EDUCATION FUNDINGLooking Back, Looking Forward

7/6/11

Joel Packer, CEF Executive Director: JPacker@cef.org

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The Committee for Education Funding (CEF) is the oldest and largest education coalition.

We represent over 85 national organizations and institutions from PreK through graduate education – including SSWAA.

For more information: www.cef.org Follow us on Twitter:

www.twitter.com/edfunding

CEF

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Investing in Education

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Rising K-12 Enrollments

Public school enrollment (in thousands)

40,000

42,000

44,000

46,000

48,000

50,000

52,000

54,000

Source: CEF based on NCES Projections of Education Statistics to 2019

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Rising Higher Education Enrollments

Enrollment in Degree-granting Institutions (in thousands)

14,000

15,000

16,000

17,000

18,000

19,000

20,000

21,000

22,000

23,000

Source: CEF based on NCES Projections of Education Statistics to 2019

Unemployment Linked to Educational Attainment

Less than H.S. diploma H.S. graduate Some college or As-sociate's Degree

Bachelor's Degree or higher

0%

2%

4%

6%

8%

10%

12%

14%

16%

May 2011 unemployment rate

6Source: CEF based on BLS data

Median Earnings and Tax Payments of Full-Time Year-Round Workers Ages 25 and Older, by Education Level,

2008

Sources: The College Board, Education Pays 2010, Figure 1.1; U.S. Census Bureau, 2009; Internal Revenue Service, 2008; Davis et al., 2009; calculations by the authors.

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8%

13%

6%7%

0%

2%

4%

6%

8%

10%

12%

14%

Education

All

Republicans

Independents

Democrats

The Public Opposes Education Cuts

Source: January 2011 New York Times/CBS News Poll

If you had to choose one, which of the following domestic programs would you be willing to reduce in order to cut government spending?

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21%

77%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Significantly cut education programs,including No Child Left Behind, HeadStart, and subsidies for college loans

favor

oppose

The Public Opposes Education Cuts

Source: March 2011 Bloomberg News National Poll

Please tell me if you would favor or oppose substantial changes to the program.

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National Commission on Fiscal Responsibility and Reform: “…we must invest in education, infrastructure, and high-value research and development to help our economy grow, keep us globally competitive, and make it easier for businesses to create jobs.”

The Need to Invest

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Federal Reserve Chairman Bernanke: “Cost-effective K-12 and post-secondary schooling are crucial to building a better workforce... Research increasingly has shown the benefits of early childhood education and efforts to promote the lifelong acquisition of skills for both individuals and the economy as a whole. The payoffs of early childhood programs can be especially high.”

The Need to Invest

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Fiscal Year 2011

Over six months late

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In February 2010, President Obama’s FY 11 budget proposed a $3.5 billion (+7.6%) increase for the Department of Education.

In 2010, the previous Congress failed to pass any of the required 12 Appropriations bills.

Congress Fails It’s One Job

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Enacted in December 2010.

Froze all FY 11 education funding at FY 10 levels.

Provided $5.7 billion for Pell shortfall to maintain $5,550 maximum award.

Expired on March 4, 2011.

March 4 CR

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On February 19, the House passed HR 1, a CR for the remainder of FY 11.

It cut ED programs by $11.55 billion or 16.1%!

House-Passed Long-Term CR

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60 programs eliminated, including literacy, school libraries, school leadership, Promise Neighborhoods, education technology grants, math/science partnerships, Arts Education, parent information centers, school counseling, mental health integration, alcohol abuse reduction, tech-prep, SEOG, LEAP.

House-Passed Long-Term CR

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13 more cut, including Pell, Title I, School Improvement Grants, after school, teacher quality state grants, aid for minority-serving institutions.

Head Start cut by $1.1 billion (-15%).

IDEA frozen.

House-Passed Long-Term CR

Negotiated final bill cuts education by $1.3 billion.

Program increases – President’s priorities:◦ Race to The Top = $700 million with $500

million for Early Learning Challenge Fund.◦ Investing in Innovation = $150 million◦ Promise Neighborhoods = +$20 million (total

of $30 million)◦ Head Start (in HHS) = $+340 million

HR 1473 – Final CR

Selected program cuts and eliminations:

◦ All programs cut by 0.2%◦ Striving Readers = -$200 million (eliminated)◦ Even Start = -$66.5 million (eliminated)◦ Literacy Through School Libraries = -$19.1

million (eliminated) ◦ Teacher Quality State Grants = -$480 million

(-16.3%)◦ Education technology state grants = -$100

million (eliminated)

HR 1473 – Final CR

◦ School Counseling = -$2.6 million (-4.7%)◦ Civic education = -$33.8 million (-97%)◦ Javits gifted and talented = -$7.5 million

(eliminated)◦ Career and technical education = -$140

million (-11%)

HR 1473 – Final CR

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Fiscal Year 2011 Total Outlays

2%

5%

19%

7%

13% 19%

10%

25%

Discretionary Security

Discretionary non-security(minus ED)

Social Security

Medicare

Medicaid

Other Mandatory )minus ED)

Interest

Department of EducationCEF based on OMB data

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The Deficit and the Debt Ceiling

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Source: Coalition on Human Needs

24Source: Coalition on Human Needs

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Set low funding caps for “discretionary” programs in annual spending (“appropriations”) bills.◦ House FY 12 allocation for Labor-HHS-ED = cut of

11.6% below FY 11 and 3.9% below FY 08.

Budget Threats

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Squeeze on Discretionary Spending

Series1950

970

990

1010

1030

1050

1070

1090

1110

1130

11501135

1087

1026

1050

1019

1122

FY 11/12 Discretionary Spending

Pres. Obama FY 11

March 4 CR

HR 1

Final FY 11 CR

House FY 12

Pres. Obama FY 12

Billion

s of

$

Source: CEF based on CBO data

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Restructure “mandatory” programs (programs that don’t need annual appropriations)◦ E.g., block grant Medicaid, Food Stamps (passes

costs on to states, reduces individual protections)

Budget Threats

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Change budget rules (e.g., global spending cap, balanced budget amendment, spending‐only enforcement).

Hold must‐pass bill to increase debt ceiling hostage to demand deep program cuts & budget rule changes.

Budget Threats

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Eliminate authorizations◦ HR 1891 reported by Education and the Workforce

Committee eliminates 42 programs from ESEA including school leadership, school counseling, alcohol abuse reduction and high school graduation initiative.

◦ Would cut $412 million below FY 11.

Budget Threats

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Two Budgets – Competing Visions

House-Passed FY 12 V. President's FY 12 Budget

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Would cut Education 18.7% !

Would move us backwards on: ◦ closing achievement gaps ◦ increasing achievement ◦ increasing high graduation, college attendance

and college completion rates

House FY 12 Budget Resolution

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Compared to Final FY 11 CR: Increases Education by $9.1 billion

(+13.3%) Not counting Pell, increase = $3.4 billion

(+7.5%)

President Obama’s FY 12 Budget

FY 2

002

FY 2

003

FY 2

004

FY 2

005

FY 2

006

FY 2

007

FY 2

008

FY 2

009

FY 2

009

w/A

RRA

FY 2

010

FY 2

011

FY 2

012

Reque

st$0

$20$40$60$80

$100$120$140$160

Total Discretionary Total Discretionary w/out Pell

Education Department Funding In billions

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Fiscal Year 2012 Total OutlaysPresident's Proposed Budget

2%

7%

17%

7%

13%20%

10%

24%

Discretionary Security

Discretionary non-security(minus ED)

Social Security

Medicare

Medicaid

Other Mandatory )minus ED)

Interest

Department of EducationCEF based on OMB data

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Increases for Administration priorities:o Race to the Top = +$201 million (+28.9%)o Early Learning Challenge Fund =+$150

million (+100.4%)o Promise Neighborhoods = +$120 million

(+400%)

President Obama’s FY 12 Budget

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• Other ESEA program increases:o Title I = $300 million for new rewards programo School Turnaround Grants = +$65.4 million

(+12.2%)o 21st Century Community Learning Centers

= +$112 million (+9.7%)

o Magnet Schools = +$10 million (+10%)

Elementary/Secondary Education

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Proposes to consolidate 38 existing programs into nine new funding streams◦ All but one would be competitive grants◦ Consolidations contingent on ESEA

reauthorization◦ Education Technology State Grants is

eliminated

ESEA Funding

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o English Language State grants

o Rural Educationo Indian Education

Elementary/Secondary Education

o Migrant Education o Neglected/Delinquento Education for

Homeless o Impact Aid

Programs Frozen

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New Authority

Consolidated Programs

(programs in red were eliminated in final FY 11

CR or previously not funded)

Effective Teachers and Leaders•Ready to Teach•Teacher Quality State Grants

Teacher and Leader Innovation Fund •Advanced Credentialing•Teacher Incentive Fund

Teacher and Leader Pathways

•School Leadership•Teach for America•Teacher Quality Partnership•Teachers for a Competitive Tomorrow•Transition to Teaching

ESEA Consolidations

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New Authority Consolidated Programs

Effective Teaching and Learning: Literacy

•Striving Readers•Even Start•Literacy through School Libraries•National Writing Project•Reading is Fundamental•Ready-to-Learn Television

Effective Teaching and Learning: Science, Technology, Engineering, and

Mathematics

Mathematics and Science Partnerships

ESEA Consolidations

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New Authority Consolidated Programs

Effective Teaching and Learning for a Well-Rounded Education

•Teaching American History•Academies for American History and Civics•Civic Education•Close-Up Fellowships•Excellence in Economic Education•Foreign Language Assistance•Arts in Education

College Pathways and Accelerated Learning

•Advanced Placement•High School Graduation Initiative•Javits Gifted and Talented Education

ESEA Consolidations

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New Authority Consolidated Programs

Successful, Safe, and Healthy Students

•Alcohol Abuse Reduction•Safe and Drug-Free Schools and Communities National Activities•Elementary and Secondary School Counseling •Physical Education•Foundations for Learning•Mental Health Integration in Schools

ESEA Consolidations

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New Authority Consolidated Programs

Expanding Educational Options

•Charter Schools Grants•Credit Enhancement for Charter School Facilities •Voluntary Public School Choice•Parental Information and Resource Centers•Smaller Learning Communities

ESEA Consolidations

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• IDEA State Grants = +$223 million (+1.9%)

o Federal share of special ed costs would fall to 16.5%

o Federal Share per student = $1,765

Special Education - IDEA

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Career and Technical Education state grants would be further cut to $1 billion ($123 million cut, -10.9%)

Career, Technical and Adult Education

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• Pell maximum award of $5,550 maintained

• Total Pell funding = $41.2 billion

Pell Grants

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House Budget Resolution

The Ryan Plan

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FY 12 Budget Resolution passed the House on 4/15 by a vote of 235-193.◦ Party line vote (except four Republicans voted

no).

Assumes all of the education cuts and program eliminations contained in HR 1.

House Budget Resolution

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Further reduces funding for education and related programs, resulting in a cut of $17.7 billion (-18.7 percent) in FY 2012.

The cuts grow to more than 25 percent over time and total $250 billion over ten years.

Cuts the Pell grant maximum award to $3,040 (-45%).

House Budget Resolution

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The Funding Cliff

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Final FY 11 ED funding is $96 billion below FY 09 level with ARRA(-60%)!

The Funding Cliff

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5353

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Source: CEF based on BLS seasonally adjusted employment data

May 2009 May 2010 May 2011 June 20117,700

7,750

7,800

7,850

7,900

7,950

8,000

8,050

8,100

8,150

8,200

8,0878,053

7,892 7,880

207,000 Fewer Local Gov-ernment Education Employ-

eesin thousands

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Next StepsHow small will the box be?

Next Steps Debt Ceiling increase/deficit deal

◦ Need to raise debt ceiling $2.4 trillion through end of 2012.

◦ Republicans want deficit reduction package of at least equal amount.

◦ Republicans say no to any revenues.◦ Debt Ceiling will be reached by August 2.◦ Default would cut federal spending by 44%!

Next Steps

Balanced Budget Constitutional Amendment◦ House Judiciary reported H.J. Res. 1

Needs 2/3rds majority.◦ All 47 Senate Republicans cosponsored S.J. Res. 23

Senate floor next week?◦ Both versions cap spending at 18% of GDP and

require supermajorities for any revenue increases.◦ Could result in cuts to domestic discretionary

programs of 70%!

Next Steps

Cut, Cap, Balance ◦ HR 2560◦ House floor tomorrow◦ Cuts discretionary spending in FY 12 by same

amount as House-passed Budget◦ Sets global spending caps

Require deeper cuts than House budget starting in FY 13

◦ Raises debt limit only if BBA passed

Next Steps

FY 12 Appropriations bills◦ House Labor-HHS-ED Subcommittee markup

7/26; full committee 8/2; House floor week of 9/19

◦ Will require very deep cuts

HR 1891 – ESEA Repeals bill◦ House floor in before August recess?

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Questions?