Amendment Seen Spurring Billions In Budget Cuts

By Mark Pitsch — June 03, 1992 1 min read

If a balanced-budget amendment were adopted, billions of dollars would be cut from Education Department programs over the next several years, and other education programs would receive inflation-level increases at best, the House Budget Committee said in a report released last week.

Representative Leon E. Panetta, the California Democrat who chairs the committee, said he commissioned the report to discover the possible consequences of efforts to raise the more than $400 billion that would be needed to balance the budget by 1997, as pending proposals would require. (See Education Week, May 20, 1992.)

The report outlined three scenarios.

Under the first, in which the deficit is cut exclusively by cutting programs, $6 bilion could be pared from work-study, supplemental grants, and Perkins loans, and $355 million could be trimmed from other higher-education grants; the impact-aid and Follow Through programs could be eliminated; and $515 million could be saved from the Eisenhower mathematics and science program, the report predicted.

In addition, it said, $8.6 billion could be saved by replacing the Guaranteed Student Loan program with a direct-loan program--an assumption some observers dispute.

If 33 percent of the amount needed to reduce the deficit were raised through tax hikes, the report postulates, the Eisenhower program could be spared and the government could spare $2 billion to pay interest during the grace period on student loans.

Under the third scenario, in which 50 percent of the needed amount is raised through taxes, Follow Through could also be continued, and impact-aid cuts could be limited to $2.5 billion, eliminating funding for half of the students whose parents live and work on federal property.

Some supporters of a Constitutional amendment requiring a balanced budget, including the Bush Administration, said last week that the mandate could be fulfilled without the cuts and tax increases suggested in the report.

The Congress is expected to vote soon on amendments, which must be approved by two-thirds of each chamber and ratified by three-fourths of the states.

A version of this article appeared in the June 03, 1992 edition of Education Week as Amendment Seen Spurring Billions In Budget Cuts