Good afternoon. Thank you for coming. I am pleased today to announce President Bush's fiscal year 2003 budget request for the Department of Education.

During his State of the Union address last week, President Bush highlighted three priorities: protecting the security of our nation, creating a sustained strategy for our homeland security, and offering economic security to the American people. Strong schools and quality education opportunities play a role in each of these endeavors, and President Bush has proposed a generous budget for education in 2003.

The increases in our budget will not be of the magnitude of the defense, homeland security and economic recovery increases, but they will build upon the series of major increases that have led to a more than doubling in this agency's discretionary budget since 1996. More important, the president's request will offer states, schools and families the resources they need to implement the changes called for in the No Child Left Behind Act signed into law last month.

President Bush has requested $50.3 billion in discretionary appropriations for the Department of Education for fiscal year 2003—an increase of $1.4 billion or 2.8 percent over the 2002 enacted level.

With the passage of the No Child Left Behind Act, however, schools and school districts will benefit from more than the increased levels of funding for federal programs. With the changes in the new law, what used to be federal spending programs are now federal investments in improving student achievement.

The following are some highlights of the investments we are seeking:

Implementing No Child Left Behind

To help states and school districts to implement the new No Child Left Behind Act President Bush's budget request targets funds to the poor and minority students who are most likely to be left behind by our education system. To that end, our request includes $11.4 billion for Title I grants to local education agencies to give states and school districts additional resources to turn around low-performing schools, improve teacher quality, and ensure that no child is trapped in a failing school. This increase of $1 billion will be allocated through the Targeted Grants formula in an effort to put a larger share of those funds into America's highest-poverty schools.

We also are asking for a $100 million increase for Reading First State Grants, and for level funding for the related Early Reading First program to make sure that every American child can read well by the end of the third grade. With this request President Bush will increase the federal investment in reading by more than 333 percent since the start of his administration and lay the foundations for learning in all subjects.

To help increase the availability of evidence-based research on proven education practices and in connection with the reauthorization proposal that will be transmitted to Congress shortly, the president is requesting $175 million for research and dissemination, an increase of $53.2 million over 2002 funding levels, or almost 44 percent.

And to support state efforts to meet the annual assessment requirements of the new law, states will receive $387 million for the development and implementation of annual assessments aligned to state standards in reading and math.

In addition, the president's budget request includes continuing support for the flexible state grant programs created by the No Child Left Behind Act, including $2.85 billion for Improving Teacher Quality State Grants, $700.5 million for Educational Technology State Grants, $472 million for Safe and Drug-Free Schools and Communities State Grants, and $665 million for English Language Acquisition State Grants.

Expanding Options for Parents

Through his budget request for this agency President Bush is also extending support for one of the basic principles of No Child Left Behind-expanding options for parents whose children are trapped in failing schools. President Bush knows that when parents have the information and options they need to make the right choices for their children's education, our schools and our children will succeed.

Under the No Child Left Behind Act, parents will receive information on the annual progress of their children's school as well as the option of transferring them to a better public school or obtaining supplemental education services if that school fails to meet state standards. To further enhance these options, our 2003 budget request includes $50 million for a new Choice Demonstration Fund that will support research projects to develop, implement and evaluate innovative approaches to providing parents with expanded school choice options, including both private and public school choice.

Our budget request will also continue to support public school choice through $25 million in grants to states and school districts to increase the capacity for parental choice, and $200 million in continued support for planning and development of charter schools. In addition, we are proposing $100 million for the Credit Enhancement for Charter School Facilities program that was authorized last year but did not receive an appropriation. A major obstacle to the creation of charter schools is their limited ability to obtain suitable academic facilities. This program supports competitive grants to public and nonprofit entities to help charter schools obtain loan guarantees, insure debt, and encourage private lending.

In addition to discretionary programs within this agency, President Bush is also proposing a new refundable tax credit for parents transferring a child from a failing public school. With the new tax credit, if a student's regular public school is identified as a failing school, parents would be able to transfer the student to another public or private school and receive a credit of 50 percent of the first $5,000 in tuition, fees, and transportation costs. This budget request also includes a renewed effort to create a tax deduction for teacher to allow them to deduct up to $400 in out-of-pocket classroom expenses such as books, supplies, equipment and some professional training programs.

Postsecondary Education

As we change our K-12 education system so that it helps poor and minority students reach challenging state academic standards, this agency is also working to provide those students with high-quality postsecondary education opportunities.

To encourage America's college and university students to use their degrees in America's classrooms, President Bush is again seeking to expand loan forgiveness for highly qualified math, science and special education teachers who are serving low income communities from $5,000 to a maximum of $17,500.

The president's 2003 budget also includes support for several programs that ensure equal access to quality postsecondary education opportunities for all American students, including increased support for Historically Black Colleges and Universities and Graduate Institutions and Hispanic-Serving Institutions, continuing support for GEAR UP and TRIO and $54.9 billion in expanded federal student financial assistance for grants, loans and work-study activities-an increase of 5 percent over 2002 funding levels.

One of President Bush's foremost priorities in higher education is the Pell Grant program that serves America's neediest college-bound students. President Bush is seeking $10.9 billion for the Pell Grant program, an increase of $549 million or 5.3 percent. With this support we estimate that approximately 4.5 million students will be able to receive Pell Grants, and that we can award a maximum Pell Grant of $4,000.

To provide that same level of support to students this year, President Bush is also is seeking a $1.3 billion supplemental request for 2002 to address the underfunding of Pell Grants in the 2002 Department of Education Appropriations Act. In that law, Congress set the maximum award level at $4,000 per student but did not appropriate sufficient funds to reach that goal based upon our agency's enrollment projections.

Continued Support for Populations Too Often Left Behind

President Bush's commitment to leave no child behind extends beyond the programs I have just described to our other programs serving students who are too often left behind. For fiscal year 2003, he is proposing a $1 billion increase in federal support for state and local efforts to help children with disabilities meet the same challenging state academic standards as other children. This is a 13 percent increase for a program that has increased by more than 142 percent during the past five years, and marks the second time that President Bush has requested a $1 billion increase for this program-the largest-ever presidential request.

To sustain his commitment to school districts that are directly impacted by federal government activities, President Bush is also requesting more than $1.1 billion for Impact Aid programs to alleviate the financial burden that children living on federal property across the country may place on these schools.

The president's budget request also includes continued support for vocational and adult education programs to help Americans of all ages acquire the combination of skills and knowledge they need to participate in today's economy by providing more than $1.3 billion to improve vocational education activities and the monitoring and evaluation of post-program outcomes for vocational students.

The 2003 request also supports the president's New Freedom Initiative. To help individuals with disabilities get and keep jobs, our budget request includes $2.6 billion for the Vocational Rehabilitation State Grants program. This is an increase of $134.9 million or 5.4 percent that includes a mandatory inflation increase as well as the consolidation of several small overlapping categorical programs as part of this administration's effort to enhance the effectiveness of government training and employment programs.

Department Management

Finally, I would like to comment on our continued commitment as an agency to making sure that the funds President Bush has requested for this agency are used to effectively support the education of America's students. We have made great strides over the past year in addressing longstanding problems and implementing President Bush's 2002 Management Agenda by developing and undertaking a long-range action plan for improving Department management-our Blueprint for Management Excellence.

Establishing that plan was an important first step, and we continue to make progress toward the goals set forth in the Blueprint for improved management and monitoring of Department programs and the elimination of management deficiencies and susceptibilities to fraud, waste and abuse of taxpayer dollars.

Conclusion

These are several highlights of our overall request, and I, along with our Undersecretary Gene Hickok and our Director of Budget Services Tom Skelly, will be happy to answer any questions you may have.

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