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House Appropriations Committee Introduces 2012 Labor-HHS-Education Bill

Published:  September 30, 2011

Yesterday, a subcommittee of the House Appropriations Committee released a draft version of a fiscal year 2012 Labor-HHS-Education appropriations bill. This comes shortly after the Senate Appropriations Committee approved its version of the bill earlier this week. Unsurprisingly, the House Appropriations Committee’s bill differs from the Senate Committee’s bill in some pretty significant ways, setting Congress up for a drawn out appropriations process. Funding for nearly every federal education program is decided each year through the appropriations process. (A table comparing both Committees' bills can be found at the end of this post.)

The House Committee’s bill includes significant increases for both Title I Part A, grants for local education agencies to support educational services for low income students, and Individuals with Disabilities Education Act Part B (IDEA) special education grants to states. The bill would fund Title I at $15.5 billion, $1 billion more than the 2011 level and the president’s request. Interestingly, however, this increase is accomplished through advance appropriations, a budgeting trick that allows Congress to provide funding for a program through the following year’s appropriations. IDEA would be funded at $12.7 billion, $1 billion over the president’s request and $1.2 billion over 2011 levels and the Senate Committee’s bill. These increases are surprising given the House leadership’s focus on austerity. It should be noted, however, that the funding increase for Title I provided through an increase in a 2013 advance appropriation technically means the funding doesn’t count against the 2012 spending cap House Republican’s fought so hard to put in place during this summer’s debt ceiling negotiation.

Unsurprisingly, the House Committee bill does not continue funding for several programs that the Obama administration favors. For example, Race to the Top ($699 million in 2011) and Investing in Innovation ($150 million in 2011), which were created as part of the American Recovery and Reinvestment Act of 2009, would receive no funding under the bill. The School Improvement Grant program ($535 million in 2011), which has become unpopular with many Republicans because it proscribes school turnaround models some consider too prescriptive, would also lose funding. And the bill would defund Promise Neighborhoods in 2012 ($30 million in 2011), a relatively new program that provides grants to plan and implement community schools. In comparison, the Senate bill maintains or even increases funding for these programs.

The House Committee bill also eliminates funding entirely for two programs that are typically used to provide earmarks to local and national education organizations, Funds for the Improvement of Education (FIE), which received $12 million in 2011, and Fund for the Improvement of Postsecondary Education (FIPSE), which received $19 million in 2011.

The House Appropriations Committee bill would also keep funding level for several programs. It would provide 2011 levels of funding for the Teacher Incentive Fund ($399 million), which provides funds to states and districts to implement new teacher compensation systems. Interestingly, the Senate Committee bill would cut funding for this program by $99 million in 2012 and broaden the program to apply to other teacher hiring and retention reforms beyond performance pay. The House Committee bill also maintains funding levels for several higher education programs, including Work Study ($979 million), TRIO ($827 million), and GEAR UP ($303 million).

Much like the Senate Appropriations Committee’s 2012 bill, the most interesting component of the House Committee’s bill pertains to Pell Grants. As we’ve discussed previously, the cost of the Pell Grant program is growing and Congress has been struggling each year to maintain the supplemental funding that it first provided in the American Recovery and Reinvestment act of 2009. Earlier this year, Congress provided $10 billion for the program in fiscal year 2012 under the Budget Control Act (the debt ceiling agreement), but only by cutting interest rate subsidies on federal student loans for graduate students. But rather than follow the Senate with further reductions in interest subsides (for undergraduate students), the House Committee’s bill makes significant changes to eligibility requirements for Pell Grants, lowering the cost of the program overall while maintaining the current maximum grant of $5,550.

The bill provides $20.7 billion in discretionary funding for the program, $2.3 billion below 2011 levels, though the eligibility changes mean that level of funding will still be sufficient to maintain the maximum grant. Moreover, future year costs will also be lower.

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The eligibility rules that the House has proposed include a reduction in the maximum number of semesters a student can receive a Pell Grant from 18 to 12, an elimination of Pell Grant eligibility for students that are attending school less than half time, a reduction in the amount of a student’s personal earnings that can be excluded from a Pell Grant award calculation, and a cut to the maximum family income that would automatically qualify a student for the maximum grant. The proposal would also end Pell Grant eligibility for students who qualify for less than 10 percent of the maximum grant. All of these changes would lower the appropriation needed to fund a maximum grant of $5,550 by $3.6 billion in 2012 and about $4.0 billion each year thereafter because fewer students will be eligible for grants and some students will receive smaller grants than they otherwise would have. The changes also generate savings in the portion of the Pell Grant funded on the mandatory (i.e. entitlement) side of the budget totaling $5.7 billion over 10 years.

The differences between the House and Senate Appropriations Committees’ bills are stark. From dramatic increases in Title I and IDEA funding in the House bill to continuing support for Race to the Top and Investing in Innovation in the Senate bill to completely different approaches to paying for Pell Grants, negotiations over Department of Education funding are likely to be challenging and drawn-out. Check back with Ed Money Watch as this process continues.

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