NAICU Washington Update

Congress Gives in on Funding and Goes Home

December 20, 2007

After a veto of the education appropriations bill, and negotiations on two omnibus bills that never saw the light of day, Congress finally passed H. R. 2764, the FY 2008 omnibus appropriations bill, before adjourning the first session of the 110th Congress, on Wednesday, December 19. President Bush has indicated he will sign the bill.

Congress and the White House had a month-long stand-off over domestic spending in which Congress finally blinked, accepted the president's total spending request of $933 billion, but then spent it on its own priorities. Congress had to cut $22 billion below its preferred spending level to finalize this deal with the president.

To meet this target, the bill employs a 1.7 percent across the board cut, which is applied to all programs and projects except for the Pell Grant program. The Pell Grant program is funded at $14.215 billion, and the maximum grant is cut below the current year’s level to $4,241. However, with the $490 from reconciliation, the total maximum grant increases to $4,731 for FY 2008. That is $421 more than last year, though $69 less than we all expected. The "cut" is applied here and the program is exempt from the across the board cut in legislative language so that OMB cannot make additional cuts to the program when it implements the law.

The across-the-board cut was applied to all the other student aid programs, which are funded as follows:

  • SEOG, $757.465 million
  • FWS, $980.492 million
  • Perkins cancellations, $64.327 million
  • LEAP, $63.852 million
  • TRIO, $828.178 million
  • GEAR UP, $303.423 million
  • Javits, $9.530 million
  • GAANN, $29.542 million

This cut puts SEOG, Perkins, LEAP and the graduate programs below last year; keeps TRIO and GEAR UP level; and bumps FWS slightly above last year.

It is difficult to call this a victory when the high water mark was the House bill's $4,700 appropriated Pell Grant maximum which, with the additional $490 from reconciliation, would have put the total at $5,190. However, back in February, the president's budget proposed to eliminate SEOG, LEAP, and Perkins, and fund the Pell Grant maximum at $4,050. Despite the cuts to the other student aid programs, low-income students will see an increase in their Pell Grant next year because of the reconciliation money.

Small victories on the policy front were included in the bill through NAICU's efforts on two key provisions: (1) legislative language directing the Department of Education that no funds may be used to implement revisions to accreditation until the Higher Education Act reauthorization is enacted; and (2) report language clarifying that the bill does not include the funding requested by the Administration for a pilot program to develop a student unit record data system.

Despite threats to cut earmarked projects, there are $600 million in such projects in the Labor-HHS-Education bill alone, and roughly $12 billion in the entire omnibus bill.

It has been a long and winding road, and your contacts with members of Congress over the course of the budget and appropriations process this year are greatly appreciated.

The 110th Congress will reconvene briefly to begin its second session in January, and will get right back to budgeting, with the release of the president's FY 2009 budget on Monday, February 4.

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