Federal

Budget Boom Mostly a Matter Of Ballooning Grants

By Erik W. Robelen — September 04, 2002 5 min read
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When Department of Education officials announced their new budget request earlier this year, they noted that federal spending on schools has soared in recent years.

In part, making that point served to cushion the political impact of a budget proposal that, departing from that trend, offered a relatively small increase. But department officials weren’t exaggerating.

The agency’s discretionary budget has grown at a remarkable pace over the past six years, more than doubling to about $50 billion. In fact, its budget has grown by a greater percentage than any other Cabinet-level agency in that time, according to the White House Office of Management and Budget.

A lot has changed in the Education Department budget the past several years. Some programs have seen a big influx of cash. While a few have disappeared, fresh ones routinely crop up, thanks to Congress’ healthy appetite for new initiatives.

At the same time, one thing has changed very little: the size of the federal bureaucracy. That’s because nearly all of the new money simply flows through the department to states, school districts, higher education students, and other recipients.

The number of department employees currently is around 4,650, according to William D. Hansen, the deputy secretary of education.

“It basically is about the same size as where we were back in 1992, frankly,” he said. That’s when Mr. Hansen was last at the department as a high-ranking agency official under President Bush’s father.

Salaries and other administrative costs have grown at a much slower rate than the agency’s overall budget. Discretionary spending in that area is $602 million for fiscal 2002 up from $467 million six years ago. Those figures exclude certain mandatory funds that help pay for administering student-loan programs.

Mr. Hansen noted that much of the extra money has gone to the Title I program for disadvantaged students, to special education, and to higher education Pell Grants.

“A lot of the increases the last couple of years were the checks, per se, getting bigger,” he said.

State grants for special education have more than tripled over the past six years, weighing in at $7.5 billion in fiscal 2002. The total for Pell Grants has more than doubled. Federal support for several other areas, such as educational technology and bilingual education, has also gone way up.

The fastest-growing program was just a seedling in 1996, funded at $750,000: the 21st Century Community Learning Centers program. The after-school initiative has proved extremely popular, with requests routinely exceeding cash on hand, even as the program’s budget shot up to Redwood proportions at $1 billion.

Not every line item, however, has enjoyed such growth. Programs, for example, for migrant education, magnet schools, and vocational education have seen relatively little change over time.

Even Title I, the Big Kahuna of K-12 programs, has not kept pace with the department’s budgetary growth. Since 1996, it has increased by about half, from $6.7 billion to $10.35 billion.

But Title I funding may be making up for lost time. The program saw its biggest leap ever this fiscal year, $1.6 billion, just as Congress finished up the “No Child Left Behind” Act of 2001. The law imposes new requirements on states and districts to improve student achievement, and much of that accountability is tied to Title I aid.

“Now, both Democrats and Republicans feel they have made Title I into a more demanding program, and therefore they’re willing to put more money into [it],” said Jack Jennings, the director of the Washington-based Center on Education Policy and a former education aide to House Democrats.

President Bush has proposed an extra $1 billion each for Title I and special education in fiscal 2003.

That said, his total request for the Education Department—$50.3 billion—is no match for the kind of increases enacted in the past few years.

Originally, the president’s request would have represented an increase of $1.4 billion, just shy of 3 percent. Congress this summer added an extra $1 billion to the fiscal 2002 level for Pell Grants to make up a shortfall. Under the new math, the proposed increase falls to about $400 million.

A ‘New World’

Some congressional Democrats were quick to pounce on the Bush proposal as too chintzy. They did the same last year, and Congress ultimately added several billion dollars.

Deputy Secretary Hansen said vastly changed circumstances within the past year explain what he called a “more humble” request. Much of the impetus for a modest increase came from the impact of the terrorist attacks last September and the struggling economy, he suggested.

“We’re living in a new world with a new budget environment,” Mr. Hansen said, noting that the top three concerns right now are defense, homeland security, and economic recovery. Beyond those, he said, “education is still the top domestic priority of the president in the budget.”

He added that with the federal government facing a budget deficit for the first time since 1998, “it obviously changes the budget discipline ... dramatically.”

How much discipline Congress will maintain is an open question. The Senate Appropriations Committee approved a bipartisan spending bill in July that would provide nearly $3 billion above the president’s request for education.

In fact, while Democrats have been the most aggressive in pushing for big budget increases, Republicans held majorities in both the House and the Senate for most of the past six years.

Joel Packer, a senior lobbyist for the National Education Association, hopes the trend continues.

“Obviously, over the last five, six years, we’ve had relatively strong increases,” he said. “That, however, does not negate the need for further increases.”

He argued that many programs were “woefully underfunded” for a long time, citing Title I as an example. Mr. Packer also cited the many requirements of the new law as requiring more money.

Michael G. Franc, the vice president for government relations at the Heritage Foundation, a Washington think tank, is skeptical of the drive for ever-higher funding. He argues that, historically, greater spending has not delivered tangible improvements.

“There’s this religious-like intensity to the belief that more money is directly linked to higher educational outcomes,” he said, “but we just don’t see it.”

When agency officials unfurled their budget plan in February, they produced a chart comparing the agency budget over time against reading scores on the National Assessment of Educational Progress. It showed a rising line for spending but a virtual flat line for test scores.

Deputy Secretary Hansen said the agency’s goal is to change that disparity.

“We need to make sure,” he said, “that these huge increases over the last few years are coupled with results.”

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