Fleshing Out the Federal Budget

A commonly held view of President Obama within higher education is that he "gets it" — as in he recognizes (in contrast to his predecessor, it is often implied if not said) the importance, even the centrality, of academe’s major products: education, research and training. He says the right things with his words (in speeches like those he gave to Congress in February and before the National Academy of Sciences last month) and his actions: specifically how his administration, in its first months, has allocated one-time money to stimulate the economy and envisioned reshaping federal spending in the 2009-10 budget outline the White House released in February.

As the Obama administration took the wraps off its full 2009-10 budget plan Thursday, there was plenty of praise from advocates for education and research about a spending plan that would dramatically increase spending on student financial aid and significantly bolster support for basic scientific research, particularly in the physical sciences.

But as administration officials took pains at virtually every turn to note that they were trying to be both strategic and "fiscally responsible" — code words for generously supporting key priorities but necessarily shortchanging other things in response — rare sounds of dissatisfaction with the Obama budget bubbled up from within higher education on Thursday.

The biggest complaints came from representatives that care about the (many) parts of the Education Department budget that received no increase in funds, as the administration focused virtually of the new higher education money it would provide in 2009-10 on increasing aid for students, most notably by creating an assured and steadily growing stream of funding for Pell Grants.

Maureen Hoyler is executive vice president of the Council for Opportunity in Higher Education, which lobbies on behalf of the TRIO programs for low-income students, which was frequently a target for budget cutters during the Bush administration. Hoyler said that by focusing all of its new resources on financial aid and proposing flat funding for TRIO and programs like Gear Up that help economically disadvantaged students prepare for and succeed in college, the Obama administration was taking an overly narrow approach to Obama’s goal of ratcheting up the country’s college-going rate.

"This is a one-shot budget," Hoyler said. "The president’s goal is not a simple one to achieve, since right now only 8 percent of low-income students graduate from college, and we’ve historically underestimated the complexity of getting low income students into and through college. But this budget says they don’t get the complexity of the issue facing low-income, first-generation students, and think they can fix it just with money and some research."

Similar disenchantment about the administration’s perceived failure to put its money where its mouth is came from advocates for career and technical education. Despite the president’s lofty rhetoric about how every American should have at least a year of education or career training, the Education Department proposes no increase in funds for the Carl D. Perkins Vocational and Technical Education Program, said Kimberly A. Green, executive director of the National Association of State Directors of Career and Technical Education Consortium. “

"Level funding this program is like putting a temporary patch on a hole in a dam that is ready to burst," she said in a news release. "Demand for these programs is up. The pace of technological change is increasing. Equipment needs are growing." Perkins funds have remained flat since 2002, her group noted; in addition, the Labor Department budget would keep level funding for most elements of the Workforce Investment Act, the country’s primary job training program, except for a $71 million increase in training for unemployed or dislocated workers.

And the Federation of American Societies for Experimental Biology, which puts biomedical science atop its list of priorities, suggested a disconnect between the president’s words and actions. "We would like to have seen the strong support for medical research expressed by President Obama matched by sizable funding increases for the National Institutes of Health in his FY 2010 budget," said Richard Marchase, the group’s president.

In presenting the budget, administration officials generally shrugged off those and other complaints. They emphasized the fact that the federal government has just poured tens of billions of dollars into education, job training and other discretionary programs as part of the economic recovery law Congress passed this winter, and noted that the country is facing a future of exploding deficits and must find ways to constrain spending, generally, in the years ahead. (Republicans weren’t buying the administration’s seriousness on the latter point.)

In that context, the Obama budget’s recognition that education and science need and deserve disproportionate levels of financial support is gratifying, John Holdren, the president’s science adviser and director of the White House Office of Science and Technology Policy, said at a briefing on the research and development budget Thursday at the American Association for the Advancement of Science. "We in the science and technology community have done better than just about any [other] constituency," Holdren said. "We have a president who ‘gets it’ — that investments in science and technology are just that: investments in our future."

Bob Shireman, deputy under secretary for education, said that "primary reaction" of the career education people he had talked to was that they were "thrilled that we didn’t eliminate [vocational education funds] like the previous eight budgets did" during the Bush administration. "Given the current budget situation, flat funding is the situation that the majority of programs are in, so that we can put our priority on a couple of very big things, like the Pell Grant increase."

Because the new administration unveiled its spending plans for 2010 in two stages, with an initial splash in February and the more detailed look Thursday, there were relatively few surprises in the hundreds of pages of budget documents and program-by-program numbers released yesterday (okay, we didn’t read them all…). But there were a few twists, including about the centerpiece of the administration’s higher education plan: to end its payments to lenders in the guaranteed student loan program and use the proceeds to ensure a dedicated, growing stream of funds for Pell Grants.

The Education Department had touted the proposal as turning the Pell Grant into an entitlement like Social Security, such that the money comes from the ("mandatory") part of the federal budget that does not require approval from Congressional appropriators each year. Buried deep in the budget documents, however, was a description of the envisioned Pell program as an "appropriated entitlement," which struck many as an oxymoron and led to concerns from some higher ed lobbyists that the promise of a guaranteed stream of money, shielded from the whims of budget cycles and political fights, might be illusory.

But Education Department officials sought to reassure them that the change — which was almost certainly proposed as a way to ensure leading Congressional Democrats that they would still play a role in setting funding for the government’s main college aid program — would not materially change the plan. As department officials envision it, they would amend the Higher Education Act to set the maximum Pell Grant at $5,500, an increase of $769 over the current figure, and then have it increase annually (and automatically) by the rise in the Consumer Price Index plus 1 percentage point.

The money would come from the mandatory part of the budget, so that spending on it would not compete with other domestic priorities, but the twist is that that level of increase would kick in unless Congress specifically decided otherwise, said Shireman. "The appropriations committees would have the opportunity, if they wanted to, to give more or less, and if they wanted to increase it, they would have to find the funds for doing that."

The other revelation out of the Education Department’s budget documents Thursday could be found in one brief, simple sentence about the Academic Competitiveness and National Science and Mathematics Access to Retain Talent (SMART) Grants, which were created by Congress as part of budget reconciliation legislation in 2006 and have never been particularly embraced by college officials, partly because they mix students’ financial need and academic merit as criteria.

The section of the administration’s budget summary about the two grant programs closes with the terse "The ACG/SMART programs expire after 2010," and Shireman confirmed in an interview Thursday that the Obama administration planned to let the programs lapse after the authority for the programs expires next year. "That was created as a limited term, mandatory program, and we have no intention to renew that temporary mandatory funding," he said.

Highlights of the administration’s 2010 budget for higher education are below, followed by a table with more details:

* Transform the Pell Grant Program into an entitlement program that, like Social Security and Medicare, would ensure a minimum level of funding that would increase each year. This would spare the government’s bedrock need-based financial aid program from having to depend on the whims of Congress each year.

* Eliminate the bank- and lender-based guaranteed student loan program beginning in July 2010, originating all loans in the government’s direct loan program and requiring lenders and other contractors to compete to "service" (collect) the loans once issued. This proposal was immediately attacked by lenders and Republican lawmakers who have historically supported the private-sector program and opposed excessive government takeover of student lending.

* Make permanent the $2,500 tax credit for families’ college spending (including books and computer expenses) that Congress enacted as part of the economic stimulus package this month. Unlike the current Hope tax credit, which the newly created credit was designed to replace temporarily for 2009 and 2010, the "American Opportunity Tax Credit," as the administration is calling it, is partially refundable, which means that it will be available even to people from lower-income families that do not pay sufficient taxes to qualify for existing college tax breaks.

* Revamp the Perkins Loan Program to make its loans available to significantly more students at significantly more colleges, using significantly different criteria for awarding them. While that sounds like a uniformly good thing, previous proposals to alter the Perkins program have run into opposition from the institutions that have historically benefited the most from the status quo — especially four-year private colleges and public universities that get the most money from formulas that reward institutions based on their longevity in the program and, to an extent, on how high their tuitions are.

* Create a $2.5 billion "access and completion incentive program" ($500 million a year for five years) that would give grants to states and other entities to pay for programs designed to increasing students’ success in college, with a particular focus on students from low-income and other disadvantaged backgrounds.

* Provide level funds for almost all other Education Department sponsored college programs, although the department would provide small increases in discretionary funds for several programs for minority-serving colleges to make up for mandatory funds from 2008 and 2009 that expire this year.

* Provide $6 billion in new funds in 2010 for cancer research through the National Institutes of Health, part of the Obama administration’s effort to double such spending.

* Give $950 million more funds to the National Science Foundation than it received in 2008, to a total of just over $7 billion, part of an effort to double funding for the basic research over 10 years.

* Increase funds for the Corporation for National Service by $261 million, in large part to start down the path of increasing the number of AmeriCorps national service participants to 250,000 from the current 75,000 a year.

* Spend $17.5 million more on the National Endowment for the Humanities, although $10 million of that money would be so the endowment could take over an arts program now operated by another federal agency.

INSIDE HIGHER ED

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