Grand Gesture, Grand Bargain or Nothing at All

The Budget Crisis

Sequestration is a fact of life. But will there be a solution before deep pain and suffering occurs? On March 1, sequestration became a reality, not just a piece of legislation. Its impact will begin to play out April 1 (of all days).

The political drama continues in Washington, D.C., with the White House, Congress and individual agencies. One thing is for sure: no one really knows the true impact of the budget cuts on the nation’s economy, national security, defense preparedness and federal programs and services. We are just seeing a glimpse of the depth and breadth of those cuts, but there are nuances with numerous formula-grant programs that may mean increases to some recipients and drastic cuts to others.

For instance, the U.S. Department of Education announced what some cuts would be to programs such as ESEA Title I, but the Council of Great City Schools did its own analysis of the impact on its member districts based on the newest census data and found some districts are winners while others are losers. It will take a while before we know the real numbers for many programs administered by agencies across the federal government.

It should be noted that Pell Grants are not affected by sequestration. All other education program cuts do not take effect until the 2013-2014 school year except for the Impact Aid program. Those cuts are occurring. Education Secretary Duncan is considering allowing school districts to ask for waivers on certain program funds provided in FY 2013, so they can be carried over if not obligated and spent during the current fiscal year. There are pros and cons to this strategy. It may lessen the blow of sequestration, but it also can put in harm’s way future appropriations if Congress perceives that additional funding increases are not needed since monies are not being spent, but being saved for a rainy day.

One thing we do know. Very few, if anyone, like the idea or implementation of sequestration. Will this be enough of an impetus to resolve the budget crisis and find common ground to address the deficit?

For the first time in many years, both the House and Senate have presented budget blueprints for the next 10 years — maybe better characterized as budget dreams! They differ significantly in approach and solutions. Each blueprint lays out the tax, spending and deficit reduction strategy for each body. This means the majority party in the House and Senate.

The House Budget drafted by Congressman Paul Ryan is very similar to what he presented last year, except for additional revenues from tax changes. For the first time in four years, a Senate Budget blueprint has been produced under the leadership of Senator Patty Murray. There are few parts of both budget blueprints where there is common ground. Most likely, each will pass their respective bodies prior to the Congress’ holiday recess. But then, where do they begin to negotiate and compromise?

The deadline for each house to pass their respective budget blueprints is April 15. But they should be voted on by March 22.

At the same time, President Obama has been carving out his role by hosting dinners with members of Congress and talking with Republicans and Democrats on Capitol Hill to try to find some common ground from which to work. He is trying to find allies who are at least willing to discuss where they can begin the process of finding a solution. In some ways, this approach is an end around the leadership of both houses — though everyone is aware of what is happening.

While the House just passed a continuing resolution (CR) for FY 2013, the drop-dead date for both bodies to have an agreed upon CR is March 27. The Senate version of the CR drafted by Senator Barbara Mikulski (Chair of Senate Appropriations) is ready to go with numerous amendments, and there should be a vote on it by the Senate no later than March 22. In all likelihood, the House will defer to the Senate’s version of the CR and thus avoid a government shutdown. House Speaker John Boehner has vowed to avoid such an action. The Senate has yet to address the CR.

The other deadline that must be addressed in the near future is May 19, for the debt ceiling. This may be included in the CR, which would address this ongoing problem.

Also, the President is two months overdue in presenting his FY 2014 Budget proposal. It will be presented either the week of March 25 or the first week of April, after both Passover and Easter. This is very unusual, but so are the other budget related issues with which confronts us.

Other Legislative Action of Interest

Several efforts are underway to find bipartisan support on selected issues. In the Senate, there seems to be bipartisan support on gun control with background checks, school safety and ammunition clips, but not yet on assault weapons. Others are trying to work together on e-rate, immigration policy and tax reform.

The House passed the Skills Act, which is a reauthorization of the Workforce Investment Act on Friday, March 15. During the House Committee mark-up and vote, the Democrat members of the committee walked out of the mark-up and vote. So far, nothing has been done in the Senate during the current session.

Congressional hearings are being held student financial aid, school safety and e-rate. There may even be some movement on the reauthorization of No Child Left Behind. There is a significant amount of discussion begun by Senator John Rockefeller, IV, about expanding and changing the e-rate, based on what It has accomplished since its inception in 1996, the changes in technology and changing needs and demands.

However, a majority of Congress’ focus is on ascertaining the impact of sequestration on our security, military preparedness, programs and services, and examining what changes can be made in tax reform, entitlement programs, health care reform and program budgets as solutions to the budget deficit. Also, there are strong bipartisan efforts underway on immigration reform and gun control.

Three issues in education seem to have created the most interest at the moment. These are the financial impact of sequestration on programs delivering services to students, the President’s early childhood education proposal and improving the structure of federal student financial aid. And, maybe, some expectation for a reauthorization of the Elementary and Secondary Education Act, since Senator Tom Harkin will be retiring in 2014 — a last hurrah!

Conclusion

There is some hope for a compromise. Much of it will depend on how willing each side is to make adjustments to their current positions, and how much give and take can be accomplished. As was stated earlier, there is little in common at the moment, but the hard work has yet to begin to determine what can be tweaked, dropped, added and massaged to draft legislation that addresses the budget deficit. Overwhelmingly, the public no longer appreciates strident positions and is looking for vision, flexibility and leadership, which has been lacking from both ends of Pennsylvania Avenue.

The next 30 to 60 days will be a good indicator of how much commitment there is on both sides of the aisle to resolve the budget mess.

Fritz Edelstein is a principal in Public Private Action, a consulting group. His work focuses on strategic government and constituent relations, business development strategy, advocacy research and policy analysis, strategic planning and resource development, and advocacy, outreach and public engagement. This work includes producing Fritzwire, the education Internet newsletter providing timely information on education and related issues. Read Fritzwire, Education’s Water Cooler, everyday to keep up with what is happening in education around the nation and in Washington, D.C. To subscribe write: fritz@publicprivateaction.com.

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