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UNDER THREAT: Senate Report and Hearing Examine Impact of Sequestration on Education

“They say nothing of the tens of thousands of teachers, police officers, and other public servants in communities all across America who would also lose their jobs. A laid-off teacher is just as unemployed as a laid-off defense contractor.”

Sequestration—the formal name of the $1.2 trillion in automatic across-the-board spending cuts over ten years that are set to occur on January 2—will cause states and local communities to lose $2.7 billion in federal funding in Fiscal Year 2013 for just three education programs alone—Title I, special education state grants, and Head Start—according to an analysis released on July 25 by Senate Labor, Health and Human Services (HHS), and Education Appropriations Subcommittee Chairman Tom Harkin (D-IA). This funding loss would affect a combined 30.7 million children and cause approximately 46,000 employees to either lose their jobs or rely on “cash-strapped” states and localities to pick up their salaries, Harkin said. The report, Under Threat: Sequestration’s Impact on Nondefense Jobs and Services, which also includes the impact on the Departments of Labor and HHS, was the subject of a July 25 hearing by the subcommittee examining the impact that sequestration will have on education.

In his opening statement, Harkin discussed the attention that cuts in defense spending have received, but he noted that domestic spending would also be significantly reduced by sequestration. “Sequestration wouldn’t apply only to defense,” Harkin said. “It would also have destructive impacts on the whole array of programs that undergird the middle class in this country—everything from education to job training, medical research, child care, food safety, national parks, border security, and safe air travel. These essential government services and programs directly touch every family in America, and they will be subject to deep, arbitrary cuts under sequestration.”

Based on two recent studies, Harkin argued that the economic effects to nondefense programs could be worse than cuts to Pentagon spending. The first, a December 2011 report from the Political Economy Research Institute at the University of Massachusetts, Amherst, finds that investing $1 billion in health care or education creates 54 percent and 138 percent more jobs, respectively, within the U.S. economy than spending $1 billion on the military. Additionally, a July 2012 study commissioned by the Aerospace Industries Association finds that sequestration’s cuts to nondefense spending would reduce the U.S. gross domestic product during Fiscal Years 2012–21 by a greater amount ($77.3 billion) than cuts to defense spending ($72.1 billion).

“Some members of Congress warn that defense contracting firms will lay off employees if sequestration goes into effect,” Harkin said. “They say nothing of the tens of thousands of teachers, police officers, and other public servants in communities all across America who would also lose their jobs. A laid-off teacher is just as unemployed as a laid-off defense contractor.”

Harkin’s report analyzes the potential state-by-state impact of sequestration on key programs representing a combined $35.9 billion, or 79 percent, of the U.S. Department of Education’s nonexempt discretionary funding. For example, the report finds that more than $41 million would be cut from the School Improvement Grant program, which focuses on turning around the nation’s lowest-performing schools, while cuts to career and technical education would mean that 1.1 million fewer students would be served by the program.

Harkin said he released the report to help the public understand why democrats are opposed to any “unbalanced approach” that protects defense spending and preserves tax cuts for the wealthy while “ignoring cuts to nondefense services, including education, that are so critical to the middle class.”

Senator Richard Shelby (R-AL), top Republican on the subcommittee, agreed in his opening statement that the across-the-board cuts mandated under sequestration “are not the answer to confront our fiscal problems,” but he questioned the report’s accuracy because the Obama administration had not provided “any concrete information” to make the assumptions it contains.

“Sequestration is not the right approach to end our fiscal turmoil,” Shelby said. “We need to find a solution to this problem now and end the uncertainty crippling school districts, small businesses, and education providers.… While the Chairman and I agree that sequestration will have a severe and detrimental impact on the Department of Education, we cannot forget how we got to this point in the first place. Our nation is $15.8 trillion in debt; a number that grows by $42,000 a second.”

Testifying at the hearing, U.S. Secretary of Education Arne Duncan outlined how the U.S. Department of Education would implement a sequestration of FY 2013 funds. Specifically, Duncan pointed to an analysis by the Congressional Budget Office estimating that sequestration would require a 7.8 percent reduction in funding for nondefense discretionary programs.1

Among specific education programs, Title I support would be cut by $1.1 billion, which would cut off funding to over 4,000 schools serving more than 1.8 million disadvantaged students, Duncan said. Additionally, more than 15,000 teachers and aides could lose their jobs. For special education state grants, sequestration would impose a cut of more than $900 million, which would eliminate federal support for 11,000 special education teachers, aides, and other staff.

Duncan noted that “even without sequestration,” domestic discretionary spending was already declining at the federal, state, and local levels. He highlighted the positive effect of “historic” education reforms such as Race to the Top and School Improvement Grants that will “contribute to future growth and prosperity” and argued that it “just makes no sense at all” to undermine this progress by sequestering federal funds.

“The long-term impact of sequestration could be even more damaging, as it would jeopardize our nation’s ability to develop and support an educated, skilled workforce that can compete in the global economy,” Duncan said. “Indeed, it would be hard to overstate the devastating impact of sequestration as a signal not just to the nation, but to the world, that we are no longer able or willing to prioritize investment in the best guarantee of our future success and prosperity: the education of our children.”

The hearing also featured a panel of educators who discussed the local and state impacts that sequestration would have. Billy Walker, superintendent of Randolph Field Independent School District, a public school district located wholly on Randolph Air Force Base in San Antonio, focused on the cut to Impact Aid. He said approximately half of his funding comes from the U.S. Department of Education and called Impact Aid the “lifeblood” for his district. In anticipation of the cuts in federal education funding, Walker had to eliminate an elementary reading specialist and librarian; a middle school reading specialist and secretary; a secondary English teacher, science teacher, and math teacher. He also had to eliminate the districts one-to-one laptop initiative as well as the baseball, cross country, and swimming programs.

Other witnesses at the hearing were June Atkinson, North Carolina state superintendent of public instruction; Neal McCluskey, associate director of the Center for Educational Freedom at the Cato Institute; and Tammy L. Mann, president and chief executive officer of the Campagna Center.

Video and witness testimony from the hearing are located at

Under Threat: Sequestration’s Impact on Nondefense Jobs and Services is available here.


Economic Impacts, Title I

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