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age 4.

to 5 years old, then you are talking about 2- to 3-million children. When we are looking at serving as many children as possible for a 1-year period of time rather than 3 year olds for a 2-year period of time, then we are looking at a universe of about 825,000 children in any 1 year.

We expect that about 20 percent of those 825,000 children will either be in other early childhood programs, or they may not wish to participate in the program.

Senator HARKIN. What percentage?

Ms. GALL. About 20 percent of the 825,000. Our statistics show us that those children are either involved in other early childhood programs or their parents wish them not to participate.

Including the funding we have proposed for fiscal year 1992, about 59 percent of the eligible children will be served for 1 year before they enter school.

Senator HARKIN. So that is 59 percent of the eligible children age 4?

Ms. GALL. The year before they enter school, and that usually is But, we are not serving 4 year olds exclusively.

Senator HARKIN. You keep focusing on 4 year olds. I am talking about eligible under the law.

Ms. GALL. Eligible under the law would be 3 to 5 year olds, and that is a much larger universe.

Senator HARKIN. That is what I want to find out.
Ms. GALL. Yes, sir.
Senator HARKIN. Can you address yourself to that, please?

Ms. GALL. That is a much larger figure. It represents 2.5-million children 3 to 5 years of age.

Senator HARKIN. Out of that you are serving how many?
Ms. GALL. Approximately 633,000 in 1992.

Senator HARKIN. That comes out to be has anybody got a calculator?

Ms. GALL. That is too much math for me.
Senator HARKIN. I am told by staff it is about 24 or 25 percent.

Ms. GALL. It is actually about 33 percent, yes. That is a significant increase over the past few years.

Senator HARKIN. Fine. Let us stick with that; 33 percent of the eligible population. What is the

total budget for Head Start next year? Ms. GALL. The total budget that we have proposed for fiscal year 1992 is $2.05 billion.

Senator HARKIN. $2 billion, and we are serving 33 percent of those who are eligible under the law?

Ms. GALL. Yes; however, most of the 5 year olds are now in kindergarten, unlike when this law was established.

Senator HARKIN. And there was a $100 million increase in there?
Ms. GALL. That is right.
Senator HARKIN. Now do you see where I got my 60 years?

Ms. GALL. I do not think it would take us 60 years to get that far.

Senator HARKIN. Now wait a second. A $100 million increase per year, if we are at $2 billion and we have 33 percent, that means we are going to need $8 billion.

Ms. GALL. Senator, let me quickly add the reason why

Senator HARKIN. Let me just finish how I got to my 60 years. It is going to take $6 billion more. At $100 million per year, that comes out to about 60 years to reach that eligible universe. I just wanted you to know how I came up with that figure.

Ms. GALL. I understand.

Senator HARKIN. I am saying present-day dollars, not counting for inflation.

Ms. GALL. Let me go back and address the issue of the $100 million for just a minute.

We have asked our Head Start grantees to take on a rapid expansion of the program, bringing large numbers of new children into the program. We have proposed $100 million for fiscal year 1992 because we want to be very careful to ensure that our Head Start grantees have time to prepare for the additional numbers of children, the technical assistance, the training, the quality improvements, the additional space and planning, insurance, additional buses, and a whole host of management issues as well. We are trying to pace this year somewhat to give the grantees some breathing space.

It is like a small businessman you ask to double his clientele and his business. How he does that and how he plans and prepares to do that is very important. We want to ensure that grantees maintain the quality of Head Start programs and provide the services to the children and their families.

I would like to add that in terms of defining expansion, Mr. Chairman, we are not talking about new numbers of children only, but are also talking about additional services that we are going to be providing for those families. We have taken a look at Head Start families over the past few years, and we have noticed a significant increase in substance abuse. There are literacy concerns and the relationship to employability.

If we are to help those families help those children, then we need to be addressing some of these issues, and we are going to be providing additional services to address them.

Expansion also means the preparation of those children and the preparation of the public school system to take on those children. We are expanding our efforts with the Department of Education and the superintendents of schools all across the country to help address transition issues so that our children, once they move into the school system, do not lose those important skills that they have developed in the Head Start Program. We also want families to maintain the parental involvement that we feel is so important to the success of the children.

Senator HARKIN. Ms. Gall, let me read for you Public Law 101501, section 105. If you wish, you can refer to a letter dated March 6, 1991, signed by Senator Kennedy, chairman of the Labor and Human Resources Committee and Congressman Ford, chairman of the House committee, Senator Dodd, who is chairman of the Senate Subcommittee on Children, Family, Drugs and Alcoholism, and Congressman Martinez on the House side.

Here is what the law states: The Secretary shall, prior to using such additional funds to serve an increased number of children, allocate such funds in a manner that makes available the funds

necessary to maintain the level of services provided during the prior year, taking into consideration the percentage change in the Consumer Price Index for all urban consumers as published by the Bureau of Labor and Statistics.

That is section 105.

I hear you saying you are going to use this whole $100 million that we have heard about for expansion. What I want to know is, are you fulfilling the obligations of the law in ensuring that no prior year recipients are cut or reduced and are kept up with the level of inflation under the Consumer Price Index prior to using those moneys for expansion purposes?

Ms. GALL. Included in the $100 million increase that we are requesting for 1992 would be training and technical assistance, the parent-child centers, transition projects, as well as expansion of enrollment. We are very much aware of the provisions of the law and the issues as they address the quality of Head Start.

If you look at our fiscal year 1991 funding level, you will see that we have provided a total of $195 million to address the issue of quality improvement. More than one-half of that will be targeted to salaries and benefits, and that represents an 11.5-percent increase on average for Head Start grantees. Included in that $195 million for quality improvements is roughly $15 million which will address those issues I mentioned earlier of literacy, employability, substance abuse, and so on that are very pressing issues for our Head Start families.

We believe that the fiscal year 1992 program will not be in any way a reduction of the quality or level of services. In fact, given the additional efforts we are going to be putting forth in substance abuse and other issues to address family needs, we will be, in effect, increasing the level of services.

When you consider an 11.5-percent increase for grantees for quality improvement, that is almost double the rate of inflation.

Senator HARKIN. I believe the letter from Senator Kennedy says you really do not have that option. The law is unequivocal. It says to maintain the level of services provided during the prior year. It does not say unless it is more than the rate of inflation or something.

Ms. GALL. We believe very strongly that we are maintaining the quality of programs. In fact, we believe we are increasing the level of services through the $15 million that we are targeting toward new efforts to provide additional services to families.

We do not believe at all that we are reducing servicesSenator HARKIN. Are you talking about in 1992? Ms. GALL. I am talking about the 1991 amount of money, first of all, in terms of addressing the COLA issue and in 1992

Senator HARKIN. I am talking about 1992.

Ms. Gall. In 1992, the $100 million that we will have for Head Start expansion includes a significant portion for additional enrollment of children, but it also includes increased training and technical assistance, funding for parent-child centers, and transition projects.

In addition to that, I do want to mention, Senator, that we have asked our inspector general to help us review our Head Start grantees this year. It will be a two-part study late this spring and again in late winter. We will be identifying any particular needs that our Head Start grantees will have that we may not have picked up in our monitoring reviews.

Senator HARKIN. I was just talking to staff here. As I understand it, as I read the law, it says that you cannot serve additional children until you take into account inflation and maintain prior year's level of services to the children you have already served.

Ms. GALL. We have done that. We believe that we have done that.

Senator HARKIN. For 1992?

Ms. Gall. Yes; we believe that we will be maintaining the level of services and that there will be no reduction in services. That is what the act requires us to do, to ensure that there is no negative impact on the level of service for our grantees and for our families and children. We believe that we will not be decreasing any level of services.

Senator HARKIN. Obviously you are saying that some of the money you have in 1991 you have to carry over to 1992.

Ms. GALL. Some of the money will be carried over to 1992, yes. We believe the grantees will want to do that, and they have the authority to do that.

Senator HARKIN. Can you tell us how much you are carrying over?

Ms. GALL. We do not yet know. We will have to wait and see. Senator HARKIN. How soon will you know that?

Ms. Gall. When we begin the funding process. The guidance will be going out in the next month or so, and we will have a better fix on that in late spring, I would think, or in early summer. We would be happy to share that with you.

Senator HARKIN. We would like to see that. We may have to have another short hearing just on Head Start itself.

Ms. GALL. Let me assure you that the issue of quality and maintaining the level of services and, in fact, increasing the services wherever needed is an important issue for all of us.

Senator HARKIN. What is really important is what this carryover is. I will tell you right now, we are going to look at this year, 1991, compared to last year to make sure that the level of service from last year to this year was not diminished in any way, taking into account inflation, the Consumer Price Index and other things, before new people are served. Then, by this summer we will take a look and we will see really how many additional children are going to be served under this $100 million.

Ms. Gall. We would be happy to share any information we gather with you, because our concern as well is to make sure we maintain the level of services for our children and our families. We are very much interested in doing that as well, Senator.

Senator HARKIN. Ms. Gall, does the administration have a goal for when they want to fully fund Head Start? Have there been any stated goals by the administration?

Ms. GALL. Yes; we want to serve as many children as possible at least 1 year prior to their entry to public school. We want to give as many children as possible the experience of Head Start for 1 year, because we feel we can reach more children that way.

Our targeted goal would be
Senator HARKIN. I just do not know if you have.

Ms. GALL. I believe it is 1994 when we would reach the targeted level of 825,000 children less the 20 percent that we are talking about.

Senator HARKIN. So you are saying that your goal by 1994 is just to reach all 4

year

olds? Ms. GALL. To reach children so that they have 1 year's experience in the Head Start Program.

Senator HARKIN. Four year olds?
Ms. GALL. Primarily 4 year olds but also 3 year olds.

Senator HARKIN. What is the funding level needed in 1994 to do that?

Ms. GALL. We would have to get back to you on that.
Senator HARKIN. Would you get back to me on that?
Ms. GALL. Yes; we would be happy to.
[The information follows:)

LETTER FROM MARY SHEILA GALL

MARCH 25, 1991. Hon. Tom HARKIN, Chairman, Subcommittee on Labor, HHS, Education and Related Agencies, Commit

tee on Appropriations, U.S. Senate, Washington, DC. DEAR MR. CHAIRMAN: During the course of questions and answers in conjunction with my appearance before your subcommittee on March 7, 1991, you inquired about the Administration's goal for fully funding the Head Start program. The ensuing discussion focused on the year 1994. After reviewing the transcript of the hear. ing, I have concluded that both a clarification and amplification of my response on this topic is in order. So that the subcommittee may have the benefit of a more complete delineation of the Administration's views, I respectfully request that this letter be included in the permanent record of the hearing.

On February 26, 1990, in announcing the National Goals for Education, the President emphasized six primary goals. The first of these states that "by the year 2000, all children in America will start school ready to learn.” The first stated objective pursuant to this goal declares that "all disadvantaged and disabled children will have access to high quality and developmentally appropriate preschool programs that help prepare children for school.” The President's announcement further notes that "the federal government should work with the states to develop and fully fund early intervention strategies for children. All eligible children should have access to Head Start, Chapter I, or some other successful preschool program with strong parental involvement. Our first priority must be to provide at least one year of preschool for all disadvantaged children.”

The expansion of the Head Start program is one important component of achieving that goal. As you will recall, I observed that as prudent managers, we in the Department have a duty not only to initiate all appropriate means to expand Head Start participation, but to also assure that the program's grantees are fully prepared to accept additional children without sacrificing quality. The wisest, most cost effective investment of increased Federal funds for Head Start is and shall be a major priority.

I very much appreciate the opportunity to clarify the Administration's intentions with regard to this important topic. I thank you for your courtesy in making this letter a part of the permanent record. Sincerely,

MARY SHEILA GALL, Assistant Secretary for Human Development Services.

FUNDING ELIGIBLE CHILDREN Senator HARKIN. Obviously, that is 2 years away. Let us look at it; 59 or 60 percent, so we have to go 40 percent more. Just roughly thinking, we have $2 billion, so 40 percent is about $1 billion when you take into account inflation. So we will need $i billion in the next 2 years. Is that right?

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