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Debt-Reduction Bill Hitting Snags, Could Cause Education Cuts

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Washington--House Democratic leaders last week predicted that the Congress would pass a measure to eliminate the U.S. budget deficit by 1991--a move that could sharply reduce federal education spending.

As of last Friday morning, however, a House-Senate conference committee had failed to reach a compromise acceptable to Democrats, who object strenuously to numerous provisions in the measure, known as the Gramm-Rudman-Hollings bill.

The Senate passed it last month as a rider to legislation to lift the debt ceiling above $2 trillion. Senate leaders were reportedly trying to force the House to vote on the Gramm-Rudman measure by opposing a short-term rise of the debt ceiling, which is needed to allow the government to borrow funds to cover its checks.

The failure of House-Senate conferees to negotiate an accord, amid mounting pressure from the White House in support of the budget-cutting bill, will probably lead to passage of the Senate version of the legislation, which has been modified slightly, according to education lobbyists and lawmakers.

"There is going to be a Gramm-Rudman bill," House Speaker Thomas P. O'Neill told reporters, but "not with my support."

The legislation, HJ Res 372, would trigger automatic cuts in federal spending if the projected annual deficit exceeded a limit set in the statute. The cuts would be made by the President if the Congress cannot agree on them.

But about half of the federal budget--including Social Security, defense contracts, and interest on the debt--would be exempt from cuts, leaving education, child-nutrition, and job-training particularly vulnerable to deep reductions.

Senate conferees rejected a Democratic proposal to exempt from cuts programs aimed at the poor, such as Chapter 1 compensatory education and Head Start.

Education lobbyists have feared that because of a "technical glitch''--most of the money for education programs is spent a year after it is approved--a disproportionately large cut in budgets would be re-quired to get actual savings.

Under their "worst-case scenario," the mandated cuts might result, for instance, in reductions of 40 percent in Chapter 1 and 67 percent in special-education programs.

Omnibus Bill on Hold

On another budget-cutting bill, the House completed consideration of its omnibus budget reconciliation act, HR 3500. That bill permanently raises the federal cigarette tax to 16 cents and requires all new state and local government employees to be covered under Medicare.

The Senate, however, did not resume consideration its version of the bill, S 1730. That measure also includes the cigarette tax but requires school districts and other public employers to provide Medicare coverage for all their employees.

Public-employees' unions, including teachers' unions, are unanimously opposed to the Medicare provision, which would require public employees and employers each to contribute 1.45 percent of the employee salaries to Medicare.

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