NAICU Washington Update

Student Aid Funding in Flux as Two House Committees Approve Divergent Funding Plans

July 20, 2017

Two House committees marked up FY 2018 spending plans simultaneously, yet had very different approaches to funding critical student aid programs.  

The House Appropriations Committee approved its FY 2018 Labor-HHS-Education spending bill, which rejects President Trump’s calls for significant cuts to the core student aid programs.  The bill provides for a $5,920 Pell Grant maximum; restores funding for SEOG and work study; and increases TRIO and GEAR UP.  The bill also increases NIH funding by $1.1 billion.  However, the bill rescinds $3.3 billion from the Pell Grant surplus, and cuts graduate education to $5.7 million, which would phase out the program.

At the same time appropriators were making student aid a funding priority, the House Budget Committee was writing a budget resolution (which is a congressional guideline for spending and revenues and is not signed by the President) that mirrors President Trump’s budget proposal.  The budget resolution proposes to reduce the deficit by $6.5 trillion over 10 years by dramatically reducing the non-defense spending caps and entitlement spending.  Within the plan to cut entitlement spending, the Education and the Workforce Committee is assigned to pass legislation resulting in $20 billion in deficit reduction, which could only come from student loans.  The budget also proposes deficit neutral tax reform.

Normally, consideration of the budget resolution would be the first step in the budget and appropriations process planning for a new fiscal year.  This year is off-schedule for a variety of reasons: 1) the last Congress did not complete FY 2017 appropriations before adjourning, so this Congress had to finalize funding, which was not done until May of this year; 2) a newly elected president always takes longer to issue a budget proposal, which Trump submitted in May, instead of February; 3) Congress wanted to use the FY 2017 rules for the consideration of health care reform, so they delayed work on the FY 2018 budget resolution; and 4) by law, in the absence of a budget resolution, appropriators are allowed to start writing spending bills after May 15, so the committee decided to move forward with their work.

The next steps are uncertain.  For the appropriations bill, House leadership is considering bundling bills into small packages for floor votes before the August recess.  For the budget resolution, it is unclear if the plan has enough Republican votes to pass; this is not a plan Democrats would support. The Senate leadership has been occupied with health care legislation and will most likely consider these plans in September. 

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