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WAITING GAME CONTINUES FOR FY 2011 APPROPRIATIONS: Short-Term Spending Measure Averts Government Shutdown, Postpones Decisions on Larger Spending Cuts; Senate Likely to Hold Key Votes on March 8

Rating
“This agreement should cut spending and reduce deficits without damaging economic growth or gutting investments in education, research, and development that will create jobs and secure our future.”

Unable to come to an agreement on final Fiscal Year (FY) 2011 spending levels prior to the expiration of the short-term continuing resolution (CR) that was keeping the government funded until March 4, Congress passed another short-term CR that will cut $4 billion from the federal budget while buying time for House and Senate leaders to reach a compromise that would fund the government through the end of the fiscal year on September 30.

The new CR cuts $1.2 billion from eight programs that had been targeted for elimination in President Obama’s FY 2012 budget, but half of these programs fall under the jurisdiction of the U.S. Department of Education. Included in the program terminations are Striving Readers ($250 million), Smaller Learning Communities ($88 million), Even Start ($66 million), and the Leveraging Educational Assistance Partnership (LEAP) ($64 million). The CR will also eliminate $2.7 billion worth of earmarks originally approved for FY 2010.

Although the most recent CR cuts $4 billion in federal spending, it falls far short of the House-passed long-term measure, the Full-Year Continuing Appropriations Act, or H.R. 1, which would make an additional $57.5 billion in cuts.1 Senate Democrats have made clear their opposition to H.R. 1, not only because of the large spending cuts, but also because it contains provisions that would block environmental regulations and the implementation of the health care overhaul that was signed into law last year. The new CR expires on March 18, leaving the House and Senate only two weeks to bridge the difference or once again face the possibility of a government shutdown.

In an effort to bring some urgency to the negotiations, President Obama called on congressional leaders from both parties to begin meeting immediately with Vice President Joe Biden, White House Chief of Staff William M. Daley and Office of Management and Budget Director Jacob J. Lew to find common ground on a long-term budget solution. “This agreement should cut spending and reduce deficits without damaging economic growth or gutting investments in education, research, and development that will create jobs and secure our future,” Obama said in a March 2 statement. “This agreement should be bipartisan, it should be free of any party’s social or political agenda, and it should be reached without delay.”

The following day, on March 3, the White House proposed an additional $6.5 billion in cuts on top of the $4 billion that were included in the most recently enacted CR. The $6.5 billion in new cuts were included into legislation unveiled by Senate Appropriations Committee Chairman Daniel K. Inouye (D-HI). The Senate bill would fund the government through September 30, 2011 and is seen as Senate Democrats’ alternative to H.R. 1.

According to an analysis by the Senate Appropriations Committee, the Senate bill would restore funding for several programs that would be cut under H.R. 1, including many impacting education. While H.R. 1 would cut funding for Title I by nearly $700 million, Inouye’s bill would increase funding for Title I by $100 million. Inouye would also provide $545 million for School Improvement Grants versus $209 million in H.R. 1; $200 million for Striving Readers, which was eliminated in the House bill; and $450 million and $300 million, respectively, for Race to the Top and Investing in Innovation (I3), both of which were eliminated in the House bill.

Bob Wise, president of the Alliance for Excellent Education and former governor of West Virginia, acknowledged the tough budget environment, but said that “cutting the dropout rate is even more important than cutting the budget,” adding that whether America “sails or fails in the knowledge-based economy of the twenty-first century will depend on the education students receive today.” Wise especially noted the Senate bill’s restoration of funding for a comprehensive Striving Readers program that supports statewide, research-based literacy instruction and interventions for children from birth through grade twelve. “A student who cannot read is a student who cannot succeed. I call on the Congress to enact a responsible budget that prioritizes education reform,” Wise said in a statement.

House Speaker John Boehner (R-OH) was less impressed with the Senate bill. He issued a statement calling it “little more than the status quo,” and said that the status quo is “indefensible and unacceptable.” Senator Jeff Sessions (R-AL), Top Republican on the Senate Budget Committeecalled the plan “stunningly inadequate.” He said that “efforts to sustain our bloated government will be strongly resisted next week as Republicans continue pushing for spending restraint that grows the economy, creates jobs, and strengthens the foundation for our future.”

Both the Senate bill and H.R. 1 are scheduled for consideration on the Senate floor on Tuesday, March 8, but neither measure is expected to reach the sixty votes necessary to avoid a filibuster. Instead, the votes are seen as a test to demonstrate the need for compromise while also determining Senators’ appetites for spending cuts.

In a March 4 speech on the Senate floor, Senate Majority Leader Harry Reid (D-NV) explained the rationale behind holding a vote on both bills. “We know neither [proposal] will reach the president’s desk as written,” Reid said. “So once these votes are behind us and everyone’s voice is heard, I hope each Senator and member of Congress will find renewed motivation to do what we’ve needed to do since the beginning—come together, negotiate in good faith, and compromise. We have to acknowledge that the answer that will allow us to move forward lies somewhere between our two positions.”

March 4 article in the Washington Post explained that aides in both parties believe such an impasse would be progress because it will allow Democratic leaders to “press reluctant liberals to support additional spending cuts” while Republican leaders will have “fresh leverage with the independent-minded bloc of House conservatives who forced them to pursue far more ambitious cuts than were first proposed.”

What happens next after the Senate votes on the two competing proposals is anyone’s guess. Democrats have called the spending cuts in H.R. 1 excessive but show a willingness to support some spending reductions—even though those cuts fall short of the House Republicans’ goal. Alternately, Democrats have refused to consider the policy proposals in H.R. 1, including the provision to exclude funding for the health care overhaul. But that provision is important to House conservatives, many of whom campaigned on a promise to repeal the health care law.

Meeting somewhere in the middle on the spending figure would seem to be an obvious solution, but House Republicans could lose support from some members in their caucus if they move too far away from the spending goal set in H.R. 1. However, if House Republicans lowered the demands for spending cuts while also removing the policy proposals from consideration, they could possibly draw enough support from House Democrats to send a bill to the Senate. Case in point: The most recent CR did not contain the policy proposals and drew support from over one hundred House Democrats. Were the health care provision to remain in a long-term CR, however, it is unlikely that many Democrats would support it. Indeed, when the House voted to repeal the law in mid-January, only three Democrats supported the move.

But how much in additional spending cuts would the Senate support? Four Democrats in the Senate voted against the most recent CR, and President Obama’s proposal to cut an additional $6.5 billion has drawn further criticism from some Senate Democrats. Tom Harkin, a senior Senate appropriator and chairman of the Senate Health, Education, Labor and Pensions (HELP) Committee, said the White House should have focused on taxes and mandatory spending rather than spending cuts to discretionary programs.

“How many people know that the CR … cuts out all federal literacy programs in this country? We just wiped them all out,” said Harkin, who voted against the most recent CR.2 “I’m disappointed in the White House—I’m greatly disappointed, so far, in what they have been advocating, which basically is sort of buying into ‘We’ve got to cut everything out of discretionary.’ The White House is wrong on that.”

On the other end of the political spectrum, some Senate Republicans voted against the most recent CR because they thought the spending cuts were too small and did not come close enough to the spending cuts that passed the House. “The cuts in this bill are a start, but don’t go far enough to bring fiscal sanity back to Washington,” said Senator Orrin Hatch (R-UT), one of five Republicans in the Senate who voted against the most recent CR.

Another option would be to pass another short-term CR that would extend the debate for another few weeks. In late February, Boehner sounded content to pass a series of additional CRs as long as they continued to cut spending. “If they won’t eat the whole loaf at one time, we’ll make them eat it one slice at a time,” he said in a February 27 speech.

1 For more information on the cuts included in H.R. 1, go here.
2 To learn more about how the budget negotiations taking place on Capitol Hill will affect funding for the new comprehensive Striving Readers program, register for the Alliance’s March 9 webinar.

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