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WASHINGTON – The Obama administration plans to hand out $500 million in state education grants aimed at helping young children.

Education Secretary Arne Duncan and Health and Human Services Secretary Kathleen Sebelius announced the “Early Learning Challenge” Wednesday. It’s the latest incarnation of the administration’s Race to the Top competition, in which states compete for education money.

Duncan called early learning a critical issue for the country. Sebelius said that the health and financial security of the U.S. will depend on investments made in the first years of a child’s life. She said that kids who fall behind by age 5 won’t be able to compete for future jobs.

Sebelius says that the administration is taking a “holistic” approach, focusing on kids’ health as well as their education.

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