Brokedown Congress appears likely to spend the weekend attempting to keep the government from shutting down and the U.S. from defaulting on its debt. The sticking point this time isn’t schools. Instead, education is getting caught in the crosshairs. Republicans want to defund, or at least delay implementation of, the president’s landmark health care overhaul law (the Affordable Care Act to its fans and “ObamaCare” to its critics).
What does the terrible, horrible, no good, very bad budget situation mean for schools?
The U.S. Department of Education released its shutdown contingency plan online Friday afternoon. Check it out here. Cliff Notes version: More than 90 percent of department employees would be furloughed during the first week of a shutdown. The department has roughly $22 billion in key K-12 formula funding through state Title I, special education and career and technical education grants to give out during the first week of October. Those dollars would still go out, even if there’s a shutdown. If the shutdown goes on for more than a week, some additional employees could be called back to work. But it would be a very small number, no more than 6 percent of total staff, at any given time.
Some programs could still make payments, including Pell Grants and Federal Direct Student loans. And other grants would still be allocated, on a limited basis (only if not getting the money would “significantly damage” the programs). It’s unclear what that would mean for Race to the Top, Investing in Innovation, and Promise Neighborhoods. Those programs all have fiscal year 2013 funds that are only available through Dec. 31—if the shutdown lasts for awhile, employees may be called back temporarily to ensure that money goes out the door.
A long shutdown would be very bad news, indeed, the department writes. “A protracted delay in Department obligations and payments beyond one week would severly curtail the cash flow to school districts, colleges and universities, and vocational rehabilitation agencies that depend on the Department to support their services.”
The upshot? Any shutdown is going to mean headaches for districts, which may have trouble getting their questions about issues like waiver implementation, for example. And a shutdown would also effect the department’s regional offices, another point of contact and assistance for state education agencies. But a short shutdown is less of a big deal for K-12 districts than a long, drawn-out shutdown.
So what’s it like at 400 Maryland Ave. when (most of) the lights are off? The last time it happened was in 1996, during the Clinton years, when Richard Riley was secretary and Mike Smith was a force at the department.
“At first, it [felt] like a Sunday or something. Only a few people in the office; maybe you’d have a meeting or two,” he said. “For the first couple days, you took it moderately lightly,” Smith, a former deputy education secretary, told me for a story I wrote back in March of 2011, during a similar fiscal showdown. But, he added, “as it drags on, you begin to get more serious about it. All sorts of things pop up that you just haven’t thought of originally.”
For instance, Smith told me, the department is usually ready to provide back-up and advice in the event of a sudden emergency or disaster, like a mass school shooting. If there’s a shutdown, all bets are off on that type of assistance.
But a temporary shutdown is arguably no biggie compared to what could happen if Congress is unable to deal with the debt ceiling. The feds are slated to hit the debt ceiling in mid-October and a default—even a brief one—is likely to have major ramifications.
“That’s a much more serious, broader economic concern,” said Clare McCann, a policy analyst for the New America Foundation. A downgrading of the U.S. credit score, which happened the last time the country nearly defaulted, could have implications for districts’ credit ratings, for instance.
And if a default shakes the overall economy, schools could feel a serious squeeze, she added. Districts were largely able to blunt the impacts of sequestration (those across-the-board cuts to domestic and military programs) in part because the brightening state and local fiscal forecast meant policymakers were able to boost K-12 spending to make up for the federal cuts.
But another economic downturn means all bets are off, McCann said, “This would be another hit on of all the other [blows] we’re current dealing to schools.”
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