Budget Plan Spares E.D., but Not Its Programs

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Using the seven-year spending plan approved by the House and Senate last month as a guide, Congressional appropriators are beginning the grueling work of paring $894 billion in federal spending in order to balance the federal budget by 2002.

Congressional aides estimated that federal education programs could see their funding drop by more than $4 billion next year. The Education Department's 1995 budget totaled about $32 billion.

The outlook will get clearer this week, when the House Appropriations Subcommittee on Labor, Health and Human Services, and Education unveils its fiscal 1996 spending bill, which covers more than 600 federal programs.

Said one Republican aide: "The numbers are still unfolding, but we're talking about a huge number of program terminations."

The compromise budget resolution, hammered out by a House-Senate conference committee last month, cleared the House June 29 by a vote of 239 to 194, with eight Democrats joining with Republicans to vote in favor. The Senate passed it the same day on a 54-to-46, party-line vote.

For weeks, debate over the plan had fueled gloomy speculation in the education community, particularly given that the House's initial draft had called for terminating the Education Department. The conference committee nixed that idea, and backed off from a list of 150 education programs the House Budget Committee had targeted for elimination.

Still, the resolution's final numbers are sobering. It would provide $48.4 billion in 1996 for the spending category that includes education and training programs, compared with $58.3 billion this year. By 2002, the budget resolution calls for cutting spending on that category 33 percent below current levels.

The resolution translates into a $60 billion allocation for the Labor-H.H.S.-Education subcommittees, which also handle health and other social programs. That is $10 billion less than those panels had to work with for fiscal 1995. Half of all 1996 domestic discretionary-spending cuts would come from programs under those panels' jurisdiction.

A Disaster?

"This budget is a disaster for education," said Gordon M. Ambach, the executive director of the Council of Chief State School Officers. "Any thought that this federal cut can be absorbed by states and localities is absurd."

But Republicans emphasize that their spending plan is intended to erase the federal deficit--a goal that they argue will boost the nation's economic health and save the younger generation from a crushing tax burden.

"We're going to change the direction of this country from bankruptcy to a balanced budget by 2002," said the Senate majority leader, Bob Dole, R-Kan.

In the floor debate, Democrats criticized the G.O.P. proposal to slow Medicare spending while providing for $245 billion in unspecified tax breaks.

"We don't have to have a budget that gives huge tax breaks to people who have it made and take it out of the hide of hard-working middle-income people," said the House minority leader, Richard A. Gephardt, D-Mo.

In June 28 letters to Mr. Dole and Speaker of the House Newt Gingrich, R-Ga., Mr. Clinton said their budget plan "cuts too deeply" into Medicare, Medicaid, and education.

"I cannot accept legislation that will threaten the living standards of American families," he wrote.

The President had weighed in with a 10-year balanced-budget plan that would raise education spending while making cuts in most other areas. (See Education Week, 6/21/95.)

Republicans largely ignored his plan. Mr. Clinton does not have veto power over budget resolutions, which are internal Congressional guidelines, but appropriations bills dividing funds among programs will require his signature.

Those spending bills will be accompanied by a so-called reconciliation bill making money-saving changes in entitlement programs.

Loan Subsidies

The primary student-loan program is the only education entitlement, and the House's budget resolution called for saving $18.7 billion over seven years by ending the policy of paying student-loan interest while borrowers are in college. The Senate bill called for saving $4.4 billion from student-loan programs. The conferees agreed to seek $10 billion in savings over seven years by targeting subsidies to graduate and professional students for cuts.

But it is the House Economic and Educational Opportunities Committee and the Senate Labor and Human Resources Committee that will decide how to meet the mandate to cut $10 billion.

That goal is "reasonable, doable, and consistent with the philosophy of the committee," said its chairman, Rep. Bill Goodling, R-Pa.

Education Department officials have suggested that lawmakers could reap the same level of savings by targeting the profits of lenders who now administer federally backed student loans.

Some 200 college students joined Democratic leaders in Washington last month at a rally denouncing the G.O.P. plan, which could raise the cost of affected loans by 20 percent or more.

Kevin Greary, the president of College Democrats of America, singled out several G.O.P. leaders who had received federal student aid, asking: "It worked for you, why can't it work for us?"

Vol. 14, Issue 40

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