Two updates from yesterday, summarized below. Lots of action lately — some of it a bit esoteric unless you are really fascinated by federal budget process… Education folks here in DC are very disgruntled over how badly education faired in the House Labor-HHS-Education appropriations bill. Worse than expected. While, again, adult education was level funded, overall funding in the bill is $5 billion below last year. It eliminates a lot of things, and includes a $3.3 billion rescission from the Pell Grant surplus. Also annoying: the House Budget Resolution for FY 2018, which, as discussed below, is almost $5 billion below the caps set by the 2011 Budget Control Act. Again, we’re going to at some point get a CR when they return in September, since they can’t get this all wrapped up before then end of September. Then the assumption has been that they’ll negotiate an omnibus before the end of the year. However, some Republican staffers are apparently talking now about a longer term CR that would stretch into next year. Jeff --- House Appropriations Committee markup · NDD funding left on the table – One refrain from Democrats at the House Appropriations Committee markup of the FY 2018 education funding bill was that the Committee was leaving $5 billion on the table, and could afford to do more than it was for education or other priorities. That is because the House Appropriations Committee, and the House Budget Committee at its markup of the FY 2018 budget resolution, chose to set nondefense discretionary (NDD) funding at $5 billion below the sequester-level cap in law for FY 2018. To fit under that lower NDD level, the Appropriations Committee chose to cut its suballocation – the “302(b) allocation” – for the Labor-HHS-Education bill by $5 billion below last year’s level. (The Committee also cut NDD funding in subcommittee bills but not by as much, and increased NDD funding primarily for veterans health care and homeland security.) (Sarah Abernathy) · Education-related amendments at yesterday’s Appropriations Committee markup of Labor-HHS-Education bill – As is usual, the Democratic amendments were rejected at the markup yesterday. CEF tweeted about the votes on the education-related amendments. In a few cases, Subcommittee chair Tom Cole (R-MO) promised to work to try to accommodate specific priorities if this bill ultimately gets allocated more funding. However, he did ultimately oppose those amendments, which included Rep. David Price’s (D-NC) amendment rejecting the elimination of the $7 million Fulbright-Hayes international education program and Ranking Member Rosa DeLauro’s (D-CT) amendment on afterschool funding. (Sarah Abernathy) House Budget Committee markup · House Budget Committee markup – The Budget Committee rejected Democratic amendments and approved a budget that matches the FY 2018 NDD total that the House Appropriations Committee has allocated among its 12 government funding bills, and that makes deep cuts in future years. Two education amendments were offered and rejected: o Rep. Jackson-Lee (D-TX) Pell grant amendment – this amendment <https://democrats-budget.house.gov/sites/democrats.budget.house.gov/files/documents/27%20-%20Pell%20Grants.pdf> added $2.8 billion intended to increase the maximum Pell grant for next year by $500 and then let it rise by inflation thereafter. o Rep. Wasserman Schultz (D-FL) early childhood education amendment – this amendment <https://democrats-budget.house.gov/sites/democrats.budget.house.gov/files/documents/22%20-%20Invest%20in%20Early%20Childhood%20Development.pdf> added funding to invest in early childhood education and care, providing funding intended for Head Start, CCDBG, and Preschool Development Grants. (Sarah Abernathy) · Reconciliation instructions – Title II of the budget resolution requires 11 House Committees to submit recommendations by October 6 for changes in law to achieve specified amounts of deficit reduction in their jurisdiction – a total of $203 billion over ten years. These recommendations would be packaged into a reconciliation bill that gets fast-track protections in the Senate, with the Republicans’ stated goal of using the bill for tax reform. The House Education and the Workforce Committee is instructed to recommend $20 billion of savings, but that is a floor, not a ceiling, of the spending cuts that could be in the package. The budget does not say what it assumes the Committee will cut to achieve those savings. There has been much discussion about the optics of requiring mandatory spending cuts in a package designed to provide tax cuts. (Sarah Abernathy) · Additional mandatory spending cuts – The budget resolution assumes much deeper mandatory spending cuts than the $203 billion required under the reconciliation directive. For just the education budget function, the resolution assumes $211 billion in mandatory spending cuts over ten years. During the walkthrough at the markup, the Republican Staff Director said those cuts were primarily to student loans, and that the budget assumes all Pell grant spending is on the discretionary side, which means that the existing mandatory Pell grant funding is eliminated. If the budget assumed all the changes to student loans in the President’s budget (whichtotal $100.5 billion using the Congressional Budget Office’s scoring <https://www.cbo.gov/system/files/115th-congress-2017-2018/dataandtechnicalinformation/52891-education.pdf>), eliminated all mandatory Pell grant funding ($81.4 billion), and eliminated the Social Services block grant ($17 billion), there’s still another $12 billion of unexplained spending cuts in this budget function. (Sarah Abernathy) · Discretionary education cuts – There’s no way to characterize what the budget resolution has in mind for discretionary funding for each budget function because it has hundreds of billions of unallocated NDD cuts over ten years, which could fall on any NDD program. Those cuts render the funding levels in the individual budget functions meaningless, even though they are already cut significantly except for veterans health care. (Sarah Abernathy) Senate Appropriations Committee sets allocations for all 12 FY 2018 funding bills · Senate increases FY 2018 allocation for Labor-HHS-Education funding – This morning the Senate Appropriations Committee approved its 302(b) suballocations <https://www.appropriations.senate.gov/imo/media/doc/072017%20FY2018%20Funding-Guidance.pdf> for all 12 FY 2018 funding bills, providing an increase of $3.0 billion (1.9%) over the FY 2017 enacted level for the Labor-HHS-Education bill. That level is $8.0 billion above the level in the House funding bill, leaving the possibility for more education funding, but the Committee’s explanation makes that seem unlikely. Its background paper notes that the increase is needed “to offset a significant reduction in available savings from mandatory programs.” Appropriators routinely enact CHIMPS – changes in mandatory programs – that decrease mandatory spending, which the Congressional Budget Office credits as savings for the bill. The Committee can then use those savings to offset higher discretionary spending. For example, if the Labor-HHS-Education bill makes a CHIMP that cuts $2 billion in mandatory spending for Children’s Health Insurance Program (CHIP), it can spend that $2 billion on a discretionary spending with no effect on the bill’s 302(b) allocation of discretionary spending. The Labor-HHS-Ed bill routinely enacts this CHIMP, which in effect cuts spending that was never going to happen. However, this year, there is less available to CHIMP in this program, meaning that to maintain funding at last year’s levels the bill needs more discretionary funding up front. (Sheryl Cohen) · Senate allocations are quite different from the House – The attached CEF table compares 2017 funding by bill with the House and Senate allocations, which are very different, in part because the House and Senate have different top lines. Recall that the House is cutting NDD by $5 billion below the FY 2018 cap level and increasing defense by $72 billion above its FY 2018 cap level. The Senate Appropriations Committee is taking a different tack. Because the Senate has not passed a budget resolution setting a total for FY 2018 spending – what is called the 302(a) allocation – the Senate Appropriations Committee is starting with spending at the FY 2017 level. However, the FY 2017 total is higher than the FY 2018 sequester level set in law through caps for defense and nondefense discretionary (NDD) spending, meaning that the totals in these bills are likely to be cut. The Senate allocations don’t break down the NDD and defense spending by bill. (Sheryl Cohen) · What does this all mean? – The very different assumptions about defense spending, and about priorities in each bill, set the stage for complicated negotiations if/when the House and Senate pass appropriations bills. The House Appropriations Committee has now passed all 12 of its FY 2018 government funding bills and the House is planning to vote on a package of four appropriations bills next week – a “security omnibus appropriations” package. The Senate Appropriations Committee is only debating its second and third bills today, with the remaining unlikely to be considered until the fall. Perhaps by then there will be negotiations to set new, higher defense and NDD caps. (Sheryl Cohen)