This document presents the findings of a study by the Children's Defense Fund (CDF) on the Chapter 1 program of the Education Consolidation Improvement Act and makes recommendations for Congressional action. Overall, budget cuts and legislative changes have weakened the program's effectiveness and are depriving eligible children of its services. Findings include the following: (1) 790,000 fewer children were served by Chapter 1 in 1982-83 than were served by Title I in 1979-80, a three-year decline of 15 percent; (2) high school, kindergarten, math, and summer school Chapter 1 programs were eliminated in 12 States; (3) parent involvement decreased dramatically in 25 States; (4) Federal oversight, guidance, and technical assistance to States and school districts disappeared; and (5) State monitoring and guidance were reduced drastically in 25 States. The following were among the observations made: (1) President Reagan and Congress made a serious mistake when they replaced Title I with Chapter 1 and the changes are destroying the program; (2) Congress should conduct oversight hearings, legislate necessary changes, and increase appropriations; and (3) concerned citizens should gain knowledge of how Chapter 1 is working in their community and act to monitor it. (This document contains seven appendices which include information related to Chapter 1 and Title I requirements, student enrollment, numbers services, and effectiveness.) (KH)