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Budget Bill Boosts Chapter 1 Spending 18%

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Washington--The 1990 appropriations bill made public last week would increase the Education Department's budget to $24.1 billion and boost Chapter 1 spending by an unprecedented 18 percent.

The version of HR 2990 hammered out by House and Senate negotiators would provide $1.4 billion more than the department's 1989 budget, and $300 million more than the Administration requested.

It actually allots more for education than either of the bills originally passed by the House and Senate. That happened because conferees accepted the larger of the House and Senate amounts in many areas, including major ones like special education.

Since estimated costs for the Stafford student loan entitlement program are lower than in 1989, discretionary spending on education would increase by about $1.5 billion, or 9 percent, under the conference plan; discretionary spending in the bill as a whole would rise by only 5.7 percent.

"We are delighted with the $1.5-billion increase," said Susan Frost, executive director of the Committee for Education Funding.

Ms. Frost was particularly pleased with the Chapter 1 windfall, which she said would allow a million additional disadvantaged children to participate in the program.

She expressed disappointment, however, at a provision that delayed inclusion of part-time students in the Pell Grant program.

Chapter 1 would grow by $855 million under the bill, a figure that is less than the $1-billion hike recommended by the House but still unusually large.

Basic grants to school districts would rise by $500 million, while concentration grants to districts with large numbers of poor students would jump from $172.9 million to $400 million.

The conference report includes a provision guaranteeing each state at least $340,000 in concentration grants and $375,000 for program administration.

More for Research, Impact Aid

Spending on education research also would receive a significant in8crease that, nonetheless, does not match the House allocation. It would rise from $78.2 million to $96.4 million.

Of that amount, $15 million is earmarked for the newly expanded National Assessment of Educational Progress, giving naep a $5.3-million hike. Other statistical programs would receive $25.3 million and the department's general research efforts $51 million.

The research budget also includes $5 million to aid the National Board for Professional Teaching Standards, an expenditure that would require authorizing legislation. The Administration strongly opposes funding the board.

Total funding for impact aid to districts affected financially by the presence of federal property or workers would increase by more than suggested in either the House or the Senate bill, rising from $708.4 million to $732.4 million.

The increase would benefit the most heavily impacted districts as well as those eligible for construction funds. Payments for "b" children, whose parents either live or work on federal property, would be cut from $135.4 million to $123.5 million. The Administration has long sought to eliminate those payments, and the Senate would have cut them further, to $110 million.

Two new programs would be funded for the first time by the bill. Secondary-school basic-skills programs, authorized by last year's omnibus education law, would receive $5 million, and a program to foster business-education partnerships, included in the 1987 trade bill, would receive $3.75 million.

Bush Initiatives

A few programs would lose buying power under the bill, including some student-aid programs, the Women's Educational Equity Act, and aid to the Virgin Islands. The blue-ribbon-schools program, an Administration favorite, would be slashed from $889,000 to $500,000 .

The Chapter 2 block-grant program would be frozen at about $463 million, with $1.5 million reserved for an evaluation of its effectiveness.

The bill would allow the Education Department to devote $350 million to two of President Bush's education initiatives--merit schools and a new magnet-schools program--if they are authorized. But the money would have to be transferred from Chapter 1, a move that would not be popular.

Conferees cut $5 million the House would have provided for another Bush initiative, research funding for "education experiments."

The Administration is also not likely to be pleased with provisions that earmark much of the Secretary's discretionary fund for technology, computer, and health education, and require that increased funding for bilingual education be devoted to "developmental" programs, which the Administration has refused to fund.

'Accounting Gimmicks'

The conferees did not arrive at their relatively high education-spending totals solely by providing smaller increases for other agencies funded by the same bill.

"This bill contains more accounting gimmicks than any I've seen," said one budget aide.

They employed creative accounting to avoid exceeding limits on the bill's budgetary totals, particularly its total outlays, or the money to actually be spent in fiscal 1990.

For example, the bill specifies that, of some $1.2 billion allotted for an array of school-improvement programs, $899 million would not be available until July 1990. This ensures that most of the money would not be spent until fiscal 1991.

That technique was applied mainly to non-education programs. Most education programs are structured to spend most of their money long after it is appropriated.

In a similar vein, the bill "saved" $555 million in payments to states coping with newly legalized immigrants under the 1986 immigration law by transferring the appropriation from fiscal 1990 to fiscal 1992.

That move is sure to be controversial in affected states, where officials have complained that such funding, which pays for education expenses as well as other social services, is insufficient.

The conferees also "assumed" a $4-million savings in the bill as a whole, due to "improved procurement practices," and a $10-million reduction that supposedly would be achieved by capping the amount of work agencies could contract out to consultants. Some $3.8 million of the consultant savings are to come from the Education Department.

The House approved the conference report last week by a vote of 364 to 56, and the Senate is expected to follow suit. However, the appropriations bill is not entirely out of the woods yet.

White House spokesmen last week said President Bush might veto it to block new language allowing federally funded abortions for victims of rape and incest.

Its funding levels could also be cut to fund anti-drug programs. The Senate has adopted a provision that would employ an across-the-board cut in other discretionary programs to fund the anti-drug package, but it is unclear what shape the final funding mechanism will take.

In addition, the Congress appeared likely last week to miss its Oct. 16 deadline for action on the budget, which would trigger across-the-board cuts under the Gramm-Rudman-Hollings deficit-reduction law. Those cuts would be reversed once the Congress acted.

Most appropriations bills have been passed or are nearing final passage, but the Congress has stalled on the other component of its budget legislation: a "reconciliation" bill intended to save money through legislative changes in programs.

As usual, reconciliation has become the vehicle for a smorgasbord of provisions. Among the most controversial items in the House-passed bill are a cut in the capital-gains tax pushed by the Administration and competing child-care programs.

Lawmakers continued negotiations late last week on the possibility of acting on a stripped-down bill. The Senate, meanwhile, prepared to consider its own reconciliation measure.

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