JOINT BRIEFING: BUDGET & APPROPS
Noelle Ellerson, AASA
Kelly Pollitt, NAESP
Overview
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FY 12
 House
Numbers
 Senate Numbers?
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Deal on Debt Ceiling and Deficit Reduction
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Balanced Budget Amendment
The Perfect Storm
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LEAs continue to weather the unfortunate ‘perfect
storm’ when it comes to funding:
 Ongoing
effects of recession
 Cessation of ARRA and EduJobs
 Actual and anticipated cuts in annual federal
appropriations for both FY11 and FY12
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Districts and schools continue to make tough choices
HR 1473, FY11 Appropriations
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Passed Long-Term CR that theoretically cuts $39 billion
The House passed it 260-167 on April 14th (this year)
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59 Republicans voted against HR 1473
108 Democrats voted against it
35 Tea Party caucus members voted for the bill and 21
against.
Speaker Boehner was forced to get the support of
Democrats - 81 House Democrats voted for it
Senate passed it 81-19 April 14th (this year)
Signed by President Obama April 18th
FY11
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It may be wrapping up, but the politics and policies of FY11 budget
discussions have STRONG implications for FY12 discussions.
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Think: DC vouchers
Record-setting series of 7 CRs, including precedent-setting CR cuts
$38 billion below FY10 levels; includes $12 billion in reductions from
previous CRs
Labor, HHS section cut by $5.5 billion (3.36%)
Includes 0.2% across-the-board cut
Title I, IDEA, and REAP were level funded
Administration priorities funded: Race to the Top receives $700
additional funding; Investing in Innovation receives $150 million, and
Head Start receives $340 million
Programs Eliminated in HR 1473
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School Leadership
Striving Readers
Even Start
Literacy Through School
Libraries
Education Technology
State Grants
Arts in Education
Reading is Fundamental
LEAP
Byrd Honors Scholarships
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Education Technology
State Grants
Javits Gifted and
Talented Education
Smaller Learning
Communities
Teach for America
National Writing Project
Close-Up Foundation
Grants to Gulf States
LEA’s
HR 1473 Programs Cut (But Not Eliminated)
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Tech-Prep -$103 million
Safe and Drug Free
Schools National
Programs -$79 million
Teaching of Traditional
American History -$73
million
State CTE grants $31
million
State Assessments -$20
million
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GEAR UP -$20 million
English language
Acquisition State Grants $15 million
School Improvement Grants
-$10 million
Comprehensive Centers -$5
million
Teacher Quality state
Grants -$5 million
ESEA Evaluation -$1 million
FY12
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FY12 budget proposal released Feb 14 (2012-13 school
year)
Despite tight economic times, including non-defense
discretionary budget freeze, education receives historic
increases
Proposal includes massive restructuring in ESEA reauthorization
Policy shift toward consolidation and competitive grants
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Elimination?
Despite overall increases:
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Title I receives $300 million
IDEA received a $200 million increase, falling to 16.5% instead of the
promised 40%
FY12
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House Chairman Ryan (R-WI) introduced his Plan for Prosperity
Cuts the overall budget by $5.8 trillion over ten years.
Non-security discretionary spending is but to pre-FY08 levels and would be
frozen at that level for five years.
Essentially, all of the 10-year reduction comes from cutting non-security
discretionary spending.
Specific details on cuts to education remain to be finalized. That said, I can
give an unofficial summary of the Function 500 (education) issues within the
resolution:
Cuts discretionary funding for function 500 to the pre-2008 level of $80
billion for every year through 2020.
For 2011, it cuts funding by $15.7 billion (16.7 percent).
The cut deepens to 25 percent after 2011 and will translate into a cut of
roughly $30 billion per year.
Passed the House 235-193. While Democrats offered several alternatives,
all were voted down. All Democrats opposed, as did four Republicans
(Jones (NC), McKinley (WV), Paul (TX), and Rehberg (MT)).
FY12
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Full steam ahead. Sort of. Déjà vu?
House is moving along like trains on a schedule. They
anticipate moving 9 of the 12 appropriations bills before the
August recess.
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LHHS scheduled for markup July 26
The FY12 allocation for the LHHS is $18 (11.6%) billion below
FY11 levels, $7 billion below HR 1 (3.9% below FY08 and
roughly equal to the FY04 level). When adjusted for population
and inflation, it’s even less than the FY04 allocation.
Senate is a bit slow, but numbers are ready.
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Have yet to officially release a budget.
Conrad details came out yesterday: $8 billion increase overall.
Within that, Security takes $7 billion cut and non-security increases
by $17 billion. The House-passed budget is a cut of $30 billion
below FY 11, with defense going up $18 billion and non-security
being cut $48 billion.
Debt Ceiling
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Aug. 2 deadline
If we have to start paying our interest, it is roughly
$125 billion per month. The entire USED annual
budget is $60 billion.
If we default and interest rates go up ten percent,
that costs roughly $130 billion over 10 years, or
more than $1 billion per month.
1976 Case Study: Defaulted for Days, Paid Higher
Interest for Years
Debt Ceiling
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Conversations ongoing – meetings at White House
daily
Democrats want inclusion of revenue (taxes)
Republicans want to cut spending
Balanced Budget Amendment
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HJRes1: Constitutional Balanced Budget Amendment
 Requires
balanced budget as soon as FY18
 Caps spending at 18% of GDP
 Requires supermajority for any vote to increase taxes
 Passed out of committee (20-12) June 15
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Up for vote this week!
Balanced Budget Amendment
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The last time overall spending was 18 percent of GDP was back in 1966,
pre-dating ESEA, IDEA, Medicaid and Medicare.
An absolute spending cap overlooks the realities of ever-growing programs
like Medicare and Social Security. Even if growth is somehow slowed, there is
still growth, leaving an ever-smaller slice for discretionary programs (like
education).
A proposal of this magnitude makes the House HR 1 budget proposal from
this February look like a walk in the park.
Requiring a balanced budget, no matter how the economy was performing,
would force policymakers to cut spending and/or raise taxes just when the
economy is weak or in recession--the exact opposite of good economic policy.
The requirements of a 2/3 vote to raise taxes and limiting spending to 18
percent of GDP would prevent policymakers from closing even the most
outrageous tax loop holes.
Questions?
Noelle Ellerson
nellerson@aasa.org
Sasha Bartolf
sbartolf@aasa.org
Kelly Pollitt
kpollitt@neasp.org