NAICU Washington Update

Senate Moves Toward End Game on Student Aid Appropriations

October 25, 2007

The Senate has passed the FY 2008 Labor-HHS-Education appropriations bill by a veto-proof margin of 75 to 19. The October 23 vote is a victory for student aid - in a roundabout way.

First, the vote margin raises the stakes for President Bush's threatened veto of the largest domestic spending bill. Subcommittee Chairman Tom Harkin's (D-Iowa) goal in bringing the education appropriations bill to the floor was getting it passed and to conference with the House in a form, and with a vote margin, that would serve as a strong counterbalance to the veto threat. In July, the House had fallen four votes short of reaching a veto-proof margin.

Harkin's success was derived from his convincing domestic spending advocates not to offer big amendments that would have increased education and health funding, and would have cost key votes from budget hawks. Also critical was his decision to drop controversial stem cell language. In conversations with stakeholder groups like NAICU, Harkin asked organizations to avoid even "good amendments, because they could jeopardize passage." Then when they brought the manager's amendment to the floor, Harkin and Ranking Member Arlen Specter (R-Pa.) dropped the controversial stem cell language as a "compromise," to show the president they meant business. This helped bring on 29 Republicans in support of the bill.

Secondly, the vote margin helps ensure that Pell Grants won't be underfunded in the end game this year. The Senate bill maintains a Pell Grant maximum of $4,310, and flat-funds the other student aid programs. However, it will cost an additional $826 million next year just to keep Pell at $4,310. The House bill spends $2 billion to increase Pell to $4,700. Unfortunately, when the House and Senate meet to conference the bill, we expect that, at best, the Pell maximum will stay at $4,310. This is because the Pell Grant program has already received a huge infusion of new funds from last month's budget reconciliation bill. With so many other domestic programs vying for money, the new reconciliation bill funds could end up hurting our chances of even keeping the baseline funding for Pell at the current $4,310.

What's at Stake: Funding for the Pell Grant Program

As demoralizing as it is to anticipate that final Pell appropriations may only maintain a $4,310 maximum grant, an even worse scenario is that the maximum grant could actually end up being cut. If the president doesn't sign the bill, and if Congress then can't override the veto, the president's proposed overall level of spending would be part of the necessary negotiations. The presidents' budget proposed a Pell Grant maximum of $4,600, with a baseline of only $4,050 from appropriations (anticipating that Congress would make up the difference with additional Pell money from the reconciliation process).

A more optimistic scenario, though, is that we manage to keep the Pell maximum in the appropriations process at $4,310. Then the added reconciliation funds would bring the total Pell Grant for next year to $4,800.

Next Steps: We May Be Calling on You

The Senate named conferees immediately after passing the bill. This means the conference with the House will be quick, since informal conversations had already begun in advance of the Senate vote.

Once the bill is finalized, Harkin and House Chairman Rep. David Obey (D-Wis.) would like support from advocacy groups to garner the largest votes possible for final passage in the House and Senate. We're asking NAICU presidents to be prepared to respond to action alerts over the next few weeks, asking members of Congress to vote for final passage, and asking the president to sign the bill.

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