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E.D. Budget Cut by $949 Million--for Now

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Washington--The Education Department's operating budget theoretically lost $949 million last week, but the cut will have few immediate effects, and will not be felt at all if the Congress eventually rescinds it.

Lawmakers missed their Oct. 16 deadline for completing action on the government's budget for fiscal 1990, triggering the across-the-board cuts in most discretionary programs mandated by the Gramm-Rudman-Hollings deficit-reduction law.

In theory, that means the Education Department, which has been operating under a temporary law providing funding at 1989 levels, has $949 million less to spend.

That would mean, for example, a $251-million cut in compensatory education, a $108-million reduction in special-education funding, and a $204.5-million cut in bilingual-education programs.

Once the President signs an appropriations bill covering the department, the 5.3 percent cut would be taken from the spending levels in that bill, slicing about $1 billion from about $19.4 billion in discretionary allocations.

But because almost all education programs are "forward funded," schools and students dependent on federal aid would not feel a pinch for at least nine months, even if the "sequestration" process were not reversed.

Most education funds are actually spent the summer after they are appropriated, according to Sally H. Christensen, director of the department's budget service. Some are spent even later.

If the cuts became permanent, she said, "at least people would know in advance what their levels were going to be for the next school year."

The only major education program that is not forward-funded is impact aid, which would be cut by $40 million under the sequestration order. But even in that program, payments made early in the fiscal year are "preliminary" payments to districts that need the money urgently, and are limited to 75 percent of the past year's payment, Ms. Christensen said.

A permanent sequestration would shrink the final payments to be made next fall.

'Reconciliation' Conference

The Congress is expected to reverse the cuts by enacting all 13 appropriations bills and a "reconciliation" bill that makes required savings through tax changes and changes in the laws governing federal programs.

But Richard G. Darman, director of the Office of Management and Budget, has said that President Bush might veto the reconciliation bill if the Administration finds it less palatable than the Gramm-Rudman cuts.

House-Senate conference committees were appointed last week, but the shape the reconciliation bill would take remained uncertain.

The House had passed a measure that includes a long list of provisions unrelated to deficit reduction, among the most prominent being two competing child-care proposals. (See Education Week, Oct. 11, 1989.)

The Senate passed a bill without extraneous provisions, and Congressional leaders had discussed the possibility of reporting such a "clean bill" to resolve the budget crisis quickly.

Congressional sources said last week, however, that lawmakers intended to negotiate at least some of the additional provisions--including child care--as part of the reconciliation conference.

They said the negotiations may begin this week, but some observers expressed fear that the process could drag on for a month or more.

The appropriations bill covering the departments of Education, Labor, and Health and Human Services could also encounter delays. That bill is facing a Presidential veto because of a provision allowing federal funding for abortions in cases where pregnancy is the result of rape or incest.

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