Understanding the Federal Budget and its Implications for Adult Education (and What You Can Do About It!)

1. Understanding the Federal Budget and its Implications for Adult Education (and What You Can Do About It!) March 25, 2013 Marcie Foster, CLASP Jackie Taylor, National Coalition for Literacy

2. The Real World: Budget Process • Congress has a multi-year budget process: • Agencies present budgets to OMB • President’s Budget • Budget resolution (determines the size of the pie) • 302(a) allocations • Appropriations (determines the size of the slices) • 12 subcommittees-302(b) • Labor-HHS includes adult education spending • Most of recent high-stakes deadlines (e.g. “fiscal cliff”) are political fabrications, not part of the budget process.

3. What’s the big deal anyways?

4. Federal Spending

5. Mandatory v. Discretionary • Mandatoryspending occurs automatically once authorized. • Like your rent or mortgage, health insurance, phone bill. • Includes Social Security, Medicare, Medicaid, SNAP. • Discretionaryspending must be “appropriated” each year. • Like buying clothing, groceries, or a computer. • Includes adult education, job training, health research, military spending, disaster relief. Debt Ceiling limits total government borrowing

6. How Did We Get Here?

7. All Budget Options are Painful for Non-Defense Discretionary Spending COMMITTEEE FOR EDUCATION FUNDING

8. Non-Defense Discretionary Spending Would be Cut to the Bone Source: Bipartisan Policy Center

9. Adult Education Has Already Taken Budget Hits – Enrollment Declines Following

10. Taking a Balanced Approach to Deficit Reduction • Programs cuts have borne the brunt of deficit reduction. For every $1 in revenue increases, we’ve had $2.50 in spending cuts. • Need to ensure a balance of spending cuts and revenues in a comprehensive plan. • More spending cuts on the horizon – continuing resolution (FY13) with sequestration.

11. More “Deadlines” Approaching…

12. Sequestration: Congress’ “Best” Idea • Sequestration was designed to bring both Democrats and Republicans to the negotiating table to agree to unpalatable spending cuts and tax increases in order to reduce the deficit

13. Sequestration – March 1, 2013 Most members of Congress agree that sequestration is a bad way to reduce the deficit BUT cuts will likely remain (5% on non-defense discretionary) Some discussions about administrative flexibility implementing the sequester. Programs in future years (FY14 and beyond) are not exempt—everything is on the table.

14. More “Deadlines” Approaching…

15. Continuing Resolution (FY13) – March 27, 2013 FY13 CR will fund the government for the remainder of the fiscal year (until Sep. 30). CR will be the implementation of the sequester (5% from non-defense discretionary).

16. More “Deadlines” Approaching…

17. Budget (FY14) – April 15 • Ryan Budget (House) • Reaches balances budget in 10 years. • No revenues, only spending cuts. • Murray Budget (Senate) • Takes a balanced approach to deficit reduction (revenues and spending cuts). • Preserves spending in critical areas (education, job training, infrastructure). • President’s Budget (April 8) • Will likely seek a balanced ratio of 1:1 revenues to spending cuts.

18. More “Deadlines” Approaching…

19. Debt Ceiling – May 18 Unlikely to result in political stalemate due to reasonable increase in January 2013.

20. The Bottom Line Basic grants to states in July 2013 will be impacted unless action is taken to reverse the sequester or introduce administrative flexibility. FY14 and subsequent years will pose even more significant challenges if the sequester remains in effect – there are no firewalls between defense and non-defense. The best-case scenario (Senate FY14 budget proposal) will still put extreme downward pressure on funding for adult education.

21. Keep in touch! Marcie Foster mwmfoster@clasp.org Jackie Taylor jackie@jataylor.net