NAICU Washington Update

Let the Budget Cutting Begin

February 11, 2011

Next week the budget cutting will begin at both ends of Pennsylvania Avenue. The president's budget will be released Monday, February 14, highlighting a freeze for the next five years that will save $40 billion. Meanwhile, the House of Representatives will be preparing to vote on its first set of cuts, as it considers the continuing resolution (CR) for the remainder of FY 2011.

We were hoping to know the outline of the CR by now, but conservative response to the initial draft this week was that it did not cut deep enough, which sent Republican leaders back to the drawing board.  House Appropriations Chairman Hal Rogers (R-Ky.) has now asked the subcommittees to meet the $100 billion target for the CR.

Once we know what the House proposes for student aid in the CR, and what the president proposes for FY 2012, NAICU will issue an action alert to all presidents.  If there are cuts, Congress and the administration will need to know the impact of student aid funding proposals on your students, your institution, and your local economy.


Since the 2010 campaign season, budget cuts have been a hot topic of debate. The Republican Pledge includes rolling the budget back to FY 2008 levels - a cut of about $60 billion. The new members of the House Republican Study Committee announced their target of FY 2006 levels - a $100 billion cut.  Then there's a Senate coalition that champions a Constitutional Balanced Budget Amendment requiring spending to be capped at 20 percent of GDP. There are many more. 

Now all the campaign promises are being drafted into legislation, and action is being scheduled in Congress on the first of many spending reduction bills expected this year. Everything is on the table, and student aid funding is not exempt.

On February 3, House Budget Committee Chairman Paul Ryan (R-Wis.) announced the new spending total for the remainder of FY 2011, making a $40 billion cut to non-security domestic programs. Then the same day, House Appropriations Committee Chairman Harold Rogers (R-Ky.) announced his subcommittee allocations from Ryan's total, providing $157 billion for Labor-HHS-Education. To meet this new level, Congress must cut education, labor and health programs $6.5 billion below the FY 2010 enacted funding levels.

The student aid programs offer attractive targets for cuts because (1) the cost of the Pell Grant program is over $30 billion, and (2) the campus-based aid programs are misunderstood as grant and loan programs that are duplicative of Pell.  We have been told that the cost of the $5,550 maximum grant is unsustainable, and members are looking for ways to trim it.  We also know that Hill staff are going through the appropriations bills line by line to determine what will be funded or not.  We're particularly concerned that SEOG, Perkins Loans and LEAP could be cut.

The government is currently running on a continuing resolution because the last Congress didn't finalize the FY 2011 spending bills. Before the March 4 expiration of the current CR, Congress must pass another bill to keep the government open. The Senate is waiting to see what the House passes before making its move.

NAICU presidents who attended the Annual Meeting last week heard first-hand the importance of making the case for private non-profit colleges, and making the case for the federal commitment to student aid. At the meeting, members of Congress and high-ranking staff of both parties asked NAICU presidents to tell their local story to their delegations as soon as possible.

We'll be asking you to contact your representatives and senators many times this year. Please take this early opportunity to get acquainted with your delegation, and make sure they understand who we are and what we do.

You may find this February 2 e-mail action alert and NAICU President David Warren's recent Chronicle of Higher Education opinion piece of use in shaping your conversations.

This campaign starts now, and must continue through the year.

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