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So that is why I asked that question about your policy on the regulations. Will they have a focus on child development?

Ms. BARNHART. I know that you are probably more familiar with the statute than I, Mr. Chairman, but I would just like to point out the things that I think would be responsive to your particular concerns. Certainly we are going to be guided by the statute; that is, there is a requirement that 25 percent of the funds that are available under the block grant be reserved specifically for improving quality and, I believe, after-school programs, before- and afterschool programs for children. .

In addition to that, there are requirements that States have to have minimum health and safety standards.

That does not get at the education aspect that you just mentioned. I recognize that, Mr. Chairman. I was just trying to recall

Senator HARKIN. And the minimum standard is not what we are talking about, either. That is obviously in the legislation. I am talking about something beyond the minimum standards, outreach programs or actually health promotion programs that might involve not only the child itself but the child's parents, too.

Ms. BARNHART. As you know, under the block grants States would have a tremendous amount of flexibility, too, in terms of pursuing different kinds of activities like that and making funding determinations about how they would like to use that 25 percent in terms of improving quality. I think clearly the things that you have talked about would fall under the general idea of improving the quality of child care.

I would say to you, too, Mr. Chairman, not just as the individual who is charged with responsibility for the child care programs and the other programs that I administer for helping families, that I am also the mother of a 2-year-old and appreciate very dramatically the parental concerns that people have about placing their children in someone else's care when they are at work.

Senator HARKIN. I repeat for emphasis' sake that you will be hearing from me and in turn from the subcommittee.

I think quality of care has to do with environment, safety, the individuals taking care of the child, how many are in a place you cannot pack 50 kids in a room-all those kinds of things that lend themselves to quality of care. I am talking about another aspect of that, and that is the development of the child and the preventive health and educational aspects that impact a child in a child care situation.

You are right, the States do have discretion; but again, these are Federal moneys that are funding this, and I think we have an obligation to set the agenda or to at least tell the States and others what we intend to do with this money. I am saying that one of the aspects that we want to push is health care, preventive health care, and education.

Ms. BARNHART. I do know that health promotion for young children is a priority of Secretary Sullivan, so one of the things we could look at doing is coordinating with the Public Health Service in carrying out that legislation.

In addition, I would mention that just generally in addressing developmental concerns that you have, we are working closely with Head Start. I know Assistant Secretary Mary Gall is going to be appearing before you at the completion of my testimony. We are working through the JOBS Program to try to provide wraparound child care tied in with the Head Start Program for mothers who are participating in the JOBS Program.

So one of the things that we are trying to do, Mr. Chairman, is to link where we can to take advantage of the existing programs that are there to promote good care for children as well.

STATE LEGALIZATION IMPACT ASSISTANCE GRANTS Senator HARKIN. Let me move to another topic, one of our favorites, SLIAG, as it is known. You are proposing total elimination of the $1.1 billion that is left. Part of the rationale, I understand, is that States have not drawn down over $1 billion of funds tha we granted before. In addition, the $271 million appropriated in fiscal year 1991 will soon be granted to the States, raising the total availability to about $1.3 billion.

Will this unspent money be enough to pay all of the legitimate billings expected to be submitted by the States in fiscal year 1992?

Ms. BARNHART. Mr. Chairman, we believe that it will be sufficient to cover most of the expenses. The latest estimates that we have indicate that States will probably submit allowable billings for somewhere around $770 million. I can provide precise figures for the record.

Looking at the $1.2 or $1.3 billion that will be available to them, that would leave about $600 million available for fiscal year 1992. We think that should be sufficient to cover most of the costs.

I would point out a couple of things that I think are important, Mr. Chairman, in considering our rescission request for SLIAG. As you probably know better than I, when the program was first start ed, I was not here, but we in the executive branch, along with the Congress and the States, were in the position of trying to do the best guessing we could do, in terms of what was going to be need ed, to reimburse States for the costs that were incurred as a resul of increased demands from the SLIAG population.

In fact, over time what we have seen is that we really overesti mated, and the States overestimated as well, first of all, the usage rate of the eligible legalized aliens in terms of public assistanc programs at the State and local level, as well as programs that ar federally matched. We are just not seeing the demand that w thought we were going to see. State drawdowns have been slowe than anticipated.

I think at this point in time it is particularly important to realiz that most of the SLIAG eligibles have been in the country for ove 10 years, and it is a working population. That is clearly somethin we have seen. They found jobs. Many of them were working whe the legislation came into effect, as you know. That was, in larg measure, part of the purpose of the legislation, to recognize tha fact and allow that to continue. They had developed language skill to some extent and were able to work toward permanent residen and move into employment. So it is a working, contributing popu lation, not a long-term dependent population.

I think all these factors are important in looking at the big picture and considering our request for a rescission.

CAN THE SLIAG BILLS BE COVERED? Senator HARKIN. Ms. Barnhart, the staff and I were just discussing SLIAG. As you know, it always comes as a problem with those individuals in whose States it has the biggest impact, and I have to be clear on whether or not this will, indeed, in your estimation cover the bills that will be coming in in 1992.

Again, I ask you, do you believe that the unspent money that we have available plus what we appropriated in 1991 will be enough to pay the bills that will come in in 1992? Mr. Williams, do you have any thoughts on that? ? Mr. WILLIAMS. Nothing more than Ms. Barnhart already indicated to you. I thought I heard her say that that was sufficient. Senator HARKIN. I heard her say it might cover most bills. Ms. BARNHART. Most, Mr. Chairman. Senator HARKIN. What does that mean? Does it mean 51 percent, 71 percent, 91 percent, 99 percent, or 100 percent?

Ms. BARNHART. Mr. Chairman, it is impossible for me to give you an absolute assurance that it would cover all the bills because we really do not know now what States would claim in fiscal year 1992. Based on our best estimate, however, we think it would cover somewhere between 65 and 70 percent of the bills that States would submit.

Senator HARKIN. What would you do with the shortfall? Ms. BARNHART. I think that many of the programs that the SLIAG individuals participate in at the State and local level they would have been able to participate in and receive benefits from regardless

of the passage of the Immigration Reform and Control Act, because most State and local programs do not check citizenship, do not have residency requirements. So they would have been entitled to receive the benefits under those programs with or without the passage of the legislation. I think that is important in taking into consideration the request for fiscal year 1992.

I just received a note from staff. I stand corrected. I was correct in saying it was 65 to 70 percent for the life of the program in terms of reimbursement; 90 percent is the estimate for fiscal year 1992. That is a huge difference.

Senator HARKIN. That sure makes me feel a lot better.
Ms. BARNHART. It makes me feel better, too, Mr. Chairman.


Senator HARKIN. Ninety percent is much better. I have one more question, and then I will turn to Senator Gorton. It has to do with LIHEAP. We created this new contingency fund ast year of $200 million, and it came through with $195 million out of conference. Funds were recently distributed since that trigzer level was reached, which is 20 percent. The price has to be 20 percent above the average of the previous 4 years.

Now you are requesting a continuation of this contingency fund Ativity, for which I want to thank you. I just want to know the rationale for only requesting $100 million when we had $195 mil. lion last year.

Do I understand all that $195 million went out? All the $195 million went out. So what is the rationale for only $100 million for next year in the contingency fund?

Ms. BARNHART. Mr. Chairman, the reason that we requested $100 million in the contingency fund and not $195 million is actu ally the same reasoning for requesting a reduction in the LIHEAP Program in general; that is, operating in the current budget envi ronment with a limit on discretionary programs, choices have to be made in the Department of Health and Human Services, as in a number of other departments.

The LIHEAP Program, as you know, has traditionaily been a supplemental program. Two-thirds of the people that receive LIHEAP benefits also receive assistance from other public assist ance programs like AFDC, food stamps, public or subsidized hous ing, and so forth. We believe that the request for LIHEAP reflect a socially and fiscally responsible request in terms of helping low income households meet their energy costs.

Senator HARKIN. Again, I understand it is part of a mix and tha they receive other benefits, but the other benefits are not nec essarily increasing all that much next year, either. Unless globa warming continues and we do not need the money or if oil price continue to drop, I am concerned that that may not be enough i that contingency fund for next year.

Ms. BARNHART. I would make one other point, too, Mr. Chai man; that is, we are basically keeping the same rules in terms release of the contingency dollars that the Congress laid out fo this current fiscal year. I see you nodding, so obviously you are f. miliar with how the contingency operates.

Once the trigger is reached, we actually release all funds so tha we have no basis for not releasing all funds in the contingency an the contingency pool. This year we had $195 million, so once w reached the trigger we released all $195 million. Release of fun is not necessarily reflective of a particular demand for all of th $195 million.

That is not to suggest that States cannot use it, because I a sure they can always use whatever funds they are provided, b just that there is no necessary correlation between need and he much of the funds are released, once the trigger is hit. They a all released.

Senator HARKIN. Are you suggesting we might want to look some kind of sliding scale formula?

Ms. BARNHART. A sliding scale in terms of how severe the i crease is?

Senator HARKIN. The use of the trigger, depending upon wh percentage over the previous 4 years that different funds might released,

the percentage of funds. Ms. BARNHART. That certainly would be a possibility. To be ho est, I had not actually thought of that. Generally, when we sta talking about formulas in the LIHEAP Program we generally pz vide technical assistance and do not get into making r ommendations; but we could certainly have further discussio with your staff about that.

LIHEAP: NUMBER OF PEOPLE SERVED Senator HARKIN. Let us discuss that further.

Again, just to close out my remarks on LIHEAP, those of us who represent States where we have variable winters where it could be really cold for a period of time or not so cold, we understand that there are other assistance programs available that people get, but right now nationwide under the 1992 proposal that you are submitting, about 2 million fewer people would be served even though the current funding level only helps 23 percent of the eligible population.

The portion of the heating bill now covered for eligible recipients has declined from 22 percent in fiscal year 1981 to 14 percent in fiscal year 1989. Ms. BARNHART. May I make a few comments, Mr. Chairman? Senator HARKIN. Absolutely.

Ms. BARNHART. With regard to your last point, you are correct that the proportion of heating benefits that LIHEAP covers for that eligible population has declined from 22 percent to 14 percent, but I think it is important to point out that over that same time period the out-of-pocket expenditures for low-income households which receive LIHEAP as a percent of their income has declined.

In fact, the situation is such that even though the proportion of payment that LIHEAP covers has decreased, the burden to the individual households has decreased at a faster rate and, in fact, there is a 0.7 percent net increase in terms of available funds to the household.

Senator HARKIN. Due to what?

Ms. BARNHART. Due to the fact that as a proportion of their family income, their individual burden for paying for home energy has reduced significantly over the last several years.

I could provide precise numbers for the record, but

Senator HARKIN, I wonder why that is. Why is that? Have oil prices declined that much in 10 years?

Ms. BARNHART. Both prices and consumption have been lowered. I think basically people have become increasingly conscious of the fact that conservation and weatherization activities do result in lower energy prices, and prices are down as well, Mr. Chairman.

As I say, we could provide the numbers laying out that situation for you for the record.

Senator HARKIN. That might be interesting. You say it is seventenths of 1 percent net?

Ms. BARNHART. Yes; net gain.

Senator HARKIN. When you say net, I assume you have taken inflation into account.

Ms. BARNHART. Yes; I believe we have in terms of actual constant dollars.

Senator HARKIN. I would like to see those figures. (The information follows:)

LIHEAP Tables 1 and 2 below present data on average energy prices expressed in current and constant dollars per mmbtu. Energy prices are compared below between 1985, the year of highest federal funding of LIHEAP, and 1989, the most recent year in hich annual fuel prices are available.

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