As part of a series on the legal and governmental foundations governing education of handicapped and gifted children, the booklet focuses on the provision of developmentally appropriate services to handicapped infants and preschool age children and their families. An initial section reviews the literature on the benefits of early intervention in terms of value to children, value to families, social benefits, and economic benefits. Charactertistics of early childhood special education programs are briefly considered in a second section. Federal and state early childhood special education policy are examined in the third and fourth sections, with particular emphasis on P.L. 94-142 (the Education for All Handicapped Children Act) and Section 504 of the Rehabilitation Act of 1973. Discussed are considerations that are essential in framing a public policy, along with the fiscal ramifications of these considerations. (Author/SW)