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Bennett Sees 'Minimal' Impact From Deficit-Reduction Plan

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Washington--Supporters of legislation designed to eliminate the federal budget deficit by 1991 have dismissed concerns that the bill would cause disproportionately deep reductions in education spending, as some lawmakers and lobbyists have predicted.

In his first statement on the so-called Gramm-Rudman-Hollings bill, Secretary of Education William J. Bennett said this month that because "non-federal funds provide over 90 percent of the national expenditures for education, any overall reductions in federal education programs ... would in general have minimal effects on education nationwide."

Similarly, the chairman of the Senate Budget Committee said that passage of the bill would not result in education-program cuts as severe as some lobbyists have forecast.

Mr. Bennett's Comments

"A healthy economy, brought about by controlling the federal deficit, will benefit American education most significantly in the long run,'' Mr. Bennett wrote in Nov. 1 letters to Representative Augustus F. Hawkins, chairman of the House Education and Labor Committee, and Representative James M. Jeffords, the committee's senior Republican.

Said Mr. Bennett: "Until the estimate of the deficit and the size and the distribution of the cuts for controllable outlays are determined for any year, we cannot speculate how federal education programs, or the services they provide, might be affected."

Charles B. Saunders Jr., director of government relations for the American Council on Education, expressed shock at the Secretary's comments, which he characterized in a Nov. 6 letter to Representative Hawkins as "gross distortion." He pointed out, for example, that the federal share of all student aid is 75 percent.

John F. Jennings, counsel for the House Education and Labor Committee, said that because much of the federal aid to schools is targeted for the disadvantaged and the handicapped, those special-needs pupils would suffer significantly from spending reductions. "It's not like you are spreading the cut across the board," he said.

The Democratic-controlled House, which has passed its own version of the deficit-reduction bill, and the Republican-controlled Senate last week were deadlocked over the issue and unable to agree on compromise legislation.

Gramm-Rudman-Hollings, which is named after its Senate sponsors, is attached as a rider to a bill, HJ Res 372, that would raise the nation's legal debt limit above $2 trillion.

The rider seeks to eliminate the annual budget deficit in five years by establishing maximum legal deficits and requiring the President and the Congress to make spending cuts if outlays exceed the deficit ceiling by 7 percent this year and 5 percent in subsequent years.

Dire Predictions

Education lobbyists have predicted that because education programs are "forward-funded"--money is authorized a year before it is spent--deep reductions in those budgets would be required to achieve the necessary dollar savings in a given year.

Opponents of the bill are also concerned that because the largest slices of the federal budget--Social Security, defense contracts, and interest on the federal debt--are exempt from the automatic cuts mandated by the bill, education and social programs would suffer deep reductions regardless of the forward-funded provisions.

Under a "worst-case" scenario foreseen by the Committee for Education Funding, a coalition of some 98 education groups, Gramm-Rudman could result in reductions of 40 percent in Chapter 1 compensatory-education funds and 67 percent in special-education programs.

Local education officials, urged by their Washington-based representatives, have used these figures in lobbying members of the Congress against the bill.

Concerns Addressed

But Senator Pete V. Domenici, chairman of the Senate Budget Committee, in a Nov. 1 letter to Senator Robert T. Stafford, chairman of the Senate education subcommittee, said that under Congressional Budget Office assumptions, education programs would not be slashed so severely.

He acknowledged, though, that the bill "does not contain specific language concerning forward-funded programs."

Under the cbo assumptions, said Senator Domenici, if the law mandates 5 percent reductions in spending, for example, then both education outlays and budget authority would be cut by 5 percent. Budget authority would not be reduced deeply to achieve the necessary outlay cut.

Bruce Hunter, director of federal-state relations for the Council of Chief State School Officers, said that Senator Domenici's interpretation--which is supported by Education Department budget analysts--would probably be the one on which the Congress settled.

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