Education Budget

The parade of bills that could replace No Child Left Behind continues this week with Wednesday’s markup of Rep. John Kline’s (R-MN) version. All signals suggest that this won’t be the year Congress finally updates the nation’s most comprehensive education law—and the substantial differences between Kline’s and Sen. Tom Harkin’s bills have a lot to do with these dim prospects. We’ve already seen what Harkin’s Strengthening America’s Schools Act would mean for English Language Learners (ELLs). Today we’ll take a similar look at Kline’s bill, the Student Success Act (SSA).

Tuesday and Wednesday, the Senate HELP Committee convened to mark up Chairman Tom Harkin's (D-IA) bill to reauthorize the Elementary and Secondary Education Act. @NewAmericaEd's Anne Hyslop and Conor Williams live-Tweeted, and we've collected some of the main takeaways here, ICYMI.

Last week was a big week for American education policy watchers—we received not one, not two, but three new ESEA reauthorization bills. We’ve already discussed Sen. Tom Harkin’s (D-IA) Strengthening America’s Schools Act (SASA), so it’s time to take a look at the Every Child Ready for College or Career Act, proposed by Senator Lamar Alexander (R-TN).* Like last time, we’ll be focusing on how the bill would affect English language learners (ELLs). (For a comprehensive view of the differences between the bills, check out this post from my colleague Anne Hyslop.)

Now that my colleagues Anne Hyslop and Clare McCann have dug into the changes that Senator Tom Harkin’s (D-IA) Strengthening America’s Schools Act (SASA) proposes for Title I and Title II (here and here), it’s my turn to take a look at the bill’s potential effects on English language learners (ELLs).

Last week, Republicans on the House Appropriations Committee circulated a proposal that would shift fiscal year 2014 funding from health care, job training, and education programs to military and national security programs. (Fiscal year 2014 starts October 1, 2013.) Just how big of a hit does that mean for education programs? Put it this way, the cuts the House Republicans have in mind for the upcoming fiscal year are four times larger than those under sequestration. That is, take education funding—already lower due to sequestration—and cut it again four times over.

Last month we explained in the issue brief, Federal Education Budget Update: Fiscal Year 2013 Recap and Fiscal Year 2014 Early Analysis, that House Republicans had big cuts to education programs in mind when they passed their budget resolution.

The Budget Control Act of 2011 limits fiscal year 2014 spending on appropriations (including most education programs) some $18 billion below the 2013 post-sequester level. House Republicans want to follow that limits, but they want to go a step further. They are proposing to increase funding for defense and national security programs while staying within that cap. That means everything else has to give.

The latest development, the release of the House 302(b) suballocations, provides the first look at what broad categories of programs will bear the brunt of the increase-defense-and-cut-the-rest policy that House Republicans are pursuing. The 302(b) suballocations are specified amounts that each appropriations subcommittee will be granted by the full House Appropriations Committee to design appropriations bills for the Department of Education and other federal agencies for the upcoming fiscal year.

Final appropriations in fiscal year 2012 for programs covered by the Labor-Health and Human Services (HHS)-Education Appropriations Subcommittee totaled $157 billion. In 2013, after the sequester, it is approximately $150 billion. Under the House proposal for 2014, the figure would fall to $122 billion.   

Democrats have expressed some concerns about the disproportionate cuts to social programs and welfare spending. And although the House Appropriations Committee has voted for the 302(b) suballocations and begun voting on defense spending bills, the Labor-HHS-Education 2014 spending bill would have to be approved both by the full House and Senate, so the cuts may never come to pass.

And there’s another reason the House Republicans are unlikely to succeed with their proposal: The last time Congress provided about $122 billion for the Labor-HHS-Education appropriations bill was in fiscal year 2002, without factoring in inflation. Do House Republicans really want to erase all of the funding gains for education made under the Obama administration and the Bush administration?

Still, as we warned in our budget brief last month, “an overall appropriations limit that conforms to the BCA and the House-passed budget resolution will almost certainly force spending reductions for some education programs.”  As the 2014 budget debate progresses through the halls of Congress, members will be considering whether or not they want to follow through with the reality created by a law they passed two years ago.

On March 1, 2013, federal agencies were directed by the White House budget office to cut spending for the remainder of the 2013 fiscal year, through Sept. 30. The cuts, known as “sequestration” in Washington parlance, apply evenly to almost every program, so agencies do not have much leeway to protect certain programs at the cost of others. Now, two-and-a-half months later, the big question is how the cuts are affecting people on the ground. The answer: We have anecdotes, but no firm numbers.

Last week, the New America Foundation’s Education Policy Program published an issue brief on the recently completed (and two months late) fiscal year 2013 budget, with an early analysis of how the 2014 budget process is likely to affect education programs. One careful reader noticed that the explanation about sequestration failed to mention two lesser-known education programs: the TEACH Grants and Iraq-Afghanistan Service Grant programs.

The former provides tuition aid to prospective teachers, but it converts to a loan if the student fails to complete four years of teaching to high-needs students after graduation. The latter provides tuition aid to the children of military parents who died during military service after September 11. Both programs are affected by across-the-board spending cuts implemented last year.

Although sequestration was meant to apply uniformly to most education programs, slicing evenly program by program, there were some exceptions. Pell Grants, as we’ve reported, were exempt, and student loans were subject only to a fee increase to reduce costs. And it appears that cuts will be larger for TEACH Grant and the Iraq-Afghanistan Service Grant than for other programs.

How much larger will the cuts be?

Recall that in accordance with the Budget Control Act of 2011, the failure of an appointed “supercommittee” to find $1.5 trillion in deficit reduction over 10 years triggered the execution of across-the-board spending cuts in mid-fiscal year 2013. The final size of the cuts was 5.0 percent cut for education programs funded through appropriations, and 5.1 percent for those funded on the so-called mandatory side of the budget. (Both TEACH Grants and Iraq-Afghanistan Service Grants are considered mandatory funding.)

For the Iraq-Afghanistan Service Grant program, though, the reduction will be 10.0 percent. For the TEACH Grant, it will be 7.1 percent. Therefore, the maximum Iraq-Afghanistan Service Grant will drop from $5,645 (the program is meant to match the size of the maximum Pell Grant) to $5,081 next year. The maximum annual TEACH Grant drops from $4,000 to $3,716. Those reductions affect the first disbursement that occurs after March 1, 2013, which in most cases means the 2013-14 school year, and the reductions are effectively permanent, so they’ll remain at that lower level thereafter.

Why did sequestration impose larger reduction for these programs than for others? And why 10.0 percent for one and 7.1 percent for the other? The reasons remain unclear, and the U.S. Department of Education has not offered much explanation. Some media reports have suggested that the White House is working to limit the impact of sequestration by moving money around and restoring some funding under its budget authority – but thus far, there’s no word from the White House that such flexibility options were the case for these Department of Education programs. We’ll keep an eye out for a good explanation over the coming weeks and months.

And the confusion isn’t limited to these programs. The president’s fiscal year 2014 budget request, which usually includes spending levels for the prior two years, didn’t even incorporate final, post-sequester fiscal year 2013 spending into its budget tables, for the Department of Education or other agencies. So one thing is clear: The government still isn’t able to provide much evidence around sequestration’s implementation. In spite of anecdotal stories about children losing access to Head Start and special education and Title I services being cut across the country, there’s not yet a comprehensive understanding of how sequestration is affecting education programs.

For more on last year’s budget, check out our issue brief, Federal Education Budget Update: Fiscal Year 2013 Recap and Fiscal Year 2014 Early Analysis.

Today, the New America Foundation’s Federal Education Budget Project released Federal Education Budget Update: Fiscal Year 2013 Recap and Fiscal Year 2014 Early Analysis, an issue brief that explores the 2013 and 2014 budgeting processes and their implications for federal education programs. The brief outlines the key benchmarks Congress and the president reached, and provides a simple, comprehensive resource to understand the broader budget picture.

As the brief notes, the fiscal year 2013 budget is now complete, and the 2014 appropriations process is officially underway. But the complex circumstances of 2013 – including a temporary funding measure that Congress passed to hold funding steady at last year’s level (continuing resolution), and then an across-the-board 5.0 percent spending cut (sequestration) applied to most federal education programs – have made it challenging to track the vital figures in appropriations spending. That’s why many education stakeholders might be surprised to discover this: Next year’s budget could bring even more pain than sequestration has.

Sequestration was a product of the Budget Control Act of 2011 (BCA), a broader deficit reduction bill passed as a compromise to raise the federal debt ceiling. According to the law, when a congressionally appointed “supercommittee” of legislators couldn’t agree on $1.5 trillion in deficit reduction over 10 years, the BCA ensured most of that would happen anyway – through sequestration in 2013, and through lower spending caps from 2014 through 2021.

Sequestration was applied indiscriminately to virtually every program funded by the federal government – a poorly targeted, mid-year cut. However, the spending caps laid out by the BCA will force federal appropriations spending even lower next year than sequestration forced it this year. Instead of $984 billion in total appropriations spending, the post-sequestration total for 2013, the law caps appropriations at $966 billion next year.

Importantly, the spending cap for next year is only an aggregate one. Whereas the sequester in 2013 applied evenly to every program, the 2014 cap instead means that Congress will have to make difficult choices as it drafts spending bills. Lawmakers are supposed to appropriate not more than what the cap allows (though they may pass a law to override that limit) but within the broad category of discretionary spending, the law does not limit funding for any one program (think Head Start, Title I, and Pell Grants).

Some policymakers have opted not to make those hard decisions, at least so far. Both President Obama’s 2014 budget request and the budget resolution passed by the Democratic Senate for 2014 ignore the overall spending cap, and instead revert to the BCA spending caps set out before the supercommittee’s failure ($1.058 trillion in 2014). The House, meanwhile, stuck with the post-sequester cap in its own budget resolution.

Any joint budget resolution between the House and Senate is still a mystery; in fact, for the past several years, Congress has elected to stick with the BCA limits rather than pass a joint resolution at all. But if lawmakers vote to exceed the cap, they’ll also have to vote to override the BCA, because the BCA takes precedence over a non-binding budget resolution. If, on the other hand, lawmakers stick within the BCA limits, federal education programs will be fighting for a share of an even smaller pie than was provided in 2013.

Click here to read the full brief

State pre-K funding shrunk by over half a billion dollars from the 2010-11 to the 2011-12 school year. That was the largest one-year decrease in the last 10 years, leading the National Institute for Early Education Research (NIEER) to declare it the "worst year in a decade” for high-quality pre-K access across the United States.

The New America Foundation’s Education Policy Program released an issue brief detailing the completion of the fiscal year 2013 appropriations process and the start of 2014 budgeting. The brief explores congressional budget actions over the past year and describes their effects on federal education programs.