The National Fiscal Commission Co-Chair’s Proposal: Right Problem, Wrong Prescription

While the Co-Chairs of the National Commission on Fiscal Responsibility and Reform acknowledge in their report, The Moment of Truth (released on December 1, 2010), the need to “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,” discretionary spending – from which most federal education dollars flow – represents a disproportionately large share of total deficit reduction from 2012 to 2020.

Other programs important to children and families that enable kids to come to school ready to learn also fall under the discretionary spending category.

In their proposal, the Co-Chairs have front-loaded the cuts to discretionary spending, which represent 96 percent of total deficit reduction in 2012, 64 percent in 2013, and 59 percent in 2014 before averaging about 50 percent through 2020.  Overall, discretionary spending would be almost $2 trillion less than under  President Obama’s budget request from 2012-2020.

Within the discretionary spending category, non-security spending, which excludes defense, international affairs, veterans programs, and homeland security, would be 14 percent less in 2013 and 22 percent less than in 2020 compared to 2010 appropriations, adjusted for inflation, according to the Center on Budget & Policy Priorities.  Here are a few examples of what this means for individual education programs if the proposal was enacted into law. (For more detailed information, here are a series of charts on the fiscal commission proposal).

In 2013, Federal Pell Grants could be cut by $2.5 billion, affecting aid to at least 1.2 million needy college students.  By 2020, Pell Grants could be slashed by $4.7 billion, which would reduce aid to at least 1.9 million students.  Cuts in aid could force students to drop out of college and would make the goal of increasing the nation’s rate of college completion that much harder to achieve by 2020.

Similarly, funding under Title I, which is intended to help poor students catch up to their peers, could see cuts of $2.1 billion in 2013 and $3.9 billion in 2020.  At least 2.8 million students would see their academic supports reduced or eliminated as a result in 2013.  The number grows to at least 4.4 million students in 2020.  This would stymie ongoing efforts to close persistent achievement gaps.

Likewise, funding for children with disabilities could see cuts of $1.7 billion and $3.1 billion in 2013 and 2020, respectively.  The costs of educating close to 1 million special needs students in 2013 and 1.5 million in 2020 would still be there, but now would be shifted to states and local school districts as a consequence of less federal support.

The country does face a long-run debt crisis that is real; however, the main driver of this problem is not non-security discretionary spending.  Congressional Budget Office (CBO) baseline projections suggest that spending on children’s programs will decline modestly as a percentage of Gross Domestic Product (GDP) even before any action is taken to tackle the deficit.

Stabilizing the nation’s debt by 2020 through non-security discretionary spending cuts alone would require eliminating nearly all such spending, including education.  Also, it would be unwise to make deep spending cuts too quickly as the Co-Chairs have proposed while the economic recovery remains uneven.  The CBO projects that unemployment will still average 8.4 percent in 2012 and that the gap between actual GDP and its potential level will not be closed until the end of 2014.

The Co-Chairs were right to single out education, infrastructure, and high-value R&D as areas of government spending that have been proven to generate long-lasting benefits historically, often with high returns.  Yet, the Co-Chair’s own plan on spending cuts puts these same program areas at risk.

Several other organizations have recently released plans to rein in the deficit, but do so with fewer cuts to non-security discretionary spending, such as the bipartisan plan released by The Debt Reduction Task Force (co-chaired by Senator Pete Domenici, a Republican and Dr. Alice Rivlin, a Democrat).

The sacrifices required by the Co-Chair’s plan when it comes to important federal programs such as education far exceeds what is necessary; and, inadvertently, would hinder long-term economic growth – making the goal of deficit reduction more elusive.

For more on this topic, see the NEA’s Education Funding resource center.

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