From eSchool News (http://www.eschoolnews.com/news/showStory.cfm?ArticleID=6102)
"President Bush's 2007 budget proposal would cut the main source of federal funding for school technology out of the budget entirely--but state and local school leaders already are grappling with a sharp reduction in ed-tech funding this fiscal year."
Signed into law at the end of December was a 45% or $200 million reduction in the Enhancing Education Through Technology (EETT) block-grant program. The article states that cuts are mainly affecting "poor, minority students in urban areas and at-rick, low income students in rural areas." The examples of the programs that are going to be cut, interestingly enough, were for instructional software applications--not hardware.