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Debt-Reduction Bill Said To Threaten Education Funds

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Washington--The deficit-reduction measure approved by the Senate last week could threaten the future of many federal education programs, according to education lobbyists and opponents of the bill.

Drastic reductions in education spending could result from the bill's mandate that the Congress and the President act to eliminate the federal deficit by 1991, said Susan Frost, executive director of the Committee for Education Funding, a coalition of some 98 groups.

She called the measure's potential impact on education programs "awful, really awful."

The Education Department, meanwhile, has sent to the Office of Management and Budget a fiscal 1987 budget that would again leave spending for elementary- and secondary-education programs virtually unchanged, according to reliable sources.

Debt Elimination Sought

Of immediate concern to education lobbyists here is a bill--which has been attached as a rider to a measure to raise the country's debt ceiling above $2 trillion--designed to eradicate the federal budget deficit by 1991.

The legislation, HJ Res 372, would establish maximum allowable deficits for each of the next five years and authorize the President to cut many federal programs when the spending threatened to exceed the prescribed debt level by 7 percent, in the current fiscal year, and by 5 percent in subsequent years.

President Reagan has endorsed the deficit-reduction measure, which, as one Congressional aide observed, appeared to "drop out of the sky" this month and quickly gained momentum. Congressional Democrats, however, have said they are wary of the bill's possibly broad, and as yet unknown, consequences.

"We are proposing to substantially rewrite the Congressional Budget Act of 1974 in the space of 72 hours," said Senator Gary Hart, Democrat of Colorado, on the Senate floor during an unusual Saturday session Oct. 5. "If that is thoughtful legislation, I will eat your hat."

Some the biggest slices of the federal budget--Social Security, nearly half of defense spending, and interest payments on the debt--are exempt from cuts under the plan; this leaves domestic discretionary programs such as education particularly vulnerable to any necessary reductions.

The main sponsors of the bill are Senators Ernest F. Hollings, Democrat of South Carolina, Warren Rudman, Republican of New Hampshire, and Phil Gramm, Republican of Texas. As a Democratic Congressman, Senator Gramm was a leader in the passage of the Omnibus Budget Reconciliation Act of 1981, the main budget-cutting initiative of the Reagan Administration.

House Democratic leaders have strongly criticized the Gramm-Rudman-Hollings proposal, and the House has not passed a similar measure. But Congressional aides predict that a House-Senate conference committee will clear a modified deficit-reduction measure for the President's signature. That committee could meet for the first time this week.

The spending cuts mandated by the bill may be deepest in programs that spend money slowly, such as education. Other highly vulnerable programs include Environmental Protection Agency sewage grants and Veterans Administration construction funds.

The bill, as now written, would result in the "almost total elimination of slow-spending programs like education," according to a letter circulated by Senator Lawton B. Chiles of Florida, the senior Democrat on the Senate Budget Committee.

Most education programs are forward-funded. That is, dollars appropriated for fiscal 1987 are not actually spent until fiscal 1988. Those programs would be hit particularly hard because in order to achieve savings required in fiscal 1987 outlays (money that is spent and that contributes to the annual deficit), the programs' budget authority (the amount available) would have to be cut by a much higher amount in that fiscal year, according to Congressional budget analysts.

Senate leaders were negotiating late last week over technical aspects of the bill, but Congressional sources said that they did not expect new amendments to settle the problem faced by forward-funded programs.

There was universal confusion about the ultimate impact of the Gramm-Rudman-Hollings measure. "The Senate passed something but they don't know what they passed," one observer noted.

But according to a "worst-case" assessment of the bill's effect in fiscal 1987 confirmed by Democratic budget analysts, funding for Chapter 1 would be slashed by 40 percent, for special education by 67 percent, for vocational education by 30 percent, for Pell Grants by 15 percent, and for Supplemental Education Opportunity Grants and work-study grants by 60 percent.

Education lobbyists expect a profoundly harmful effect whether or not this scenario comes to pass. "The difference is between a slow strangulation and bullet through the temple," observed Bruce Hunter, director of state-federal relations for the Council of Chief State School Of-ficers. "And you tell me how you want it."

Educators' concerns are being virtually ignored because of deficit-reduction fever on Capitol Hill, observers noted. But an Education Department budget analyst said the mandated deficit ceilings might be high enough to avoid triggering the across-the-board spending cuts of the President.

Senate Democratic leaders had offered an alternative amendment calling for some tax increases and broader mandated cuts, but their proposal lost by a vote of 40 to 59. The Gramm-Rudman-Hollings measure was then approved by a 75-to-24 vote.

Only four Republicans--including the chairmen of two key education panels, Senators Robert T. Stafford of Vermont and Lowell P. Weicker Jr., of Connecticut--voted against the measure.

"My vote was a protest against these provisions of Gramm-Rudman-Hollings that would unfairly penalize young Americans and handicapped Americans by forcing disproportionate spending cuts in education and handicapped programs," said Senator Stafford.

Education Department Plans

On a separate track, the department has drafted its fiscal 1987 budget plan, a knowledgeable source said, and "it is unlikely that there will be any major changes in funding levels for elementary- and secondary-education programs."

He added, however, that higher-education spending is a far more likely target for spending cuts, and that Administration officials are not close to final decisions on these programs.

For the current fiscal year, the Congress is expected to approve between $5 billion and $5.5 billion for elementary and secondary programs, or about the same level as in fiscal 1985.

The omb reportedly received the Education Department's recommendations about a month ago and will respond to them, and possibly offer alternatives, sometime before Thanksgiving.

Department officials would not disclose planned policy shifts that may be included in the 1987 budget. Undersecretary of Education Gary L. Bauer has said that if the Reagan Administration moves to further reorganize the department--an agency it once sought to eliminate--those changes will be included in a proposed budget plan.

Education-policy changes could also result from the efforts of a working group on "new federalism" within the Cabinet's Domestic Policy Council, according to Administration officials.

Education Department officials, in public statements, have already ruled out spending cuts in some programs--most prominently bilingual education and research.

And they have suggested possible increases in bilingual education, if the Congress accepts Administration policy changes, and in research and data collection, if the White House agrees to the plans of the department research chief, Chester E. Finn Jr.

Other programs now considered safe from the Administration budget axe include Chapter 1 compensatory education, Chapter 2 block grants, vocational education, and special education, according to sources.

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