher Education Act of 1965, as amended, from 
a mandatory to discretionary account when the Higher Education Act is 
up for reauthorization this year?
    Answer. The current student aid administration budget structure--
split among multiple mandatory, discretionary, and subsidy accounts--
makes it difficult to hold Federal Student Aid, the performance-based 
organization within the Department, accountable for reducing program 
operations costs. The fiscal year 2003 appropriations act took a first 
step toward rationalizing this structure by unifying discretionary 
funding for student aid operations in the Student Aid Administration 
account. We believe that it is appropriate to complete the process in 
the 2004 appropriation, consistent with the President's management and 
financial improvement agendas.
    Question. Why should this provision be enacted through the 
appropriations process, instead of taking the regular course through 
the authorizing committee?
    Answer. As noted above, the fiscal year 2003 appropriations act 
took a first step toward rationalizing the funding structure for 
student aid operations by unifying discretionary funding in the Student 
Aid Administration account. Completing the process in the 2004 
appropriation is a key component of the President's budget, management, 
and financial improvement agendas.
    Question. One of the purposes identified by the Congress for 
establishing the Performance Based Organization (PBO) was to improve 
service to students and other participants in the student financial 
assistance programs authorized under title IV of the Higher Education 
Act. Given that administrative expenses for the PBO are closely 
associated with the number of loans issued in a given year--a level 
which could be difficult to predict--how will the proposal to make 
administrative expenses subject to annual appropriations better achieve 
that purpose behind the creation of the PBO?
    Answer. Mandatory administrative funding levels are typically set 
for 5-year periods, and for the past few years have been straightlined 
except for growth in guaranty agency administrative payments. We 
believe that setting funding levels as part of the annual 
appropriations process will actually allow greater flexibility to 
ensure that sufficient funds are available to provide the best possible 
service to student aid program participants.
    The Administration is developing a true activity-based budget 
formulation process for student aid administration to better 
incorporate Department workload projections in its annual budget 
request. (The number of loans in a given year is but one of a large 
number of variables, including the number of student aid applications, 
awards, loans in default, Direct Loans in repayment, etc., that 
determine student aid administrative costs.) This process will also 
allocate student aid management expenses to specific business 
processes, allowing the Department to more accurately determine the 
cost of individual activities or programs, and facilitating efforts to 
budget administrative funds to each business process, set cost 
reduction targets, and easily compare actual performance to budget 
targets.
          student aid appropriations and administrative costs
    Question. What happens if funds appropriated fell short of the 
amount required to meet the operations of the PBO?
    Answer. We are confident that Department managers will be able to 
operate their operations effectively within the requested funding 
level. The Department has long experience managing program operations 
with discretionary funds--as you know, it is already the case with the 
Department's program administration funds and, indeed, virtually all 
other administrative appropriations in the entire government.
    Question. How would services to students and other participants be 
affected?
    Answer. We do not expect that this proposal would affect service to 
students, schools, and other student aid program participants. This is 
a management improvement designed to improve program efficiency while 
being transparent to program beneficiaries.
student financial assistance: pell applicant growth and projected pell 
                           funding shortfalls
    Question. Given the unexpected 9 percent and 10 percent growth in 
the Pell Grant program over the past two years, do you expect that your 
estimates of 25 percent applicant growth in the coming academic year 
and 1.5 percent for the following year create a shortfall greater than 
the one estimated under the President's budget request?
    Answer. The Administration believes that the applicant growth 
estimates underlying the President's Budget request for Pell Grants are 
prudent assumptions based on an analysis of historical trends. During 
the previous period of Pell Grant funding shortfalls--from academic 
years 1990-91 to 1993-94--the applicant growth rate increased 
cumulatively by 22.5 percent, or at an annual average of 5.6 percent. 
Immediately following this period of (then) unprecedented applicant 
growth, the number of Pell applicants grew by only 1.4 percent in 
academic year 1994-95. Furthermore, applicants grew only 13 percent 
during the 7-year span between academic years 1994-95 and 2000-01. The 
average growth rate per award year for this 7-year period was 1.6 
percent.
    During the current funding shortfall, Pell applicants increased 
cumulatively by 18.6 percent during award years 2001-02 and 2002-03. 
Based on historical data, the Department's applicant projection for AY 
2004-05 assumes a similar pattern of decline immediately following 
cumulative surges, as recorded during the last funding shortfall. In 
addition, given the recent cumulative growth among older, independent 
students and projected population figures for students in the 
traditional college age cohort, it is possible that the pool of Pell 
applicants not already receiving awards will begin to shrink.
                       pell grant funding history
    Question. Over the life of the Pell Grant program, how often have 
there been annual funding shortfalls, as reported in Pell Grant End-of-
Year (EOY) Reports?
    Answer. A comparison between total expenditures and appropriation 
level for a given award year in the Pell Grant EOY Report does not 
accurately portray the cumulative funding shortfall or surplus since 
prior-year unobligated funds may be used in current years and funds 
from future appropriations are often used to cover current year 
shortfalls. Moreover, appropriation levels are often determined based 
on the estimates of prior-year shortfalls and surpluses, in addition to 
the estimated current year program cost.
    A table from the Award Year (AY) 2000-01 Pell Grant EOY Report is 
provided, however, to illustrate the total expenditures, appropriation 
level, current year shortfall/surplus, and the reduction method 
employed to help alleviate Pell Grant shortfalls.
    An additional table is provided to show a more accurate portrayal 
of the Pell Grant shortfalls and surpluses dating back to 1989. These 
data are taken from final budget documents and financial systems, 
illustrating cumulative shortfall and surplus amounts over time.

                                                  HISTORY OF PELL GRANT FUNDING: AY 2000-01 EOY REPORT
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                        Current year
                Fiscal year                     Award year           Total          Appropriation         surplus/                    Action
                                                                expenditures \1\                         (shortfall)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1973......................................            1973-74        $48,469,000       $122,100,000        $73,631,000   Stepped Reduction
1974......................................            1974-75        361,188,000        475,000,000        113,812,000   Stepped Reduction
1975......................................            1975-76        932,083,000        840,200,000        (91,883,000)  Full Funding
1976......................................            1976-77      1,485,164,000      1,325,800,000       (159,364,000)  Full Funding
1977......................................            1977-78      1,534,395,000      1,903,900,000        369,505,000   Full Funding
1978......................................            1978-79      1,550,360,000      2,160,000,000        609,640,000   Stepped Reduction
1979......................................            1979-80      2,369,911,375      2,431,000,000         61,088,625   Full Funding
1980......................................            1980-81      2,400,656,660      2,157,000,000       (243,656,660)  Flat $50 Reduction
1981......................................            1981-82      2,313,263,380      2,604,000,000        290,736,620   Flat $80 Reduction
1982......................................            1982-83      2,433,130,730      2,419,040,000        (14,090,730)  Stepped
1983......................................            1983-84      2,810,851,530      2,419,040,000       (391,811,530)  Full Funding
1984......................................            1984-85      3,066,734,552      2,800,000,000       (266,734,552)  Full Funding
1985......................................            1985-86      3,611,447,366      3,862,000,000        250,552,634   Full Funding
1986......................................            1986-87      3,473,304,086      3,579,716,000        106,411,914   Linear Reduction
1987......................................            1987-88      3,768,737,216      4,187,000,000        418,262,784   Full Funding
1988......................................            1988-89      4,491,684,679      4,260,430,000       (231,254,679)  Full Funding
1989......................................            1989-90      4,794,454,987      4,483,915,000       (310,539,987)  Full Funding
1990......................................            1990-91      4,952,215,055      4,804,478,000       (147,737,055)  Linear Reduction
1991......................................            1991-92      5,811,633,979      5,375,500,000       (436,133,979)  Full Funding
1992......................................            1992-93      6,195,912,589      5,502,800,000       (693,112,589)  Full Funding
1993......................................            1993-94      5,673,231,640      6,461,900,000        788,668,360   Full Funding
1994......................................            1994-95      5,537,849,327      6,636,700,000      1,098,850,673   Full Funding
1995......................................            1995-96      5,489,766,815      6,146,800,000        657,033,185   Full Funding
1996......................................            1996-97      5,798,361,158      4,914,000,000       (884,361,158)  Full Funding
1997......................................            1997-98      6,349,755,300      5,919,000,000       (430,755,300)  Full Funding
1998......................................            1998-99      7,252,057,389      7,344,900,000         92,842,611   Full Funding
1999......................................            1999-00      7,039,119,041      7,704,000,000        664,880,959   Full Funding
2000......................................            2000-01      7,975,801,349      7,640,000,000       (335,801,349)  Full Funding
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Total Expenditures also include Administrative Cost Allowance (ACA) payments.
 
Note: Since prior-year unobligated funds may be used in current award years and funds from future appropriations may be used, fiscal year appropriation
  levels are often based on estimates of prior-year funding shortfalls and surpluses--in addition to the estimated current year program cost. Therefore,
  the comparison between total expenditures and appropriation level may not provide an accurate representation of funding shortfalls and surpluses
  Moreover, obligation levels continue to fluctuate after the EOY Report has been printed.


                       HISTORY OF PELL GRANT FUNDING SURPLUSES/SHORTFALLSBASED ON BUDGET/FINANCIAL SYSTEMS: FISCAL YEAR 1989-2003
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Annual surplus/       Cumulative
                 Fiscal year                      Award year          (Shortfall)     Surplus/ Shortfall     Action(s) taken for cumulative shortfall
--------------------------------------------------------------------------------------------------------------------------------------------------------
1989........................................            1989-90        ($75,366,675)  ..................
1990........................................            1990-91       ($230,367,465)      ($305,734,140)  Fiscal year 1991 funds used.
1991........................................            1991-92       ($396,568,870)      ($702,303,010)  Fiscal year 1992 funds used.
1992........................................            1992-93         $18,219,444       ($684,083,566)  Fiscal year 1993 Appropriation ($240M); fiscal
                                                                                                           year 1993 Supplemental Appropriation ($341M);
                                                                                                           Transfers ($9M); fiscal year 1994 funds used.
1993........................................            1993-94        $459,709,140       ($224,374,426)  Fiscal year 1994 Supplemental Appropriation
                                                                                                           ($250M); Transfers ($3.1M).
1994........................................            1994-95        $807,731,000        $583,356,574
1995........................................            1995-96        $715,845,000      $1,299,201,574
1996........................................            1996-97       ($864,440,000)       $434,761,574
1997........................................            1997-98       ($396,000,000)        $38,761,574
1998........................................            1998-99        $123,934,000        $162,695,574
1999........................................            1999-00        $474,000,000        $636,695,574
2000........................................            2000-01       ($317,283,000)       $319,412,574
2001........................................            2001-02     ($1,242,000,000)      ($922,587,426)  Fiscal year 2002 funds used.
2002........................................            2002-03       ($310,000,000)    ($1,232,587,426)  Fiscal year 2002 Supplemental Appropriation
                                                                                                           ($1B); fiscal year 2003 funds will be used.
2003........................................            2003-04       ($305,353,000)    ($1,537,940,426)  Fiscal year 2004 funds will be used.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: Funding surplus/shortfall amounts reflect supplemental appropriations, rescissions, and transfers
Data for award years 2002-03 and 2003-04 are estimates based on assumptions used in the President's fiscal year 2004 Budget and final fiscal year 2003
  action.

    Question. Please outline how each of those shortfalls has been 
addressed?
    Answer. As shown in the first table above, the Pell Grant maximum 
award has been reduced in eight award years, by various methods, due to 
insufficient funding. The additional table lists supplemental 
appropriations, transfers, and other steps taken during the years of 
cumulative shortfalls.
         pell grant maximum award and cost of higher education
    Question. Does your proposal to establish a maximum Pell Grant at 
$4,000 for fiscal year 2004 mean that students served by the program 
will lose ground relative to the price of postsecondary education?
    Answer. Since 2000, the increase in the Pell Grant maximum award 
has matched the increased average cost of attendance at 4-year public 
institutions. We will work with our partners in States and institutions 
to ensure students--especially the most needy students--retain access 
to quality postsecondary education.
    fiscal year 2004 education budget request and student access to 
                        postsecondary education
    Question. The fiscal year 2004 budget request reduces funding for 
Supplemental Education Opportunity Grants, Federal Work-study, the 
Perkins loan program, GEAR UP and TRIO programs. In addition, the 
budget proposes reducing the maximum Pell Grant award to $4,000. The 
Nation's neediest students are the ones supported by these programs. 
How does the Administration justify reducing and in some cases 
eliminating funding for these programs at a time when State budget 
reductions are forcing higher tuitions and fees and there is a rapidly 
growing population of needy students that want and should go to 
college?
    Answer. Because the fiscal year 2004 budget request was prepared 
before the fiscal year 2003 appropriation was finalized, it was based 
on the Administration's fiscal year 2003 budget request. As a result, 
in a number of cases where the actual appropriation exceeded the 2003 
request, the Administration's intent to provide level funding in fiscal 
year 2004 now appears to be a decrease in support. (This is true for 
the Pell Grant maximum and the Supplemental Education Opportunity Grant 
(SEOG), TRIO and GEAR UP programs. Our request for Federal Work-Study 
would be an increase over the final fiscal year 2003 level.) The 
Administration is prepared to work with Congress to adjust priorities 
in the fiscal year 2004 budget, but is committed to maintaining an 
overall discretionary spending limit that is consistent with the 
Administration's request.
    That said, our priority for 2004, as it has been for the past few 
years, is the Pell Grant program, the largest and most need-based of 
Federal student grant programs. Accordingly, the President proposed a 
record $1.35 billion, or 12 percent increase, for Pell Grants, for an 
all-time high total of $12.7 billion. We believe that concentrating our 
resources in this way--the Pell increase alone is actually 
significantly larger than the entire SEOG or Work-Study program, or 
TRIO and GEAR UP combined--is the most efficient way to help the most 
needy students.
    Question. What other sources of assistance are available under the 
budget request to continue to provide access to quality postsecondary 
education for all Americans?
    Answer. Under the Administration's fiscal year 2004 budget request, 
the Federal Family Education Loan and William D. Ford Direct Student 
Loan programs will provide nearly $47.6 billion in loans to help 
students and parents pay for postsecondary education. In addition, the 
request maintains support for several other higher education programs 
that help to provide access to postsecondary educational programs. The 
Byrd Honors Scholarships program would receive $41 million under the 
2004 request to provide more than 27,000 merit-based scholarships for 
undergraduate students. The Javits Fellowships and Graduate Assistance 
in Areas of National Need programs also would receive a combined $41 
million to provide merit- and need-based awards for students pursuing 
advanced degrees. Additionally, the Fund for the Improvement of 
Postsecondary Education would receive $39.1 million to support a wide 
range of innovative projects, including many focused on increasing the 
access and retention of underrepresented students.
    administration's proposed income tax provision and reduction of 
                     erroneous student aid payments
    Question. The Administration has proposed to allow the IRS to match 
income tax return data against student aid applications, in order to 
reduce the number of erroneous student aid payments. According to the 
U.S. Department of Education, this proposal would save the Federal 
Government $292 million in erroneous payments during the 2003-2004 
academic year and $346 million in the 2004-2005 academic year. What 
steps have you taken to gain the support of the authorizing committees 
of jurisdiction?
    Answer. We have been working closely with both tax writing 
committees as well as the Joint Committee on Taxation (``JCT'') to 
enact this proposal. While there is support for the goal of eliminating 
erroneous payments in the student aid programs, the JCT has raised 
questions about the privacy implications of allowing Department 
contractors access to applicant tax data in order to implement the data 
match. We are working closely with the JCT to demonstrate that the 
Administration's proposal will actually strengthen protection of 
applicant tax data versus the current verification process.
 other steps taken to reduce and eliminate erroneous federal education 
                                payments
    Question. What other steps is the Department taking to reduce and 
eliminate erroneous Federal education payments?
    Answer. The Department is taking a number of steps to address the 
problem of erroneous payments, including working closely with the 
Office of Management and Budget in implementing Public Law 107-300, the 
Improper Payment Information Act of 2002. The Act mandates tracking 
erroneous payments down to the sub-recipient level for grants and all 
procurements, in addition to loans, loan guarantees, etc. The threshold 
will be 2.5 percent or $10 million in improper payments, whichever is 
greater, proven by a statistical sample with a 90 percent confidence 
level.
             leveraging educational assistance partnerships
    Question. Mr. Secretary, your budget eliminates the Leveraging 
Educational Assistance Partnership (LEAP) program. Since nearly all 
States are facing deficits, tuition rates are being forced up, and 
research by the Advisory Committee on Student Financial Assistance and 
others has documented the need for more State/Federal partnership 
program funding to close the growing college access gap between low- 
and high-income students, can you tell me why you think eliminating 
this program is a good idea?
    Answer. Since LEAP was first authorized as the SSIG program in 
1972--when only 28 States had undergraduate need-based grant programs--
the State commitment to providing need-based student aid has grown 
exponentially. Today nearly all States have need-based student grant 
programs, with grant levels that have expanded greatly over the years, 
and most States significantly exceed the statutory matching 
requirements. For academic year 2001-2002, for example, estimated State 
matching funds totaled nearly $1 billion, more than $950 million over 
the level generated by a dollar-for-dollar match, and far more than 
would be required even under the 2-for-1 match under Special LEAP. This 
suggests a considerable level of State commitment, regardless of 
Federal expenditures.
  javits fellowships and graduate assistance in areas of national need
    Question. Mr. Secretary, the Graduate Assistance in Areas of 
National Need (GAANN) and Jacob Javits programs attract exceptionally 
promising students into graduate study to pursue degrees in areas of 
national need--such as chemistry, information sciences, and 
engineering--as well as in the arts, humanities, and social sciences. 
The fiscal year 2004 budget request proposes roughly level funding for 
these programs at a time when supporting advanced study in these areas 
is of great importance to the Nation. The National Science Foundation 
(NSF) and the National Institutes of Health (NIH) have proposed 
increasing their graduate education budgets for fellowships and 
traineeships. Why have you not done the same, given the important niche 
these programs serve in the Federal Government's graduate education 
portfolio?
    Answer. The general approach this year was to request increases for 
selected high-priority programs. Our priority for 2004, as it has been 
for the past few years, is the Pell Grant program, the largest and most 
need-based of Federal student grant programs. We believe that 
concentrating our resources in this way is the best way to help the 
most needy students. The Administration supports the Javits Fellowships 
and GAANN programs and recognizes that they play an important role in 
preparing students for scholarly careers and careers in areas of 
national need. The funding requested for these programs would support a 
total of 1,116 fellowships, including approximately 400 new 
fellowships. However, in light of the current budget conditions, the 
Administration considered it necessary to demonstrate fiscal discipline 
and limit program increases to only the highest-priority programs.
        recreational programs for individuals with disabilities
    Question. With a success/sustainability rate of nearly 75 percent, 
recreational programs have proven to be an effective approach to 
leveraging local and private funding to support the integration of 
individuals with disabilities into the community. Budget documents 
indicate that this program has limited national impact and that funding 
is more appropriately derived from States, local agencies and the 
private sector. Doesn't the Federal Government have a specific role in 
stimulating and leveraging local and private funding for recreational 
programs that support the community integration needs of individuals 
with disabilities?
    Answer. We do believe that the Federal Government has a role in 
helping individuals with disabilities become full and active members of 
society. We have targeted resources on those activities in which the 
Federal role is critical. For example, the Department is supporting 
over 20 National Institute on Disability and Rehabilitation Research 
(NIDRR) projects that include some attention to issues relating to the 
participation of individuals with disabilities in recreational, 
physical exercise, or leisure activities. For example, NIDRR just began 
support for a 5-year $5.4 million Rehabilitation Engineering Research 
Center on Recreational Technologies and Exercise Physiology Benefiting 
Persons with Disabilities. This center will study recreational 
opportunities for individuals with disabilities, interventions to 
increase physical activity and recreation participation of individuals 
with disabilities, and strategies to reduce physical activity relapse 
and dropout rates. The center will be conducting randomized clinical 
trials to evaluate improvements in health and function.
    Another example is the Traumatic Brain Injury (TBI) Model System 
located at the University of Washington's Department of Rehabilitation 
Medicine. The project conducts research on the effect of exercise on 
depression after TBI. This low-cost community intervention seeks to 
combat depression and emotional distress in persons with stable TBI, by 
employing exercise as a positive approach to improved emotional and 
physical functioning and socialization. This 5-year project began in 
fiscal year 2002 and is budgeted to receive a total of $1.825 million.
    continued availability of recreational programs for people with 
                              disabilities
    Question. What evidence does the Department have that recreational 
programs for individuals with disabilities would continue to be 
available to those in need of them without the seed money provided by 
this program?
    Answer. The best evidence the Department has is the track record of 
the programs we have funded. Grantees are required to provide an 
increased level of support from non-Federal sources over their 3-year 
project period. Of the 33 grantees whose projects received their last 
year of Federal support during fiscal years 1998 through 2000, 24 
projects are still in operation and providing recreational services to 
individuals with disabilities. Even more importantly, most recreation 
programs have been initiated and sustained without Federal funds.
              assistive technology act state grant program
    Question. State Grant funding provided under title I of the 
Assistive Technology Act has been critical to building an 
infrastructure specifically designed to ensure that people with 
disabilities--regardless of age or disabling condition--have access to 
the technology devices and services they need to be independent and 
productive members of society. Without this national infrastructure, 
there will be unbridgeable gaps in access to Assistive technology 
devices throughout the country. Why does the Department's budget 
request propose to eliminate Federal financial support for these 
activities?
    Answer. The Assistive Technology (AT) State grant program was 
designed to be time-limited. The authority for this program originally 
authorized 10 years of funding for States. However, in fiscal year 1998 
Congress enacted the new Assistive Technology Act in order to provide 
States with an additional 3 years of funding, among other things. The 
Administration believes that the AT State grant program has fulfilled 
its original mission by providing 10 or more years of Federal funding 
to States to assist them with achieving the goals of AT Act. In fiscal 
year 2003, all States will have received 10 years of funding and 31 
States will have received at least 13 years of funding.
         helping people with disabilities achieve independence
    Question. Numerous technological and policy changes such as the 
Olmstead decision, Section 508 final guidelines, and the 
Telecommunications Act Section 255 were not anticipated when the sunset 
provisions related to Federal support of Tech Act Projects were 
originally conceived. Does the Department believe that Assistive 
Technology State grant projects have a role to play in building an 
infrastructure that ensures that people with disabilities can be 
independent and productive members of society?
    Answer. The AT State grants program has helped States to increase 
access to AT services and devices through changes in State laws, 
regulations, policies, practices, procedures, and organizational 
structures. State AT Act programs have had over 10 years of experience 
in developing and implementing AT policies, procedures, and programs 
that support community integration and full participation of 
individuals with disabilities in home, work, education, and community 
settings. States now have a much greater capacity to deal with changes 
in policy and technology that have occurred since the AT Act was first 
enacted. The Administration is committed to helping people with 
disabilities achieve independence through such efforts as the New 
Freedom Initiative. It has targeted Federal investments on such 
activities as research and development, through the National Institute 
on Disability and Rehabilitation Research's Rehabilitation Engineering 
Research Centers, the AT alternative financing program, which makes 
loans for purchasing assistive technology available to individuals with 
disabilities, and dissemination and technical assistance efforts like 
the NIDRR's Disability and Business Technical Assistance Centers 
(DBTACs http://www.adata.org/dbtac.htm), which provide information, 
materials, technical assistance, and training on the ADA and accessible 
information technology.
    Question. If so, what is that role and how will it be carried out 
without Federal financial assistance?
    Answer. Federal support provided under the AT State grants program 
has played a role in building an infrastructure specifically designed 
to ensure that people with disabilities, through assistive 
technologies, have full access to home, work, education, and community 
activities. States are well positioned to continue to identify consumer 
needs and address changing trends.
             programs eliminated in fiscal year 2004 budget
    Question. The fiscal year 2004 budget request proposes to eliminate 
48 categorical grant programs funded at $1.6 billion last year, ranging 
from the Smaller Learning Communities program and Arts in Education to 
Rural Education. Many of these programs are programs that were just 
reauthorized last year as part of the No Child Left Behind Act and have 
strong congressional backing. Can you explain why you propose to 
eliminate these programs?
    Answer. Major program increases in the 2004 President's budget are 
offset in part by these proposed program terminations, nearly all of 
which are narrow categorical activities that have achieved their 
purpose, have a limited impact, or may be funded through other more 
flexible State grant programs. Without these reductions, it would be 
impossible to provide significant increases to major Administration and 
Congressional priorities such as Title I, Special Education Grants to 
States, and Pell Grants. In addition, the Administration believes it is 
more effective to deliver scarce Federal education resources to States 
and school districts through large, flexible formula grant programs 
rather than small, categorical grant programs mandating particular 
approaches to educational improvement.
               assessing education program effectiveness
    Question. Please provide the subcommittee with the names of and 
primary findings from the evaluation studies used for identifying 
ineffective programs. If it is the Department's view that these 
programs are duplicative of other broader authorities, please provide a 
list of the eliminated programs, categorized by the broad authorities 
under which the activities may be undertaken.
    Answer. The primary vehicle for assessing program effectiveness 
during the development of the 2004 President's budget was the new OMB 
``Program Assessment Rating Tool'' (PART), which was developed to help 
integrate budget and program performance. The PART instrument rated 
programs based on responses to 26 questions in four areas, including 
program purpose and design, strategic planning, program management, and 
program results. PART also relied on evaluation results whenever they 
were available for the programs under review.
    The PART process identified 4 of the Department's programs as 
ineffective: Even Start, Safe and Drug-Free Schools and Communities 
State Grants, TRIO Upward Bound, and Vocational Education State Grants. 
For the Even Start program, the evaluation findings provided the basis 
for the ineffective rating. The PART assessment found, among other 
things, that 3 national evaluations of the program (National Evaluation 
of the Even Start Family Literacy Program (1995), Second National 
Evaluation of the Even Start Family Literacy Program: Final Report 
(1998), and Third National Even Start Evaluation: Program Impacts and 
Implications for Improvement (2003)) show that the program has had no 
significant impact on the children and parents served.
    Below is a list of programs authorized in NCLB that the 2004 budget 
proposed for elimination because they are duplicative or the activities 
authorized can be carried out under other programs, such as the Title I 
Grants to Local Educational Agencies, Improving Teacher Quality State 
Grants, Educational Technology State Grants, and Safe and Drug-Free 
Schools and Communities State Grants. Also, if States and districts 
chose to do so, activities supported by most of these programs can be 
carried out under State Grants for Innovative Programs (Title V-A).
    Comprehensive school reform; Close Up fellowships; Dropout 
prevention programs; School leadership; Advanced credentialing; 
National writing project; Preparing tomorrow's teachers to use 
technology; Elementary and secondary school counseling; Smaller 
learning communities; Javits gifted and talented education; Star 
schools; Ready to teach; Community technology centers; Parental 
assistance information centers; State grants for community service for 
expelled or suspended students; Alcohol abuse reduction; Rural 
education.
       fiscal year 2004 budget vs. flexibility and accountability
    Question. Under the State and Local Transferability Act enacted as 
part of the No Child Left Behind Act, States and local school districts 
are provided with additional flexibility to target certain Federal 
funds to Federal programs that most effectively address the unique 
needs of States and localities, and to transfer Federal funds allocated 
to certain State grant activities to allocations for certain activities 
authorized under Title I. How did the Department consider this 
authority in making its fiscal year 2004 budget request?
    Answer. The 2004 budget request maintains high levels of funding 
for the programs that are included in the transferability authority 
(Improving Teacher Quality State Grants, Educational Technology State 
Grants, State Grants for Innovative Programs, and Safe and Drug-Free 
Schools and Communities State Grants). Supporting State and local 
efforts to transfer funds is consistent with the Administration's 
belief that the most effective use of Federal funds is to provide them 
to States and districts through flexible formula grant programs that 
target funds to the classroom and allow local districts to use the 
funds in a manner that best meets their needs. Federal formulas cannot 
deliver funds to all school districts in amounts that align with their 
priorities.
             state and local transferability act authority
    Question. How will the authority be considered in assessing the 
relationship between Federal funding provided and the performance 
outcomes achieved with such funds?
    Answer. The Department plans to collect information, through 
program performance reports and a study of resource allocation, on the 
amount of funds transferred among programs under the transferability 
authority. Unlike the other flexibility demonstration options, 
transferability does not require States or districts to submit 
applications or to meet additional performance goals or separate 
accountability requirements. Through the statewide accountability 
system, districts are accountable for making adequate yearly progress 
(AYP). Transferability is a tool best used as part of a larger strategy 
for improvement.
    As for the relationship between Federal funding and performance 
outcomes, in general, we believe that it is often not possible to 
isolate the separate impact of many Federal programs on student 
outcomes, in due to the fact that Federal programs frequently seek to 
leverage broader State and local improvements in education programs. 
However, we will also continue to collect and report information on 
trends in student outcomes in order to assess the overall impact of 
Federal, State, and local reform efforts on student achievement.
    Question. How will this authority shape decisions on future budget 
requests for affected programs?
    Answer. The transferability authority supports the Administration's 
emphasis on rationalizing and consolidating the delivery of Federal 
education resources in order to give States and school districts 
maximum flexibility in using these resources to meet local needs and 
improve student achievement while reducing administrative, paperwork, 
and regulatory burdens. As with the 2004 budget request, I expect that 
we will work to maintain or increase funding for the flexible State 
grant programs included in the transferability authority, while 
reducing budget support for smaller categorical programs with limited 
impact and more complex administrative requirements.
                                 ______
                                 
               Questions Submitted by Senator Tom Harkin
             fiscal year 2004 budget request for education
    Question. Mr. Secretary, during the March 27 hearing, you agreed 
after much discussion that the President would be willing to support 
funding cuts in other Cabinet agencies in order to increase funding for 
the Department of Education, as long as overall discretionary 
appropriations do not exceed the total in the President's budget. You 
stated that you did not have any recommendations at that time about 
where to make cuts in the other Cabinet agencies, but that we could 
expect some guidance later.
    Given that the Senate Appropriations Committee could begin marking 
up appropriations bills very shortly, we need that guidance as quickly 
as possible. Do you have any suggestions for how much money the 
Committee should add for education, and where it should offset those 
increases with cuts?
    Answer. The President does not intend to change his 2004 Budget 
that was prepared and submitted to Congress, prior to Congress 
completing action on the 2003 Omnibus bill. The President's 2004 Budget 
was developed within a framework that set a proposed total for 
discretionary spending in 2004, and each agency and program request 
reflected the Administration's relative priority for that operation 
within that total. We recognize that Congress may believe there is a 
need to reorder and adjust some of these priorities, and the 
Administration intends to work with Congress to develop alternative 
figures for education programs as you go through the 2004 appropriation 
process, always within the requirement, however, that whatever is done 
for Education must fit within the overall President's 2004 budget total 
for discretionary programs. As Congress considers Education and related 
programs, I would urge you to consider our recommendations for reducing 
or eliminating individual categorical programs that have fulfilled 
their original purpose, proven ineffective, or which are duplicated by 
other larger, more flexible grant programs. That is a good way to 
stretch the education dollar.
              fiscal year 2004 budget and title i formulas
    Question. According to the Congressional Research Service (CRS), 
the Education Finance Incentive Grant funding (EFIG) stream authorized 
under Title I of the ESEA provides a modest financial reward, or 
incentive, to those States with education finance systems that minimize 
disparities in the distribution of State funding. CRS also reports 
that, in fiscal year 2002, the EFIG formula targeted a higher 
percentage of its funds to the two highest-poverty quintiles of needy 
students than any other funding formula (50.4 percent of EFIG funds, 
compared to 49.8 percent of targeted grant funds).
 education finance incentive grant funding (efig) vs. title i targeted 
                             grant formula
    Question. The Department of Education Appropriations Act, 2003, 
included $1.5 billion for EFIG, while the fiscal year 2004 President's 
budget reduces this funding to the fiscal year 2002 level of $793 
million and instead provides additional funding under the Targeted 
Grant formula. Given that the education finance funding stream is more 
targeted to the neediest students than any other formula and provides 
an incentive to States for reducing disparities in funding streams, why 
does the Administration propose reducing this funding stream and 
providing all of its proposed fiscal year 2004 Title I increase under 
the Targeted Grants program?
    Answer. The budget requests the entire increase under the Title I 
Targeted Grants formula because the formula delivers a larger share of 
Title I funds to high-poverty local educational agencies (LEAs) than 
the Education Finance Incentive Grant (EFIG) formula. Increasing the 
funding for Incentive Grants would simply divert more resources away 
from the highest-poverty States and districts with the greatest need 
for Title I funds.
    For example, the 10 poorest States by poverty rate account for 41.4 
percent of the total population of children in poverty aged 5-17. Based 
on fiscal year 2003 Preliminary allocations, these 10 States would 
receive 45 percent of the Targeted Grants funds and only 40 percent of 
the EFIG funds. By contrast, the 10 States with lowest poverty rate, 
which account for 6.7 percent of children in poverty aged 5-17, would 
receive 6.5 percent of the Targeted Grants funds and 7.9 percent of the 
EFIG funds.
    The EFIG formula, added to Title I in the 1994 ESEA 
reauthorization, includes ``effort'' and ``equity'' factors intended to 
benefit high-poverty districts by encouraging States to spend more on 
education and to improve the equity of the State funding systems. 
However, the formula unfairly shifts money from high-poverty States to 
low-poverty States, and has a very limited impact.
    The ``effort'' factor reduces the targeting of Title I funds to the 
highest-poverty States, primarily because the lower level of resources 
available for education in these States (at least on a per-capita 
basis) produces a lower level of ``effort'' in the formula. This 
reduced targeting is diametrically opposed to the purpose and design of 
the Title I program.
    States with the largest and highest-poverty urban centers--
including New York, Texas, and California--receive a significantly 
reduced share of funding under the Incentive Grants formula when 
compared to the Targeted Grants formula. For example, New York would 
receive 9.65 percent of Incentive Grants funding compared to 12.65 
percent of Targeted Grants funds and California's share of Incentive 
Grants funding is 13.72 percent compared to 15.7 percent of Targeted 
Grants.
    The ``effort'' factor also could adversely affect States 
experiencing a local recession, which may have to reduce education 
spending in response to declining local tax revenues. A further decline 
in Title I support--as would occur under the Incentive Grants formula--
would only exacerbate the problem faced by local districts and schools.
    The ``equity'' factor, which produces highly variable patterns of 
gains and losses among States, suffers from flaws that seriously 
undermine its validity. These include the absence of any adjustment for 
cost-of-living variations among LEAs and reliance on a single measure 
of equalization.
    Finally, the Education Finance Incentive Grant program does not 
provide a significant incentive for States to increase education 
funding or improve the equity of their funding systems. Even the $11.7 
billion currently spent on Title I LEA Grants contributes only about 3 
percent of national spending on elementary and secondary education.
                                 ______
                                 
              Questions Submitted by Senator Thad Cochran
         poverty data for fiscal year 2003 title i allocations
    Question. Since fiscal year 1997, Elementary and Secondary 
Education Act Title I funds have been allocated on the basis of 
estimates of school-aged children from poor families provided by the 
Census Bureau's Small Area Income and Poverty Estimates program, with 
updates every two years. Until the 2000 Census became available, 
Mississippi's poor student number was underestimated and using that 
method would have decreased the amount of Title I money for our State.
    For 2003, the Department has a choice of using these updates, or 
school district population estimates from the 2000 Census. Which source 
of data do you plan to use for fiscal year 2003?
    Answer. In determining Title I school district allocations for 
fiscal year 2003 (SY 2003-04), the Department will use the model-based 
poverty estimates provided by the Census Bureau. These estimates 
reflect sample data from the 2000 Census, which looks at income year 
1999, and 1999 estimates provided through the Bureau's Small Area 
Income and Poverty Estimates (SAIPE) program.
    We believe that the updated poverty estimates produced through the 
SAIPE model provide a more valid measure of school district poverty 
levels than the Census 2000 data and a more reliable basis for 
determining Title I allocations. These estimates factor in other, more 
up-to-date poverty measures such as Federal tax return and Food Stamp 
data, and address problems in the Census 2000 school district estimates 
resulting from sampling error.
    Question. Are there significant differences in State shares using 
these two population data sources?
    Answer. Overall, the total poverty count from the SAIPE model-based 
estimates is about 2.5 percent greater than the counts from the 2000 
Census. Both sources produce State shares that are very similar for 
most States. For example, South Carolina's State share of the total 5-
17 poverty with the 2000 Census is 1.54 percent, compared to 1.48 
percent with the SAIPE model-based estimates. This translates to a 3.9 
percent difference in South Carolina's State share when comparing the 
two. Over half of the States have State share differences less than 4 
percent and three-fourths of the States have differences less than 7 
percent. Only 6 States (Kansas, Idaho, Delaware, Maine, Massachusetts, 
and South Dakota) have State share differences over 10 percent. 
Massachusetts has the most significant difference in State shares, with 
1.45 percent of the total 5-17 poverty count with the 2000 Census and 
1.84 percent of the total 5-17 poverty count with the SAIPE estimates 
(a 26.6 percent difference in State share).
 no child left behind provision for annual updates on children in poor 
                                families
    Question. Finally, the No Child Left Behind Act allows for the use 
of annually updated data on children in poor families, rather than 
every second year--when do you expect to begin implementing this 
provision?
    Answer. We plan to use annually updated model-based poverty 
estimates of children ages 5 through 17 by school district beginning 
with the fiscal year 2004 (SY 2004-05) allocations. Fiscal year 2003 is 
the final year for which we are using data updated on a biennial basis.

                          SUBCOMMITTEE RECESS

    Senator Specter. Thank you all very much. The subcommittee 
will stand in recess to reconvene at 9 a.m., Tuesday, April 8, 
in room SD-192. At that time we will hear testimony from the 
Honorable Elias Zerhouni, Director, National Institutes of 
Health.
    [Whereupon, at 9:51 a.m., Thursday, March 27, the 
subcommittee was recessed, to reconvene at 9 a.m., Tuesday, 
April 8.]
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