Order Code RL31241
CRS Report for Congress
Received through the CRS Web
Reading First and Early Reading First:
Background and Funding
Updated May 27, 2005
Gail McCallion
Specialist in Labor Economics
Domestic Social Policy Division
Congressional Research Service ˜ The Library of Congress

Reading First and Early Reading First:
Background and Funding
Summary
Most Elementary and Secondary Education Act (ESEA) programs, including the
Reading Excellence Act (REA), expired at the end of FY2000. On December 13 and
18, 2001, respectively, the House and Senate adopted the conference version of H.R.
1, the No Child Left Behind Act. The President signed H.R. 1 into law (P.L. 107-
110) on January 8, 2002. H.R. 1 includes an extension and expansion of the REA,
located in Title I Part B of ESEA, titled “Student Reading Skills Improvement
Grants.” This new Title I Part B of the No Child Left Behind Act has replaced the
Reading Excellence Act with the Reading First and Early Reading First programs,
which are authorized at $900 million and $75 million, respectively, for FY2002 and
such sums as may be needed for the succeeding five fiscal years. FY2005
appropriations for Reading First and Early Reading First were $1.0416 billion and
$104.16 million (including the FY2005 across-the-board reduction), respectively.
The Administration has requested level funding for these programs for FY2006.
Reading First and Early Reading First were created to broaden and expand
existing reading programs to address concerns about student reading achievement
and to try and reach children at younger ages. These concerns were due in part to
research published by the National Research Council and the National Reading
Panel, as well as due to National Assessment of Educational Progress (NAEP) data.
The most recent NAEP results on reading (2003) indicate that only 32% of 4th graders
are at or above the proficient level. For 4th graders eligible for free/reduced-price
lunches, only 15% are at or above the proficient level.
The Reading First program includes both formula grants and targeted assistance
grants to states. For FY2002 and FY2003, 100% of funds, after national reservations,
was allocated to states as formula grants. States are allocated funds in proportion to
the number of children, aged 5 to 17, who reside within the state from families with
incomes below the poverty line. All states receiving funds will receive at least one-
fourth of 1% of the funds distributed to the states. Beginning with FY2004, 10% of
funds in excess of the FY2003 appropriation or $90 million, whichever is less, is
reserved for targeted assistance state grants.
The Early Reading First Program is a competitive grant program with awards
not to exceed six years. Local Educational Agencies (LEAs) eligible for Reading
First grants, and community-based organizations (CBOs) serving preschool-age
children, or combinations of one or more LEAs and or CBOs, may apply for these
grants. This program, among other things, supports professional training, and
provides preschool-age children with greater opportunities for exposure to high-
quality language and literature-rich environments to build pre-reading skills.

Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Reading Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Reading First . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Formula Grants to States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Targeted Assistance Grants to States . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Early Reading First . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Competitive Grants to States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Relationship to Other Relevant Federal Programs . . . . . . . . . . . . . . . . . . . . . 8

Reading First and Early Reading First:
Background and Funding
Introduction
The reauthorization of the Elementary and Secondary Education Act in the No
Child Left Behind Act of 2001 (P.L. 107-110), authorized the Reading First and
Early Reading First programs. This report summarizes the major provisions of these
two programs, and will be updated periodically.
Most ESEA programs, including the Reading Excellence Act (REA), expired
at the end of FY2000.1 President Bush proposed a major reading initiative for ESEA
reauthorization titled “Reading First,” with funding for this new initiative at $5
billion over five years. The major components of the President’s proposal were to:
! Conduct diagnostic testing of children (K-2) to determine those who
need reading help.
! Require reading curriculum funded under this initiative to use
scientifically based reading instruction; in particular by drawing on
the research on reading conducted by the National Reading Panel.
! Fund training for teachers of grades K-2 in how to teach reading.
! Provide extra help in reading to those children in grades K-2 who are
not reading at grade level.
! Conduct ongoing reading assessments for students in grades 3-8 and
link it to an accountability system for states.
The reauthorization of the ESEA incorporates much of the Administration’s
reading proposal. The No Child Left Behind Act includes an extension and
expansion of the REA, titled “Student Reading Skills Improvement Grants” located
in Title I Part B. It replaces the Reading Excellence Act with the Reading First and
Early Reading First programs. Reading First is authorized at $900 million for
FY2002, and such sums as may be necessary for the succeeding 5 fiscal years. Early
Reading First is authorized at $75 million for FY2002 and such sums as may be
necessary for the succeeding five fiscal years. Other literacy programs consolidated
into this new Part B include Even Start (formerly in Title I Part B of the ESEA), 2 and
1 For more on the Reading Excellence Act, see CRS Report RL30663, The Reading
Excellence Act: Implementation Status and Issues
, by Gail McCallion.
2 For more information on Even Start, see CRS Report RL30448, Even Start Family Literacy
Programs: Background and Reauthorization Issues
, by Gail McCallion.

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a new program to assist school libraries, titled “Improving Literacy Through School
Libraries.”3
In contrast with the REA, which was a one time only competitive grant to states,
the Reading First program includes both formula grants (employing a poverty
formula) and targeted grants for states. Additionally, Reading First and Early
Reading First are authorized at higher levels than the REA, with a total first year
authorization and appropriation for both programs of $975 million. The REA was
funded at $286 million in its third and final year of federal funding, FY2001. In
addition, unlike under the REA, all states will receive a share of Reading First funds.
Reading First and Early Reading First, as well as their predecessor, the REA,
were created to broaden and expand existing reading programs to address concerns
about student reading achievement and to try and reach children at younger ages.
The most recent (2003) National Assessment of Education Progress (NAEP) data
indicate that many 4th grade students are not proficient readers.4 These data indicated
that only 32% of 4th graders were at or above the proficient level. For 4th graders
eligible for free/reduced-price lunches, only 15% were at or above the proficient
level.
Reading Research
Reading First and Early Reading First were drafted with the intent of
incorporating the latest scientific understanding on what works in teaching reading.
In this regard, two influential research reports on reading are frequently cited by
practitioners and policy makers working on reading issues. In 1998, the National
Research Council (NRC) published a report titled Preventing Reading Difficulties in
Young Children
. The NRC report examined skill and environmental factors that
facilitate acquisition of reading skills; it did not explicitly investigate how those skills
could be transferred to classroom settings. The NRC report concluded that (1) early
exposure (in the home and in school) to language and books is critical; (2) effective
reading instruction requires well trained preschool and elementary school teachers;
and (3) elementary school teachers should include all of the following components
in reading instruction: alphabetics, reading sight words, techniques in sounding out
letters and words, and achieving fluency and comprehension.
More recently (2000), the National Reading Panel (NRP) issued a report titled
Teaching Children to Read. The NRP was convened by the National Institute of
Child Health and Human Development (NICHD), with the consultation of the U.S.
Department of Education (ED), in response to a congressional charge to review the
3 For more information, see CRS Report RS21284, Improving Literacy Through School
Libraries
, by Bonnie Mangan.
4 “This level (proficient) represents solid academic performance for each grade tested.
Students reaching this level have demonstrated competency over challenging subject matter
including subject-matter knowledge, application of such knowledge to real-word situations,
and analytical skills appropriate to the subject matter.” The National Education Goals
Panel, The Nation’s Report Card: Reading Highlights 2003 (Washington: GPO, 2004), p.
35.

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literature on reading and use it to assess the effectiveness of different techniques for
teaching reading, and whether these techniques were ready to be applied to classroom
settings. The NRP research was intended to build on the earlier research conducted
by the NRC.
The NRP conducted a literature review of studies that met “rigorous scientific
standards in reaching [its] conclusions.” The following instructional topics were
examined by the NRP: phonemic awareness and phonics; fluency; comprehension;
teacher education and reading instruction; and computer technology and reading
instruction. The NRP limited its selection of topics because the volume of reading
research was too extensive for examination of all potential topics. The selected
topics were chosen based on the NRP’s assessment of issues central to reading
instruction and achievement, and based on input received from public forums.
The NRP has been criticized by some for its omission of other topics. In a
minority view attached to the NRP report, one panel member argued that the NRP
early on in its decision making effectively excluded: “any inquiry into the field of
language and literature”; and that the research examined by the NRP would be “of
limited usefulness to teachers, administrators, and policymakers because they fail to
address the key issues that have made elementary schools both a battleground for
advocates of opposing philosophies and a prey for purveyors of ‘quick fixes.’”5
The NRP majority, however, stated that it does not view its research as
exhausting all reading topics that need study; rather, it noted that it believes further
research on reading instruction, including research that examines qualitative data, is
needed: “[T]he Panel identified areas where significantly greater research effort is
needed, and where the quality of the research efforts must improve in order to
determine objectively the effectiveness of different types of reading instruction.”6
In summarizing the implications of its work for the teaching of reading, the NRP
noted that not all the areas it investigated contained sufficient data to reach
conclusions; however, it did find that the data supported the following conclusions:
! Systematic phonics instruction (the teaching of a planned sequence
of phonics elements) is effective for children in grades K-6, and for
children who are having difficulty learning to read. Systematic
phonics instruction was found to be so successful that the NRP
recommended it as appropriate for routine classroom instruction.
! Phonemic awareness (teaching children to associate phonemes with
letters) is a crucial building block for phonics.7
! As early as kindergarten, children benefit significantly from phonics
instruction.
5 Report of the National Reading Panel: Reports of the Subgroups, Minority View of
Joanne Yatvin, 2000.
6 Report of the National Reading Panel, Executive Summary, p. 21.
7 Phonemes are the smallest units of spoken language (the word go, for example, consists
of two phonemes).

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! Children with learning disabilities, low-achieving children, and
those from low socioeconomic levels benefit from systematic
phonics instruction in conjunction with synthetic phonics instruction
(teaching students to convert letters into phonemes and then blend
the phonemes to form words).
! Reading fluency, word recognition, and comprehension are
enhanced by repeated, guided oral reading.
Reading First
The purposes of the Reading First program are:
! To provide assistance to state educational agencies (SEAs) and local
educational agencies (LEAs) in establishing scientifically based
reading programs for children in kindergarten through grade 3.
! To provide assistance to SEAs and LEAs in providing reading
related professional training for teachers, including special education
teachers.
! To provide assistance to SEAs and LEAs in selecting or
administering screening, diagnostic, and classroom-based
instructional reading assessments.
! To provide assistance to SEAs and LEAs in selecting or developing
effective instructional materials, programs, learning systems, and
strategies.
! To strengthen coordination among schools, early literacy programs,
and family literacy programs, in order to improve reading
achievement for all children.
Formula Grants to States. The Reading First program includes both
formula grants and targeted grants to states. For the first two years of the program,
100% of funds, after national reservations, was allocated to states as formula grants.
To receive formula grants, states must submit an application for a six-year period.
States must establish a reading and literacy partnership (or have a preexisting
partnership established under the REA), and must submit a progress report to the
Secretary of the U.S. Department of Education (hereafter, the Secretary) after the first
three years of funding which will be reviewed by the peer review panel (discussed
below). States are also required to provide annual reports on implementation of this
program to the Secretary. States are allocated funds in proportion to the number of
children aged 5-17 from families with incomes below the poverty line who reside
within the state. All states receiving funds will receive at least one-fourth of 1% of
the funds distributed to the states.8 States are required to use at least 80% of the
funds they receive on subgrants to eligible LEAs.
Beginning with FY2004, 10% of funds in excess of the FY2003 appropriation
or $90 million, whichever is less, is reserved for targeted state grants.
8 The percentage of funds allocated to Puerto Rico may not exceed the percentage it received
under Subpart 2 of Part A of ESEA Title I for the preceding fiscal year.

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Other State Uses of Funds. States may use up to 20% of the formula grant
funds they receive for state purposes. Of this 20%, states may use not more than:
! 65% for professional development, strengthening K-3 teacher
training at all public institutions of higher education in the state, and
making recommendations on how state licensure and certification
standards in reading might be improved;
! not more than 25% for technical assistance for LEAs and schools
and for providing expanded opportunities for K-3 students to receive
reading assistance from alternative providers; and
! not more than 10% for planning, administration, and reporting.
National Reservations. One-half of 1% of total appropriations is reserved
for outlying areas; the same amount is also reserved for the Bureau of Indian Affairs.
The Secretary may reserve 2½% or $25 million, whichever is less, for an external
evaluation and national activities. Five million dollars is reserved, in total, for
information dissemination for the Reading First and the Early Reading First
programs.
Peer Review. A peer review panel reviews state applications for grants (both
formula and targeted). The review panel is composed of experts in reading and
professional development. At a minimum the panel shall include three members
selected by each of the following: the Secretary, the National Institute for Literacy
(NIL), the National Research Council of the National Academy of Sciences (NRC),
and the National Institute of Child Health and Human Development (NICHD).
Subgrants to Local Educational Agencies (LEAs). Subgrants are
awarded competitively. Eligible LEAs are among those in the state that have the
highest numbers or percentages of K-3 aged children reading below grade level;
AND have jurisdiction over an empowerment zone or enterprise community;9 OR
have jurisdiction over a significant number or percentage of schools identified for
school improvement under Section 1116(b) (schools that fail to make adequate
progress for two consecutive years by state measures); OR have the highest numbers
or percentages of children counted under Section 1124(c) (a count of poor and other
school-age children for purposes of Title I).
At a minimum, LEAs, receiving grants shall receive a share of total funds that
is proportionate to the share of funds they received under Title I A in the preceding
fiscal year. In making subgrants to LEAs, SEAs shall give priority to LEAs that have
at least 15% of students in each school from families with incomes below the poverty
line; or 6,500 children served by the LEA are from families with incomes below the
poverty line. SEAs shall provide subgrants of sufficient size to enable LEAs to
9 Empowerment zones are defined in Subchapter U of Chapter 1 of the Internal Revenue
Code of 1986, while enterprise zones are defined in Section 701(a)(1) of the Housing and
Community Development Act of 1987. Both are local areas of high poverty that meet
certain eligibility requirements to receive specified forms of aid or regulatory flexibility.
For additional information, see CRS Report RS20381, Empowerment Zones/Enterprise
Communities Program: Overview of Rounds I, II & III
, by Bruce K. Mulock.

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improve reading instruction; and shall provide funds in relation to the number or
percentage of K-3 children reading below grade level.
Eligible Schools. Schools receiving funds must be among those in the LEA
with the highest number or percentage of K-3 students reading below grade level;
AND are identified for school improvement under Section 1116(b); OR have the
highest percentages or numbers of children counted under Section 1124(c).
LEA’s Uses of Funds. LEAs that receive Reading First grants shall use
those funds for the following purposes:
1.
Selecting and administering screening, diagnostic, and classroom-
based instructional reading assessments.
2.
Selecting and implementing a learning system or program of reading
instruction based on scientifically based reading research that
includes the essential components of reading instruction.
3.
Procuring and implementing classroom instructional materials based
on scientifically based reading research.
4.
Providing professional development for teachers of grades K-3, and
special education teachers of grades K-12.
5.
Collecting and summarizing data to document the effectiveness of
these programs; and to accelerate improvement of reading instruction
by identifying successful schools.
6.
Reporting student progress by detailed demographic characteristics.
7.
Promoting reading and library programs that provide access to
stimulating reading material.
LEAs may use Reading First funds for the Prime Time Family Reading Time
program; for training parents and other volunteers as reading tutors; and for assisting
parents to encourage and provide support for their child’s reading development.
LEAs may use not more than 3.5% of formula grant funds for planning and
administration.
Targeted Assistance Grants to States. Beginning with FY2004 Reading
First grants, $90 million, or 10% of funds in excess of the FY2003 appropriation,
whichever is less, is being awarded to states as targeted grants. In FY2004, there is
$3.042 million for targeted grants. States that have been approved to receive formula
grants will be eligible to apply for these targeted grants. These grants are intended
to reward states that are achieving the goals of:
! increasing the percentage of 3rd graders (broken down into subgroups
by detailed demographic characteristics) who are proficient readers;
and
! improving the reading skills of 1st and 2nd graders.
States must meet both of these criteria for two consecutive years to be eligible
for targeted assistance grants. An SEA awarded a targeted assistance grant will
continue to receive these awards for each succeeding year in which the SEA
demonstrates that it is continuing to meet these criteria. SEAs must agree to award

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100% of the targeted grant funds they receive to LEAs. LEAs eligible for formula
grant awards will be eligible to apply for targeted assistance awards. LEAs receiving
targeted assistance grants shall use these funds for the same purposes as for Reading
First formula grants. SEAs receiving targeted assistance grants will receive a share
of the total proportionate to the count of poor children under Section 1124(c)(1)(A).
Early Reading First
There are five stated purposes underlying the Early Reading First program:
(1) To support local efforts to enhance the early language, literacy, and
prereading development of preschool-age children, particularly those from
low-income families.
(2) To provide preschool- age children with cognitive learning opportunities
in high-quality language and literature-rich environments.
(3) To demonstrate language and literacy activities based on scientifically
based reading research that supports (the) age-appropriate development of
pre-reading skills.
(4) To use screening assessments to effectively identify preschool children
who may be at risk for reading failure.
(5) To integrate such scientific reading research-based instructional materials
and literacy activities with existing programs of preschools, child care
agencies and programs, Head Start Centers, and family literacy services.
Competitive Grants to States. The Early Reading First Program is a
competitive grant program with awards not to exceed six years. LEAs eligible for
Reading First grants, as well as other public or private organizations serving
preschool-age children,10 or combinations of one or more of the above, may apply for
these grants. Grantees are required to submit an annual progress report to ED.
National Reservations. The Secretary of the U.S. Department of Education
reserves not more than $3 million for the period beginning October 1, 2002 and
ending September 30, 2006, for an independent evaluation of the effectiveness of this
program. The Secretary must submit an interim report to Congress by October 1,
2004; a final report must be submitted by September 30, 2006. Information
dissemination for Early Reading First is included in the Reading First program.
Peer Review. The same peer review panel convened for evaluating Reading
First applications will review Early Reading First applications except the Early
Reading First legislation specifies that “Such panel shall include, at a minimum, three
individuals ... who are experts in early reading development and early childhood
development.”
10 In addition to LEAs, an eligible applicant means: “one or more public or private
organizations or agencies, acting on behalf of 1 or more programs that serve preschool age
children (such as a program at a Head Start center, a child care program, or a family literacy
program), which organizations or agencies shall be located in a community served by a local
educational agency described in subparagraph (A)....”

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Local Uses of Funds. Recipients of Early Reading First grants shall use the
funds received for the following activities:
! Providing preschool-age children with high-quality oral language
and literature rich environments in which to acquire prereading
skills.
! Providing professional training to early childhood staff that provides
them with scientifically based knowledge of early reading
development.
! Identifying and providing scientifically based language and literacy
activities and instructional materials for preschool-age children.
! Acquiring, providing training for, and implementing scientifically
based screening reading assessments.
! Integrating these instructional materials, activities, tools and
measures into the grant recipients’ programs.
Funding
FY2002 was the first year of funding for Reading First and Early Reading First.
FY2002 appropriations were passed in H.R. 3061, the FY2002 Departments of
Labor, Health and Human Services, and Education and Related Agencies
Appropriations Act. The Reading First and Early Reading First programs received
$900 million and $75 million in funding, respectively, for FY2002. FY2003 funding
was passed in the Consolidated Appropriations Resolution, 2003 (P.L. 108-7).
FY2003 funding for Reading First and Early Reading First was $993.5 million and
$74.5 million (including the FY2003 across-the-board reduction), respectively.
FY2004 funding was passed in the Consolidated Appropriations Act, 2004 (P.L. 108-
199). FY2005 funding was passed in the Consolidated Appropriations Act, 2005
(P.L. 108-447). FY2005 funding for Reading First and Early Reading First was
$1.0416 billion and $104.16 million (including the FY2005 across-the-board
reduction), respectively. The Administration has requested level funding for these
programs for FY2006.
Relationship to Other Relevant Federal Programs
Some of the components of the Reading First and Early Reading First programs
are also present in other federal programs. Many existing federal programs support,
among other things, reading instruction for children in preschool through 3rd grade,
and reading-related professional training for teachers of children in preschool through
3rd grade. However, these are the only programs (along with their predecessor the
REA), solely devoted to this purpose.
Other federal programs that include reading programs as part of the services
provided are: ESEA Title I; The Individuals with Disabilities Education Act; and the
Bilingual Education Act. The Even Start program provides family literacy to low-
income families, and both Even Start and Head Start provide early learning
experiences (including reading readiness) to preschoolers. The Inexpensive Book
Distribution Program’s (reauthorized as Part D-5 of Title V) mission is to encourage
children to read. The Eisenhower Professional Development program (reauthorized

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as part of a new state formula grant program), is a teacher training program.
However, this program had traditionally focused on its math and science priority, not
training in reading instruction