Extracted text

OCR Page 1 of 63
December 17, 1998 MEMORANDUM FOR HILLARY RODHAM CLINTON FROM: Jennifer Klein Nicole Rabner Neera Tanden CC: Melanne Verveer Shirley Sagawa RE: Update on Budget We thought you might like an update on your domestic priorities in the budget process. The budget team held its first meeting with the President today. Children and Families Child Care. We have recommended that the President essentially reintroduce last year's child care initiative -- $7.5 billion for subsidies for working families to pay for child care through the Child Care Development Block Grant, a $3 billion set aside for early childhood education, and $182 million for child care quality. On the tax side, in addition to last year's proposals to expand the Dependent Care Tax Credit (approximately $5 billion) and give a tax credit to businesses who build or expand child care for their employees ($500 million), we have proposed an additional tax credit for parents who stay at home for the first year of their child's life (about $1 billion). The funding for the block grant and the early education fund is mandatory, and there is tremendous competition for mandatory funds, but so far we have preserved the $10.5 billion. The rest of the package seems fairly stable. Parental Leave. In addition to expanding the Family and Medical Leave Act (FMLA) to reach employees of businesses with 25 or more employees (currently the threshold is 50 employees), we have proposed to create an $8 million research fund to study paid leave as well as to update the data in the 1995 national FMLA Commission study on unpaid leave. A few states are already providing leave benefits and others are exploring the issue, yet many unanswered questions remain. This fund will support state activities and study how best to structure paid leave programs. Head Start. The final budget figure is uncertain; OMB and HHS are trying to work out a substantial increase for the program in order to stay on track to meet the President's goal of reaching 1 million children with Head Start services by the year 2002. As you know, the 1998 reauthorization made that goal more expensive to accomplish because it 1