HEAD START AND BLOCK GRANTS

The Bush administration and House leadership are proposing to block grant the Head Start program in eight states. This means states can use federal funds for their own early-childhood education programs and would no longer have to abide by national standards.

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HOUSE PASSES LABOR, HHS AND EDUCATION BILL

The Labor, Health and Human Services (HHS), Education appropriation bill passed by the House reveals a lack of commitment to education, providing everyone the tools to succeed, keeping low-income families warm, and preparing for bio-terrorism. Talk is cheap without the resources to make it real.

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LOW-INCOME FAMILIES STILL BEING HELD HOSTAGE

Extension of the child tax credit remains stalled with the House determined to add more deficit-deepening tax cuts.

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WHAT DO BLOCK GRANTS AND TAX CUTS HAVE IN COMMON?

The Bush Budget for FY 2004 proposes major funding changes, including block grants, for a number of low-income programs like Medicaid and the State Child Health Insurance Program (SCHIP), Section 8 Housing Vouchers, Unemployment Insurance, Head Start, Child Welfare and Job Training. The House has begun considering block granting Head Start and Job Training programs. This means that states would get a block of money, sometimes guaranteed for a fixed number of years, to administer programs with less federal oversight. Low-income families and children will lose any entitlement to a minimum federally set safety net that expands when more people are in need. While the safety net is slowing being eroded, block grants would speed up the process. Also, under TANF reauthorization, we expect the "superwaiver" to be revived again – this provision basically unties federal regulations, allowing state governors to waive federal rules in programs including food stamps, public housing, homelessness programs, childcare, job training and adult education.

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END OF THE FISCAL YEAR: HOW ARE STATES DOING?

The National Governors Association and National Association of State Budget Officers published a sobering report from their latest fiscal survey. The new is very bad indeed. The report finds:

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APPROPRIATIONS UPDATE: Let the Cuts Begin

Despite a delay in dividing up the overall discretionary spending amount (as determined in the Congressional budget resolution) among the thirteen spending categories (the 302[b] allocations), Congress is quickly moving forward with the FY 2004 appropriations bills. So far, the House Appropriations Committee has approved seven bills; the Senate Appropriations Committee has approved two. Congress intends to pass all the bills by the start of the August recess so they can be finalized before the new fiscal year starts in October. The bills cover appropriations for FY 2004, which runs from October 1, 2003 through September 31, 2004. Once each chamber passes all the bills, the House and Senate must work to reconcile their individual versions. Assuming that agreement can be reached, they are then sent to the President for his signature.

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Economy and Jobs Watch

This past week, the Federal Reserve Board (Fed) lowered a key interest rate, suggesting that the Fed is not confident about the quality of the “economic stimulus” in the recently passed tax cut package.

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