In the last 10 years, the Congress has expanded federal efforts to promote employment for people with more severe disabilities by creating new programs, expanding existing programs, and providing employment protections. In the past, social attitudes toward people with mental retardation or psychiatric conditions often labeled them as unemployable outside of institutions or sheltered workshops and thus unable to benefit from job training or vocational rehabilitation. However, recent advances in assistive technology, particularly in computers, have made many personal limitations less prohibitive barriers to work. Voice recognition software, for example, allows those who do not have use of their hands to produce documents on a computer. In addition, the development of supported employment, in which ongoing on-the-job support is provided to people with disabilities through a job coach, has demonstrated that many people previously considered unemployable could work alongside people without disabilities. In response to these developments, the Congress has created new programs to promote the increased use of assistive technology and to provide states with funding specifically designated for supported employment. In addition, the Congress has amended the Rehabilitation Act to strengthen the requirement that states serve individuals with severe disabilities. In 1990, the Congress provided educational and employment protections to people with disabilities. For example, ADA prohibited employment discrimination on the basis of disability by state and local governments and many private-sector employers, as long as the person was qualified and able to perform the essential job functions “with or without reasonable accommodation.” Similarly, in the Individuals With Disabilities Education Act (IDEA), the Congress mandated that all children with disabilities be provided a “free, appropriate public education,” and courts interpreting the law have required that this education be provided in “the least restrictive environment.” This provision emphasized a clear presumption that children with disabilities should be mainstreamed—that is, taught in regular classrooms when possible. Over many years, public concern and congressional action have produced a broad continuum of services and policies designed to help people with disabilities. We identified 19 different federal departments or agencies that administered 130 programs targeting people with disabilities in 1994.These programs ranged from those for toddlers with disabilities, for example, Early Intervention State Grants for Infants and Toddlers With Disabilities—to those for the elderly with disabilities, for example, Independent Living Services for Older Blind Individuals. These many programs provided education, health care, and books and assisted with employment. (For a list of these programs, as well as targeting and funding information, see app. II.) Of the 130 programs, 69 were wholly targeted (targeted exclusively) to people with disabilities; the others were partially targeted—that is, they provided services to a wider clientele but nonetheless gave some priority or preference to people with disabilities. In 1994, the federal government spent over $60 billion through these 69 wholly targeted programs, including efforts such as the Disabled Veterans’ Outreach program, which helps disabled veterans. In addition, people with disabilities benefited from between $81 billion and $184 billion in federal spending through 61 partially targeted programs in areas such as income support, housing, and transportation. The federal commitment to helping people with disabilities has also attempted to facilitate their employment both directly and indirectly. Of the 130 programs available in 1994, 26 provided direct employment services such as skills training and job search assistance. For example, the Supported Employment program established by the Rehabilitation Act is employment focused because it provided training and placement services to people with severe disabilities. (Apps. II and III provide details about these programs.) Employment-focused programs in 1994 provided between $2.5 billion and $6.1 billion in services targeted to people with disabilities. In addition, we identified 57 of 130 programs as related to employment—that is, although not directed specifically at employment, these programs may have indirectly affected employment outcomes. These include federal programs that help finance purchases of assistive technology, such as specially designed wheelchairs or computer software, which are employment related because they can enable an individual with a disability to enter the workplace. In 1994, employment-related programs provided between $62 billion and $156 billion in services targeted to people with disabilities. The remaining 47 of the 130 federal programs were unrelated to employment. Federal efforts to promote early intervention services for toddlers with disabilities are an example of these types of programs. (See fig. 1.) Employment-related programs indirectly facilitate work through services such as assistive technology, transportation, health insurances, and the like. Many of these employment-focused and -related programs provided a specific service rather than a broad range of services to people with disabilities. For example, the Department of Transportation (DOT) funds capital improvements for local transit systems and also provides funds for paratransit services. The Job Training Partnership Act (JTPA) program, although only partially targeted to people with disabilities, emphasizes shorter term skill training and provides only a limited range and amount of support services. Important exceptions to this are the vocational rehabilitation programs; both the federal-state Vocational Rehabilitation program and the Veterans’ Vocational Rehabilitation program can provide a wide variety of services designed to promote employment. Although the federal government provides funds for all 130 programs, the extent of the federal role in their administration varies considerably. Federal programs provide assistance directly to the individual or indirectly through other public or private service providers at the state and local levels. Programs that provide assistance indirectly often involve limited responsibilities for the federal government in administering services. For some programs, assistance or services flow directly from the federal government to the individual with a disability. For example, income support payments under the Social Security Disability Insurance (DI) program flow directly to beneficiaries, and phone calls requesting information from the Education Department’s Information Clearinghouse are a direct service from the federal government. The largest federal programs in terms of spending—the income maintenance and health care programs—generally deliver assistance directly to individuals; however, if these programs are excluded, states receive a substantial amount of the funds provided through disability programs. For many programs, assistance or services flow indirectly from the federal government through state governments, which are responsible for delivering services to individuals with disabilities. For example, under the federal-state Vocational Rehabilitation program, the federal government allocates program funds to the states, which have authority to deliver services. For some programs, the states may provide funds to other entities, such as local governments or nonprofit or private agencies, to administer services. In the states we visited, funds from federal disability programs were further distributed to a wide range of state agencies— departments of rehabilitation services, employment and training, developmental disabilities, mental health, education, and those for the deaf and hard of hearing, or the blind, for example. For many other programs, assistance or services flow indirectly from the federal government to other organizations such as state or local agencies or nonprofit or private organizations. For example, the Projects With Industry (PWI) program may be administered through other public, private, or nonprofit agencies. Under these programs, federal agencies allocate grants on the basis of the application or proposal submitted by an organization or agency, which is then responsible for providing services. Federal funds allocated through these programs provide support for special projects in delivering disability services; others support research or train state or local professionals to work more effectively with people with disabilities. (See fig. 2.) Indirect - Government Agencies Only (Nonfederal) Although many federal programs have decentralized the provision of services to state governments, the programs have adopted a variety of funding mechanisms to do so, including funding formulas based on different criteria as well as varying procedures for awarding grants. The variation in these funding mechanisms affects the distribution of federal funds to states. States may receive more or less money depending on the size and characteristics of their targeted population as well as their success in pursuing grants and other awarded monies. In our analysis of statewide 1990 funding data for the eight wholly targeted employment- focused programs and statewide 1990 census data, we found that the disabled working-age population as a percentage of the total working-age population varied between 7 and 15 percent. Federal programs distributed to states between $200 and $1,100 per working-age person with a disability. Some states like Florida, Georgia, and South Carolina received between $200 and $350 per working-age person with a disability; sparsely populated states like Wyoming and Alaska received between $800 and $1,100 per working-age person with a disability. (See app. IV.) Promoting employment is one of the most important challenges confronting federal assistance to people with disabilities. People with disabilities constitute an underutilized workforce and a potential resource to the U.S. economy. Surveys have estimated that 18 to 40 percent of people with disabilities have jobs—far below the 73 percent of people without impairments. Yet in these surveys, most individuals with disabilities indicated that their disability did not prevent them from working. For example, although 8.2 percent of individuals were identified as having a work disability in the 1990 census, only a little over half of those said that they could not work. Increased employment would alleviate the poor economic condition of people with disabilities, many of whom struggle to get by on marginal resources. According to 1990 census estimates, 22 percent of working-age people with disabilities live on or below the poverty line, and an additional 12 percent can be classified as “near poor” (with incomes between 101 and 150 percent of the poverty line). Not surprisingly, many people with disabilities turn to public assistance. In 1992, approximately 3.5 million disabled workers participated in the Social Security Administration’s (SSA) DI program, and approximately 4 million people with disabilities participated in the Supplemental Security Income (SSI) program. Aside from Social Security income, census figures indicate that people with disabilities were also more likely to receive other forms of public assistance. Only 2 percent of working-age people without disabilities— those aged 16 to 64—reported receiving public assistance income, compared with 15 percent of working-age people with disabilities. Our discussions with disability experts, consumers, and officials from public and private agencies identified multiple barriers that contribute to the relatively low employment rates for people with disabilities.