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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 services, Senator 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 hearing, 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 achiev. ing 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 $1 billion in the next 2 years. Is that right?

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Mr. WILLIAMS. Under the definition of funding all eligible children for 1 year before they enter school, I think we would need about $3.1 billion to fund that commitment.

Senator HARKIN. You will need $3.1 billion-
Mr. WILLIAMS. Yes; $3.1 billion.

Senator HARKIN (continuing). To fund 100 percent of the 4 year olds. That seems to be about right to me, looking at where we are right now. That is about $1 billion more. That means if you ask for $100 million in 1992, then you are going to have to ask for about $400 million in 1993 and another $500 or $600 million in 1994.

Ms. GALL. Senator, as you know, the administration has asked for higher amounts in the past couple of years, but I want to make it very clearly understood that the reason we are asking for a lesser amount right now is not a lack of interest in the program by any means. It is a means of putting on the brakes somewhat so that we can take a look at where we are in expansion, quality, and maintenance of services to our families and to our children.

We feel it is very important to slow down somewhat so that we can make sure that all systems are in place so that we can accelerate down the road once again.

I think that is sound management, Senator. We need to take a look at where we are, how the grantees are doing, how they are dealing with the myriad issues related to expansion, and how they are continuing to provide the quality services.

That is a lot for our grantees to take on. We believe they are doing a very good job but we have to give them a bit of breathing space in order to address any issues that may arise.

Senator HARKIN. Ms. Gall, I think that most organizations before they set down goals do an intensive study and survey to see whether or not the goals are achievable. You do not set a goal down that you absolutely cannot achieve. If I set a goal to fly to the Moon in the next 10 years, that is ridiculous. I cannot achieve that goal. You have to have goals that are achievable.

So I can only assume that if the administration's stated goal is to serve all 4 year olds by 1994, that must be an achievable goal. If that is so, why are you putting on brakes now? It seems you have to start/stop, and then you have 2 more years. You are saying you have to take a look to see whether or not they can gear up for this.

I would think that before you set the goal for 1994 you would have had your planners and people out there asking how we can realistically meet this goal. So you are either telling me that the goal is unrealistic and cannot be met or that the goal is realistic but is going to be met by flooding the program in the last year.

Ms. GALL. We are trying to be good managers of this program. While we believe that we have been able to administer the increases and the expansion thus far, we need to take a look at how things are going. We need to make sure that we are able to maintain quality while we have major expansion. It is important to us to take a look at how it is going. That is sound management. If you are a businessman or you are planning a trip to the Moon, you have to stop at some point and take a look at how well your plans have gone and where you go from there.

I think that while we continue to bring new children into the program this year and will do that next year, we are also putting a greater emphasis on quality improvement, and on technical training.

I have met with many of our Head Start directors around the country, and they are meeting challenges that they have not had to address before. Certainly substance abuse has a tremendous impact on the way they do business in the classroom.

It is important to us to have an assessment of how that is going so that we can continue to ensure a quality program. I think that is just good, sound management.

Senator HARKIN. Again, I am a little confused. You can help me out on this. You keep talking about the quality and insuring that the quality of the programs is improving, but, as I understand it from my staff and as I understand it from the past, 25 percent of the funds above the cost-of-living increase is to be available for a quality reserve. Ms. GALL. Yes. Senator HARKIN. You are aware of that? Ms. GALL. Yes.

Senator HARKIN. Inasmuch as the budget request is just short of the cost of living, that does not trigger the 25-percent reserve which you want to useMs. GALL. In 1992.

Senator HARKIN. That is what I am talking about. We are here on the 1992 budget. So when I hear you talking about quality upgrades, I am wondering what is going on.

Ms. GALL. We want to look at this in the context of fiscal year 1991 as well and the kinds of quality improvements that we are talking about in fiscal year 1992. I think you cannot look at 1992 alone without taking a look at what we are doing in 1991 as well.

Senator HARKIN. So the 25 percent was triggered this year?
Ms. GALL. Yes.
Senator HARKIN. So you have, was it 10 percent?
Ms. GALL. In 1991 the mandate for quality was 10 percent of the
total appropriation.

Senator HARKIN. That was triggered, and that was used?
Ms. GALL. Yes, sir.

Senator HARKIN. Now again, let us look at 1992. I assume you used the 10 percent for quality improvement.

Ms. GALL. You bet.

Senator HARKIN. 1992 comes along. To get the 25-percent quality reserve, which is what we are talking about, 1992, your request is just short of the cost of living; therefore, it will not trigger that 25percent reserve. Ms. Gall. That is right. It will not trigger in 1992.

Senator HARKIN. Then how can you insure continued attention to enhancing the quality if you do not trigger that 25-percent reserve? Are you saying that all you did this year was sufficient, you have to do nothing next year?

Ms. GALL. Yes.

Mr. STOVENOUR. Mr. Chairman, one thing to keep in mind is that the $100 million is, of course, over the 1991 level, so the.

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