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FEDERAL EDUCATION FUNDING

FEDERAL EDUCATION FUNDING. Caps, Cuts, Freezes and Sequesters. Joel Packer, Executive Director, The Committee for Education Funding Jpacker@cef.org. Committee For Education Funding. The Committee for Education Funding (CEF) is the oldest and largest education coalition.

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FEDERAL EDUCATION FUNDING

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  1. FEDERAL EDUCATION FUNDING Caps, Cuts, Freezes and Sequesters Joel Packer, Executive Director, The Committee for Education FundingJpacker@cef.org

  2. Committee For Education Funding • The Committee for Education Funding (CEF) is the oldest and largest education coalition. • We represent 110 national organizations and institutions from PreK through graduate education incluidng AAP. • For more information: www.cef.org • Follow us on Twitter: www.twitter.com/edfunding

  3. FISCAL YEARS 2011/2012 $1.5 BILLION IN CUTS

  4. Final FY 11 and 12 Appropriations • FY 11 cut ED (other than Pell) by $1.2 billion. • Teacher Quality grants cut 16%, Career/Tech grants cut 11%, ED tech eliminated • FY 12 total ED funding cut by $233 million. • All programs cut by 0.189% across-the-board cut. • Both FY 11 and FY 12 maintained the Pell maximum award of $5,550.

  5. Pell/Student Aid Cuts Enacted • Maintaining Pell maximum paid for with a variety of restrictions and limitations on student loans and Pell. • College students have contributed $4.6 billion out of their pockets to deficit reduction. • 145,000 students have lost their Pell grant.

  6. Fiscal Year 2012 Outlays

  7. FISCAL YEAR 2013 LARGEST EDUCATION CUTS EVER!

  8. The Budget Control Act How small will the box be?

  9. Caps and Cuts • BCA set in law discretionary caps for ten years (FY 12-FY 21). • Reduced spending by $900 billion over ten years. • Supercommittee failure triggered sequestration. • $1.2 trillion in automatic cuts between FY 13-21; 50% from defense, 50% from nondefense • FY 13 cuts started on March 1. • However, other than Impact Aid and Head Start, education cuts won’t start until July.

  10. Sequestration = Largest Education Cuts Ever! • FY 13 = fixed percentage across-the-board (ATB) cuts. • NDD cut is 5% = $2.5 billion for ED. • Head Start cut $401 million. • Pell grants exempt in first year. • FY 14-21 – will not be ATB cut; further lowers discretionary caps • Squeezes education $; Pell no longer exempt.

  11. FY 13 Impact of Sequestration 11

  12. FY 13 CR • Continuing Resolution extended for Labor-HHS-Education at FY 12 levels. • New ATB cut of 0.2%. • Then sequester cuts applied. • Final FY 13 = cut of 5.23%. • Final ED non-Pell grant funding now lower than in FY 04.

  13. FISCAL YEAR 2014 CONGRESS MUST REPLACE THE SEQUESTER!

  14. FY 14 Budget: Dueling Visions • FY 14 Budget - House Budget by Chairman Ryan (R-WI) passed on party line vote. • More than doubles the sequester cuts to nondefense discretionary (NDD) programs. • Cuts NDD funding by $1 trillion over ten years. • Cuts student aid and shifts mandatory Pell to discretionary side. • Consolidates ESEA and job training programs.

  15. FY 14 Budget: Dueling Visions • Senate Budget by Chairman Murray (D-WA) also passed on party line vote. • Repeals sequester • Increases revenue by $900 billion. • Includes strong support for Head Start, expansion of high‐quality pre‐K, strongly supports Title I and IDEA and continued investments in literacy, STEM, and career and technical education programs. • Eliminate student loan fee increases, retains subsidized loans and flexible repayment programs, and facilitates passage of legislation to prevent student loan interest rates from doubling.

  16. The President’s FY 2014 Budget • Repeals the sequester. • Raises $600 billion in revenue. • Includes some mandatory cuts. • The discretionary budget for ED = $71.2 billion, a $3.1 billion increase over FY 12, or $5.5 billion over FY 13. 16

  17. The President’s FY 2014 Budget • Most discretionary increases are for new programs; most current programs are frozen (Title I, IDEA, Impact Aid Payments, English Language Acquisition grants, CTE state grants, Adult Ed state grants, SEOG, TRIO, GEAR UP, aid to HBCUs and other MSIs). • The budget also includes mandatory funds for Preschool for All ($75 billion over 10 years), RESPECT teacher quality ($5 billion), educator jobs ($12.5 billion) and $8 billion for Community College to Career Fund. 17

  18. Sources: CEF Calculations based on CBO and OMB data

  19. CEF Budget Response • CEF released our analysis of the President's’ FY 14 Budget and the sequester, available at www.cef.org

  20. Outlook • Appropriations Committees are working from different allocations for NDD: • Senate = $506 billion • House = $414 billion (12% below sequester level!) • House Appropriations started markups this month. • Labor-HHS-ED? • Senate markups not until June. • Labor-HHS-ED in July • FY 14 CR inevitable.

  21. Outlook • House Appropriations approved subcommittee 302(b) allocations. • Labor-HHS-ED bill would be a cut of 18.6% below FY 13 sequester level and 22.2% below FY 13 pre-sequester!! • Quadruples the sequester cuts!

  22. Debt Ceiling • Debt Ceiling was reached May 19 • Treasury using “extraordinary measures” to prevent default for a few months – October? • House Republicans will demand something in exchange for raising debt ceiling.

  23. Deficit Reduction3.5:1 Spending Cuts v. Revenues

  24. Questions?

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