Ed Money Watch

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Congress Passes Continuing Resolution to Fund Government for Six Months Before Leaving Town

Published:  September 24, 2012

This weekend, the Senate voted 62-30 to approve a continuing resolution (CR) that will fund the government for the first six months of fiscal year 2013, which begins on October 1. The bill, which the House of Representatives passed last week, maintains spending at fiscal year 2012 levels, plus a 0.612 percent increase across the board. This will bring total spending for Department of Education discretionary programs to about $68.5 billion. With that final business accomplished, both chambers of Congress agreed to recess until after the November elections.

The CR maintains overall spending in fiscal year 2013 within the discretionary spending caps laid out over a year ago in the Budget Control Act of 2011. It staves off any potential government shutdown, and leaves the mess of passing a final appropriations bill to a lame duck session of Congress after the elections, or to a newly-elected Congress come January.

But the CR didn’t solve every problem. Halfway through the CR – beginning January 2, 2013 – the budget will be subject to across-the-board cuts called sequestration. The Budget Control Act, in addition to setting discretionary spending limits for fiscal years 2012-2021, included a mechanism to automatically cut federal spending if the appointed congressional supercommittee failed to agree on the necessary spending cuts. In such a case, the White House Office of Management and Budget (OMB) would rescind (“sequester”) fiscal year 2013 funding beginning mid-year in January and lower spending limits for each of the following nine years to find $1.2 trillion in savings over 10 years.

The supercommittee did fail, and federal agencies are now preparing for sequestration. The White House released a report last week revealing that most Department of Education programs will face an 8.2 percent automatic cut. Title I of the Elementary and Secondary Education Act, which includes several programs including grants for disadvantaged students, School Improvement Grants, and McKinney Vento Homeless Student grants, will be cut by $1.3 billion. Individuals with Disabilities Education Act special education grants, including K-12, preschool, and infant and family grants, will be cut by $1.0 billion. However, Pell Grants and student loans are exempt (except for an increased student loan origination fee). The 8.2 percent cut exceeds previous estimates from the Congressional Budget Office of 7.8 percent.

The OMB report also failed to meet the requirements for it laid out by Congress, which stated that OMB was to estimate cuts at the program level. Instead, OMB offered its estimates of the cuts by office and account (for example, for the Supporting Student Success account in general, rather than the Promise Neighborhood program specifically). It is uncertain whether agencies or offices have the discretion to apply the cuts unevenly across programs within an account. But if they can, that means the OMB's report provides little information about how sequestration will actually affect individual programs. [JC1] For a look at how sequestration could affect school districts across the country, check out this Ed Money Watch post.

Still, Congress has a window in which to prevent sequestration from taking effect. Lawmakers could return to a lame duck session of Congress immediately after the November elections to cancel or postpone the sequestration legislatively. No congressman likes to see funding cut directly from his district, so they certainly have the political motivation to cancel the cuts.

Check back with Ed Money Watch for more details as the sequestration deadline approaches.

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