Shutdown Averted, Odds for a Budget Deal Improve

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Congress and the White House were expected late last week to agree on a new, temporary federal spending plan, avoiding a third shutdown of the Department of Education and other agencies.

And the prospects for a longer-term budget deal brightened considerably last week, as Republican leaders indicated that they were willing to make new concessions.

The stopgap spending bill, which would extend funding through March 15, would kill 10 programs, including eight Education Department programs. That would achieve about $60 million in savings in the fiscal year that began Oct. 1, based on current funding levels.

The bill also raises the maximum Pell Grant award for college students by $100, to $2,440.

The programs to be eliminated had been targeted by the Clinton administration as well as lawmakers. They include dropout-prevention demonstrations, support for native Hawaiian and Alaskan cultural programs, and small higher-education programs.

"It's become incremental. We're getting what we can when we can get it," said a House GOP aide.

The House passed the measure 371-42 on Jan. 25, after defeating a motion to return it to committee with orders to fund the whole Education Department at 1995 levels. That motion was rejected 222-193, with four Republicans joining Democrats in backing it.

The Senate was expected to take up the stopgap measure late last week. A previous stopgap spending bill expired Jan. 26.

Education Department officials were trying to determine the impact of provisions limiting spending on "new grant activities" in six of the agency's programs, including the Women's Educational Equity Act, technical assistance for troubled Title I programs, and technical assistance and evaluation efforts in drug deterrence and immigrant education.

Buying Time

"One way to look at this is that they're trying to stop the spending where technical assistance is provided," said Undersecretary of Education Marshall S. Smith. "That's an important group of funds."

A Democratic appropriations aide said the intent was to prevent the Education Department from committing 1996 funds under the programs, which can still spend money appropriated in fiscal 1995.

The new bill would give negotiators more time to work out a long-term deal. Such a deal could allow more education funding in the current fiscal year than allotted under pending appropriations measures, which would slice spending $2 billion to $3 billion below current levels. But the bill provides no immediate relief for local and state budget writers.

The stopgap bill would extend spending terms of earlier continuing resolutions for most programs, funding them at the lowest of three marks: House- or Senate-passed appropriations, or funding levels for fiscal 1995, which ended Sept. 30. Programs targeted for elimination in either appropriations bill would continue being funded at no more than 75 percent of 1995 levels.

Most education programs would not be immediately affected, since the bulk of federal aid for fiscal 1996 will not begin flowing until July 1. But if those levels are extended for the entire year, the Education Department estimates its budget would be cut $3.1 billion from the 1995 level of $32 billion.

There is new hope for a budget deal, however, after an announcement by GOP leaders that they are willing to make concessions to achieve $100 billion in savings over seven years. Their initial target was closer to $700 billion.

Vol. 15, Issue 19, Page 18

Published in Print: January 31, 1996, as Shutdown Averted, Odds for a Budget Deal Improve
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