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Why 2014 Could Hurt As Much As Sequestration for Education Programs

Published:  April 30, 2013

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.

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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.

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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

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