federal budget

Senator Durbin: Federal Education Spending Boosts Economy

/ The Old Crank

His comments about Medicare and Social Security got most of the attention, but in his speech yesterday at the Center for American Progress, Senator Dick Durbin (D-IL) also came pretty close to taking the position that education should be firewalled off from any further spending cuts that are included in the deal to avert the year-end fiscal cliff.

According to my notes, he said that if the deal includes caps on spending, it should not apply to things that “create jobs and growth and opportunity in our economy.” In that category he included education, infrastructure, and research. In fact, he said that, if anything, we should be spending more in this category, particularly on infrastructure.

He did identify one area where savings could be found in federal education spending: financial aid that ends up at for-profit schools, citing some figures from the Harkins report on the percentage of federal college loans that goes to for-profit tuition and the high default rates on those loans.

Senator Durbin also made the point that probably can’t be said enough: if spending cuts do end up being part of the deal, it’s important to note that $1.5 trillion in savings were already created by capping funding for discretionary programs in the Budget Control Act, and a disproportionate amount of those savings came from non-defense programs. 

Tax Break of the Day

/ The Old Crank

For your next givers vs. takers debate, via Bloomberg:

Theodore L. Jones has held season tickets on the 43-yard line at Tiger Stadium, home of the perennial football powerhouse Louisiana State University, for almost 20 years. Because of the Baton Rouge lawyer’s lobbying in Congress in 1986, he and thousands of other fans get a tax break on donations they make as a condition for buying seats.

The deduction Jones helped craft is now costing U.S. taxpayers more than $100 million a year in revenue that the Treasury can’t collect, based on data compiled by Bloomberg.

h/t: The Chronicle of Philanthropy

History of TANF Block Grants Illustrates Why WIA Block Grants Pose a Threat to Adult Education Funding

/ The Old Crank

Yesterday I gave a short talk on federal adult education policy issues at the WATESOL Fall Convention in Maryland, as part of a larger panel discussion on advocacy.

One of the policy trends I mentioned was the Republican inclination toward reducing the number of federal programs and consolidating them into state block grants, thus providing states with more decision-making power in how those federal funds are used. (They also tend to want to reduce federal spending to begin with, of course, at least for non-defense programs.) Their argument is that state officials are in a better position to decide how federal funding can best meet the particular needs of their state.

I want to describe in detail why I think federal program consolidation is a threat to federal funding for adult education.

My specific point of concern is with House Republicans’ Workforce Investment Act (WIA)  reauthorization bill, H.R. 4297 (The Workforce Investment Improvement Act of 2012), which was passed by the House Education and the Workforce Committee in June, (but has yet to be voted on by the full House, and probably won’t be). This bill would consolidate all of the different WIA job-training programs and convert them into a block grant program for states. It’s worth noting that the 2012 Republican platform also proposes consolidation of federal workforce programs into state block grants “so that training can be coordinated with local schools and employers.”

Title II of WIA—which specifically supports programs focused on helping people improve their literacy skills—is not subject to this consolidation provision. However, H.R. 4297 would give states the option to further consolidate their federal adult education funds—and a bunch of other non-WIA training funds—into a Workforce Investment Fund that would be also created under this bill. This option can be thought of as the turbo version of consolidation. If states chose to do this, they would have a great deal of flexibility on how to use the dollars they assign to the WIF. Most significantly, from an adult education perspective, once Title II money is assigned to the WIF, it would no longer have to be used to serve the specific purposes of Title II.

And the evidence seems to be pretty strong that this is exactly what would happen if this bill (or something like it) should ever become law.

The history of Temporary Assistance for Needy Families (TANF) block grants is instructive. As noted in a recent report from the Center for Budget and Policy Priorities (CBPP), in the years since the Aid to Families with Dependent Children (AFDC) program was converted into a block grant program, states have often used the flexibility of TANF block grants to redirect TANF funds to plug holes in state budgets or free up funds for purposes unrelated to TANF’s stated purposes.

We also know that money tends to flow away from adult education when public officials have the flexibility to re-purpose adult education dollars. The most dramatic example is in California, where in 2009 the legislature passed a bill that gave individual school districts the flexibility to take money from one funding category and move it into another. In the years since the passage of this bill, hundreds of school districts have used funding originally intended for adult education to fill gaps in their K-12 budget. This has reduced overall state adult education funding in California by nearly half, from $754 million to $400 million. (I argued last year that the CBA is probably the worst piece of legislation for adult education in the entire U.S. over the last several years.)

I’ll concede that in some states, it’s possible that enlightened leadership might actually use the flexibility under the Republican approach to increase services for adult education—and theoretically states could even target more money towards individuals not well-served under the current system. (CPBB notes, for example, that in the case of TANF, some funds were used for child care and welfare-to-work programs— and other reasonable welfare reform efforts—particularly in TANF’s early years.) But I think the evidence above suggests that the opposite is more likely over time: that states would tend to use the flexibility of block grants to steer WIA money away from it’s intended purposes, and that this would lead to budget gaps in job training programs when demand is high. State officials would then be tempted to move adult education funds over to job training programs to shore up those gaps, in the same way that school officials in California diverted adult education money to shore up their K-12 budget gaps.

In it’s report on TANF, CPBB warns that “block grants can lead to less accountability, lessened federal direction and oversight, and significant amounts of federal funds being spent in ways that Congress did not envision or intend.” Given what we know, diminished federal oversight over adult education funding will likely result in a substantial reduction in that funding across the country.

WIA reauthorization my be on hold for now, but I expect consolidation to be part of the WIA debate in the next Congress.

What Does Governor Romney’s Pledge Not to Cut Education Spending Really Mean?

/ The Old Crank / 1 Comment

During last week’s debate, Mitt Romney made what sounded like, to many, a straightforward promise not to cut federal education spending if elected: “I’m not going to cut education funding. I don’t have any plan to cut education funding and—and grants that go to people going to college… I’m not planning on making changes there.”

How seriously you take this pledge seems to depend a lot on which candidate you support. But it’s fair to argue that there’s some wiggle room in Romney’s statement. For one thing, we know that presidents can propose what are ultimately going to be de facto program cuts to some programs but call them something else. Over the last several budgets, for example, the Obama administration has proposed what are essentially cuts to certain federal education programs by proposing to “consolidate” them under broader program titles. While that doesn’t necessarily mean that overall education spending gets cut, it can lead to certain funding streams being reduced under the new consolidated programs, whatever they may be. (Thus the administration was able to say that they proposed an overall increase to education in FY11, even while creating conditions that essentially resulted in the elimination of federal funding for family literacy when it consolidated away the Even Start program.)

There are also programs outside the Department of Education budget, such as the Corporation for National and Community Service (to pick one example) that provide educational programs. This you could eliminate CNCS while still claiming you are technically not cutting education, even though elimination of this program would effectively reduce federal education resources. (By this logic, some would argue that eliminating funding for PBS, as Romney did say he would do, would also effectively be an education cut.)

And while the automatic, across-the-board sequestration cuts that are currently set to occur on January 2nd can’t by any stretch be considered Romney policy, if he is elected and those cuts go into effect, he will in fact be presiding over a significant cut to education spending, and/or be working with Congress on legislation to eliminate sequestration with another plan.  His pledge to not cut education spending would be more significant, I think, if he would make it explicit that his sequester replacement plan would leave education spending untouched.

Most importantly, as we’ve seen over the last several years, Congress and the administration often must compromise in order to get a budget passed, and in that compromise the administration may be forced to cut programs it would rather not cut in order to preserve funding for programs it believes are more important. If Romney is elected, we can assume that Republicans will retain control of the House, and possibly gain control of the Senate (where Paul Ryan would have the tiebreaker vote). Doesn’t it seem likely that Congressional Republicans would craft a budget with significant education cuts whether Romney likes it or not? And then what would he do? Would Romney actually pick a fight with his own party over these cuts?

I think it’s safe to assume that the Obama administration did not intend to reduce education spending when it took office in 2009. But that hasn’t prevented federal education spending from declining significantly. Is it reasonable to expect that a Romney administration would make the same effort—and with better success—at fighting off Congressional spending cuts to education than the Obama administration has?

A good followup question to Romney about his debate statement would be: Does your pledge not to cut education spending include a promise to veto any legislation passed by Congress that includes education cuts? I hope this comes up again in a future debate.

P.S. For adult education advocates, it’s also worth thinking about what other areas of the budget Romney might propose going after in order to preserve K-12 and higher education funding. Is adult education part of the education funding Romney is pledging to protect? (Doubtful.) If not, would adult education be even more vulnerable to cuts as Romney struggles to find other areas of discretionary spending to eliminate in order to offset the K-12/higher education spending holds?