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OCR Page 1 of 63December 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
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