NAICU Washington Update

Congressional Outlook on FY 2015 Budget

March 07, 2014

Because last year’s budget process went into January, this year’s process, for FY 2015 is starting late – in March instead of February. House and Senate Budget Committee Chairmen Rep. Paul Ryan (R-WI) and Sen. Patty Murray (D-WA) agree that the total spending amount that was set in the January budget deal stands for their work in this cycle’s appropriations process. They will be hard at work on budget issues this spring, but are taking different approaches. Both Murray and Ryan have released reports in the last week, outlining where they might go with a budget process this year.

Murray clearly does not see the need for a budget resolution, and believes appropriators can get to work on FY2015 bills because the Bipartisan Budget Deal set the spending total in law. Her report, which focuses on the successes of the budget battles over the last five years, notes that there has been $3.3 trillion in deficit reduction over that time, and promotes an optimistic outlook for the economy. With that in mind, she says it’s time for Congress to pay attention to the other “deficits” in our country, and make new investments in jobs, education, infrastructure, R&D and our global competitive edge.

While Sen. Murray will not write a budget resolution, her report will help frame the Senate Democratic message on spending, deficit reduction, and increasing revenues during the process this year.

Rep. Ryan is expected to produce a budget resolution for the House. With the top line spending number set, he can look at how to reform entitlement programs and find additional deficit reduction. His recent report, The War on Poverty: 50 Years Later looks at how the government has spent trillions of dollars on duplicative, counter-productive anti-poverty programs; programs which have not had their intended impact as poverty rates are the same, if not worse, than 50 years ago. It is a thoughtful, academic piece that gives a program-by-program analysis of history and effectiveness.

Rep. Ryan’s report includes a chapter on Education and Job Training which reviews 24 federal programs and four tax expenditures across seven agencies, with total spending of $94.4 billion in FY2012. Three programs in student aid are reviewed – Pell Grants, SEOG and TRIO – from the angle of looking at evidence to see if the program is serving its purpose. Multiple sources from government and academia are referenced as resources for the evidence.

The critiques of the Pell Grant program are that it is too broadly available to college students, not just low-income students; and that while the evidence recognizes that “the research is mixed,” increases in Pell grants result in increased tuition. For TRIO, the report references an OMB analysis that finds three of the six TRIO programs – Student Support Services, Talent Search, and McNair Post-Baccalaureate Achievement – were “moderately effective” in meeting the intended purposes of the programs, while the others were found “ineffective” or “not demonstrated.” And finally, for SEOG, the report notes that there is “little, if any, academic research on the effectiveness of SEOG.” However, the “the bulk of aid goes to private colleges, which traditionally enroll a much smaller share of low-income and/or Pell-eligible students,” and that “students at very high cost institutions are more likely to receive a SEOG.”

It is important to keep this research in mind, as it will be instrumental in how the House Republican Caucus approaches funding for these student aid programs this year; and more broadly how they approach any work on entitlement reform in the budget process.

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