The Administration is again proposing to reform the impact aid program. Recognizing that Federal activities provide an economic benefit to host communities, the reform would limit Federal aid to those school districts where free education is provided for children whose parents both live and work on Federal property. Since Federal property is exempt from local taxes, these families do not contribute to the cost of education, as other families do, and Federal contributions are fully justified. These proposals would save an estimated $285 million in 1977 and approximately $330 million in 1978.

Budget authority of $250 million is requested to provide assistance to those school districts that are in the process of eliminating discrimination. This assistance is aimed at improving the achievement of students, while providing for equality of educational opportunity.

Child development.-Federal funds foster research, demonstration, and service programs that aid the development of preschool children. In 1977, the head start preschool program will continue to serve about 349,000 children. Programs to curb child abuse will also be tested in 1977.

Higher education. The Administration's higher education programs will concentrate on providing assistance directly to students,

rather than to educational institutions. Total outlays will be $364 million lower in 1977 than in 1976, primarily because no further capital contributions for direct loans are proposed as greater reliance is placed on student grants and guaranteed loans.

The 1977 budget includes $1.1 billion in budget authority for basic educational opportunity grants of up to $1,400 each for 1.3 million undergraduate students in the 1977-78 school year. This compares to $1.0 billion requested in 1976 to support 1.1 million students. In addition, budget authority of $44 million in 1977 is requested for the State student incentive grant program that would provide assistance to 176,000 needy students. Budget authority of $250 million for workstudy would help 652,000 students obtain part-time employment. Legislation is proposed to increase the share of the employment cost borne by the participating institutions from 20% to 50%, over a 3-year period. This would permit Federal funds to serve 14% more students.

Budget authority of $400 million in 1977 for the guaranteed student loan program would help to provide an estimated $1.3 billion in loans. to aid about 1 million students in the 1976-77 school year. To assure an adequate supply of private capital for student loans, legislation is proposed to increase the maximum interest rate chargeable by banks from 10% to 11%. Because of the availability of the guaranteed student loans and $225 million available in 1977 from prior funds, no further capital contribution is requested for the national direct student loan program.

Tax expenditures totaling over $1.5 billion in 1977 also support higher education. The two largest of these are the deductibility of contributions to educational institutions and the personal exemption allowed parents with full-time student dependents over 18 years of age.

Special institutions.-Federal support is requested for construction of the Kendall School for Deaf Children to be located in the District of Columbia. Basic support for the National Technical Institute for the Deaf, Gallaudet College, and Howard University will be continued.

Research and general education aids.-Funds in this category provide support for educational research and development, cultural activities, special projects that focus on national needs in education, and program administration. Outlays of the National Institute of Education are estimated at $88 million in 1977, up $18 million from 1976. These funds would support studies on basic skill development; education and work; finance, productivity and management; and educational equity. They also support the dissemination of research results and other information. The National Foundation on the Arts

and the Humanities will spend approximately $191 million in support of cultural activities in 1977. Outlays of $114 million would support the activities of the Smithsonian Institution. Under the newly enacted Public Broadcasting Financing Act of 1975, two dollars of Federal funds will match every five dollars of private contributions to the public broadcasting system up to specified limits. In 1977, outlays are estimated at $70 million and in 1978, $80 million.

TRAINING, EMPLOYMENT, AND LABOR SERVICES

The Federal Government finances programs that help individuals to obtain jobs via training and employment services or through the provision of temporary public service jobs. It also sets and enforces minimum wage and other standards regulating employment and labormanagement relations practices. Unemployment compensation programs are included and discussed in the income security function.

Training and employment.-Federal funds are provided to States and localities for programs to train the unemployed and the disadvantaged, to help those seeking jobs find work, and to finance public service jobs. Outlays for these programs in 1977 are expected to be $5.0 billion, $1.9 billion less than in 1976, because of the phase

Outlays for Training, Employment, and Social Services

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down of public service jobs as regular employment continues to increase.

Temporary employment assistance. In response to the President's request, the Congress, in December 1974, authorized a temporary public service jobs program as one part of a series of efforts to bring additional aid to the unemployed. Appropriations through June 30, 1975, made $2.5 billion available for about 260,000 jobs. Another 50,000 jobs are funded from other training and employment programs. The budget provides for additional budget authority of $1.7 billion for temporary employment assistance in 1976. This authority will permit the continued operation of the program until January 1977, with a gradual phaseout through September 1977, as the economy continues to improve. In order to focus this additional aid where the need is greatest, funds will be distributed in areas with rates of unemployment over 6.5%, and the Federal contribution to annual wages will be limited to $7,000.

Training and employment program activities.—In 1977, $2 billion will be spent by States and localities on regular programs under the Comprehensive Employment and Training Act of 1973 (CETA). These funds will provide about 515,000 years of training and work experience through institutional training, remedial education, on-the-job training, job development, job matching, vocational counseling, and supporting services. In 1976, outlays for these programs are expected to be $495 million higher due to the effect of startup delays on 1975 spending. As State and local agencies sponsoring CETA programs gain experience in planning and managing these programs, they are able to focus more attention on tailoring activity to the needs of the local labor market and on improving the quality of program operations.

About $400 million of the total outlays expected in 1977 will be for national training and employment programs. These include programs for migrant workers and Indians, as well as research and. evaluation projects, and the Job Corps.

A special summer youth employment program will be funded in both 1976 and 1977. Preliminary outlay estimates for the summer of 1976 are $440 million to support 740,000 jobs, and for 1977, $400 million to support 670,000 jobs.

Work incentive program (WIN). This program provides help in obtaining jobs to those receiving aid to families with dependent children (AFDC). In 1975, jobs were found by 171,000 WIN program participants. Every employable AFDC recipient must register for the