Cuts Loom as Budget Race Enters Homestretch

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As Congress returns this week from a monthlong recess, lawmakers will enter the dramatic homestretch of an appropriations season that portends re~cord cuts in federal funding for education.

Looming prominently on the list of possibilities is the chance of a partial government shutdown, which could occur if Congress fails to pass spending bills by Oct. 1, the first day of fiscal 1996--or President Clinton carries out his threat to veto some of them.

Education programs are "forward funded," in the language of federal appropriators, so cuts would not be directly felt for about a year, and a temporary federal shutdown might not affect most school districts at all. But the unusually complicated budgetary situation will make for an anxious fall for education lobbyists--and school administrators nationwide--who are awaiting the outcome of the political battle.

"It's going to be chaos," said Adele Robinson, the government-relations director for the National Association of State Boards of Education.

School groups are hoping that education programs will fare better in the Senate this month than they did in the House, where lawmakers passed a $60.9 billion spending bill for programs in the departments of Labor, Health and Human Services, and Education on Aug. 4.

The bill, which passed on a 219-208 vote, would cut discretionary federal spending on education by $3.7 billion, a 15 percent drop from the current fiscal year. And the 1995 education budget was already pared by $574 million when President Clinton and Congressional leaders agreed on a spending-rescissions package in July. (See Education Week, Aug. 2, 1995.)

The House bill would slice Title I funding by $1.1 billion; Head Start by $134 million; impact aid by $83 million; and current funding for the Safe and Drug-Free Schools and Communities ACT by $265 million.

President Clinton has threatened to veto the education spending bill, which he calls a mean-spirited and politically motivated attack on his agenda. It would cut all funding for the Goals 2000: Educate America Act; another appropriations bill--which has also received a veto threat--would kill the AmeriCorps national-service program.

Rep. Bob Livingston, R-La., the chairman of the House Appropriations Committee, responded to criticism with a written statement that accused the president of "fearmongering."~~

"The American people will not buy the administration's efforts to defend the status quo," Mr. Livingston said.

Watching the Senate

The battle is far from over.

On Sept. 12, the Senate Ap~propriations Subcommittee on Labor, Health and Human Services, and Education is scheduled to begin work on its own spending bill.

That panel will have $1.6 billion more to work with than its House counterpart, and an aide said that its chairman, Sen. Arlen Specter, R-Pa., wants to use much of that money to boost education spending.

The full Senate could address the bill later the same week.

Many observers predict that the Senate will recommend more education funding. But both chambers of Congress are locked into a seven-year GOP plan to balance the federal budget that they approved as part of the 1996 budget resolution.

"It will be very interesting to see what the Senate does on education," said Ms. Robinson. "The question will be, after the Senate bill, 'What is the president going to say? What programs will he want to keep?"'

Indeed, it is likely that the budgetary battle will end in negotiations between the White House and Congressional leaders. Congress could be forced to adjust spending allocations--and long-term budget-balancing plans--as part of a compromise 1996 budget.

~"If the political pressure not to change positions is there and the deadlock is strong enough, then any political solution is possible," said Edward R. Kealy, the executive director of the Committee for Education Funding, a Washington-based lobbying group representing about 80 education organizations and institutions.

Also on the radar screen is a "budget reconciliation" bill, which makes changes in entitlement programs. The budget resolution calls for changes in student-loan programs that save $10 billion over seven years.

The House and Senate budget committees recommended that those savings be realized by eliminating federal subsidies of student-loan interest for graduate and professional students while the borrowers are in school. That recommendation is not binding, however, and the committees with jurisdiction over student aid have until Sept. 22 to come up with the savings.

Lawmakers are also reportedly considering eliminating the six-month grace period on loan repayment enjoyed by all borrowers after they graduate. And some committee members announced in July that under new accounting rules they could achieve enough savings by eliminating the direct-lending program, which the Clinton administration wants to expand.

State Concerns

As the spending debate unfolds, lobbyists and college-student groups are not the only observers voicing concern about potential cuts in education funding. Federal spending on education accounts for only about 6 percent of all school funds, but the rate is much higher in urban areas, and many states, even those with healthy cash reserves, may find it difficult to make up the cuts.

Maryland Gov. Parris N. Glendening, a Democrat, said last month that his state will not replace the $34 million in federal education revenue that Maryland could lose this year under the House bill.

"The current economic and political climate is not a storm that will blow through," Mr. Glendening told a group of county officials.~~

If congressional rhetoric becomes reality, state legislatures may need special budget sessions this fall, said Mark Weston, the state-service coordinator for the Education Commission of the States.

"There's more than the reduction in education," said Mr. Weston, a former GOP appropriations aide. "Across-the-board reductions in money to states will directly and indirectly affect education."

For example, he said, the loss of federal revenue that had paid for a water project or a welfare program may force a state to shift spending, adding to the competition for state funds.

Nationwide, state budgets rose 4.8 percent in fiscal 1995, but are projected to rise just 2.6 percent in fiscal 1996, according to the National Conference of State Legislatures. State K-12 spending, which rose 7.4 percent in fiscal 1995, is projected to grow by 5.9 percent in fiscal 1996.

"People in the business of education need to get active and let Congress know there's a lot of good coming from how these funds are used," said Sally N. McConnell, the director of government relations for the National Association of Elementary School Principals.

She worries that some school officials will be complacent because the full effect of any cuts made this fall will not be felt in schools until the fall of 1996.

Vol. 15, Issue 01

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