This paper describes selected policy alternatives for the federal government in considering possible revisions to the funding provisions contained in the Individuals with Disabilities Education Act. Following an introductory section, Section 2 examines demographic and fiscal trends that point to increased pressure on the nation's overall system of funding special education programs and services. Section 3 discusses the federal role in special education financing. Section 4 examines special education reform efforts across the states vis a vis their possible relationship to the need for federal funding reform. Section 5 examines population-based funding as a potential federal policy option. Section 6 presents a possible poverty adjustment to the Part B allocation. Section 7 presents other possible modifications to the Part B funding mechanism. Section 8 describes ways in which the allocation or withholding of Part B funds might be used to directly influence state policies. Section 9 explores the proposal to combine funding under the IDEA and the Chapter 1 Handicapped program (Public Law 89-313). The paper concludes with a discussion of federal special education policy goals, their connection to federal fiscal policy, and other federal options for promoting these objectives. (Contains approximately 60 references.) (JDD)