CAP Looks at Local Control

While the Senate continues its deliberate drafting on Title I Part A and Title II Part A of No Child Left Behind (NCLB) Act, education pundits ponder the future federal role in education. It is all but certain that things will change, but how and when is quite speculative. Congressional Republican and Democratic leadership are both seeking a new approach without compromising the core principles of the law. This balancing act will be difficult and the challenge commands more focus than election year politics may allow. The quality of discussion in Congress, thus far in 2008, has been middling at best.

The discussion has been more interesting off Capitol Hill. For example, the American Enterprise Institute has been hosting many forum discussions of the changing federal role. On March 20th, the Education Sector is hosting a sold out forum on the evolving federal role in education, and, this week, the Center for American Progress released a thoughtful examination of the unique American “obsession with local control” in the new report Nationalize the Schools (… A Little)! It is significant that, despite the political orientation of these organizations, all are coalescing around a more nationalized system of education accountability, an accountability system quite unlike the current NCLB regime.

In Nationalize the Schools, Matt Miller makes his argument by providing the reader with a brief trip through history to identify the roots of local control. “A look at the history of local control as the organizing principle of schooling suggests that an approach that made perfect sense in the 1700s is crippling American education today.” It is crippling, in part, because there are 50 states and 15,000 school districts all setting their own standards and accountability measures, meanwhile the U.S. Department of Education (ED) is trying to coalesce these actions with NCLB’s objectives. It is not working, argues Miller.

In lieu of the current efforts, Miller suggests that the federal role should not be to micromanage the methods of accountability and interventions. ED should, instead, work with states to set rigorous national standards, increase the federal investment and provide a guaranteed baseline for funding per pupil, and to invest in research and development in order to promote innovation in teaching and learning techniques. Miller asserts, generally, that the new federal role must transcend the out-dated tradition of local control. He believes that ED needs to get serious about a new national role in standards and finance that will help the nation meet the challenges of today’s international economy.

The document is brief and, consequently, lacks many critical details, but was not designed for that purpose. Mr. Miller intended it to spark discussion in Washington and capture the attention of Congress. That is happening, albeit slowly, and it is an issue worth tracking in the coming months and years.

Resource:
Matt Miller, Nationalize the Schools (...A Little)! (Center for American Progress: March 2003), http://www.americanprogress.org/issues/2008/03/nationalize_the_schools.html.
Author: DAD

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With Farm Bill Still Stalled, Nutrition Takes Center Stage

Negotiators have not made much progress regarding the Farm Bill this week. The chairmen and ranking members of the House and Senate Committees on Agriculture, Nutrition and Forestry were able to unify against efforts by the House Ways and Means and Senate Finance Committees to gain jurisdiction over certain Farm Bill programs, but they remain at odds with the White House regarding total spending for the bill. Meanwhile, school nutrition gained the spotlight early this week during a Congressional hearing and a legislative action conference.

The current Farm Bill, set to expire on March 15th, will likely be extended through April, as Congress seems unable to reach common ground with the Bush Administration. Despite her very outspoken opposition to an extension, Speaker of the House Nancy Pelosi (D-CA) will allow for a month-long extension, but no more than that. Congressional leaders are growing exceedingly frustrated with the Administration over the Farm Bill negotiations. House and Senate leaders were able to reach a tentative agreement on spending that is $10 billion above baseline spending, $4 billion more than the level the White House supports.

Despite the White House’s concerns, if Congress can find acceptable offsets, President Bush may still sign the bill when it gets to his desk. However, President Bush and Sen. Harkin disagree on what constitutes an adequate offset. About $8 billion of the $10 billion in offsets would come from spending cuts on the Administration’s list. Congressional aides say Administration officials have put their stamp of approval on those spending cuts, but are not likely to support any additional offsets in spending that would require new taxes.

While the Farm Bill sits in limbo, school nutrition advocates descended on Capitol Hill this week, laying out their priorities for the remainder of the legislative session. The School Nutrition Association’s Legislative Action Conference made national nutrition standards a priority this week, but Congress seemed much more interested in the causes and effects of the recent beef recall. At a House Education and Labor Committee hearing on Tuesday, panelists came prepared to discuss efforts to ensure that all foods sold on school property are held to a high set of uniform nutritional standards. Members of the committee, however, continued to zero in on the beef recall, specifically grilling U.S. Department of Agriculture officials on the process by which they monitor the quality of beef processed in the United States.

Some advocates fear that their other messages were lost in the clutter, but the majority of advocates who came to Capitol Hill spent much of their time meeting with their Representatives and Senators, making sure that the delegation is well aware of the nutrition priorities of the various states.

Resources:
Catharine Richert and Adrianne Kroepsch, “Pelosi Won’t Back Farm Bill Extension,” CQ Today, March 6, 2008.
Geof Koss, “Key Farm Bill Players Cite Progress, Unity on Jurisdictional Rift,” Congress Now, March 6, 2008.
Author: SAS

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ED’s Schoolwide Guidance Provides Key Insights

Last month, the U.S. Department of Education (ED) released long anticipated guidance on the fiscal aspects of schoolwide programs. Schoolwide programs, as we know them today, have been a part of Title I since at least 1994. Yet, the fiscal aspects of the schoolwide requirements have remained something of a mystery as state education agencies (SEAs), local education agencies (LEAs) and schools have struggled to implement compliant schoolwide programs.

Section 1114 of the Elementary and Secondary Education Act (ESEA) authorizes eligible schools to consolidate federal, state and local funds to upgrade the entire educational program of the school. A school is considered eligible if it has at least forty percent poverty and it completes a compliant schoolwide plan in accordance with section 1114.

ED’s new guidance finally provides insight into some of the trickiest schoolwide fiscal issues, such as the nature of consolidation, appropriate methods for accounting for consolidated funds and allowable charges in schoolwide programs. The guidance is included in the revised “Non-Regulatory Guidance on Title I Fiscal Issues” and is available at: http://www.ed.gov/programs/titleiparta/fiscalguid.doc.

1. What is consolidation?

According to the new guidance, consolidating funds in a schoolwide program simply means that the school treats identified funds as a single “pool” of money. In other words, the school must identify which programs are considered consolidated in its schoolwide plan and how much each program will contribute to the schoolwide pool. Those identified amounts will be considered the consolidated pool and must be used on allowable schoolwide activities.

The new guidance clarifies that schools do not need to literally combine their funds into a single account in their accounting systems. Rather, the term “pool” is used conceptually to indicate that the identified funds will be used to pay the costs of the schoolwide program without regard to the original source of those funds.

Because consolidation is a conceptual idea (as opposed to a literal combining of funds) the importance of identifying, in the schoolwide plan, the programs that will make up the consolidated pool becomes critically important. Only those funds that are specifically identified in the plan will be considered “schoolwide funds” subject to the schoolwide flexibility.

Unfortunately, identifying programs is easier said than done. Under Title I, Part A, LEAs are required to allocate funds to eligible schools. Thus, each school receives an allocation to support its school-level costs. Outside of Title I, Part A, however, most federal education programs do not contain a process for allocating funds to individual schools. Rather, SEAs allocate funds to LEAs for LEAs to spend in accordance statutory requirements. While LEAs may choose to allocate, or set-aside, some of its funds to pay allowable school-level costs, many LEAs spend the funds at the LEA level and provide services to schools.

If a schoolwide program school does not receive a distinct allocation, how should it identity the funds to be consolidated? In 2004, ED released a notice on schoolwide programs that clarified consolidation also extends to services, materials, and equipment purchased with federal funds and provided to a schoolwide program school.

Thus, schools should identify the services, materials and equipment they receive from the LEA as part of the schoolwide pool in order to make them part of the schoolwide program. Schools may need assistance from their LEAs to identify which services, materials and equipment were purchased with federal funds and are eligible for consolidation.

2. How do you account for consolidated funds?

The new guidance provides several examples of how an LEA may account for funds in a schoolwide pool.

One option is to charge costs proportionally among the programs that make up the schoolwide pool. In other words, the program funds earmarked for the schoolwide pool may be used for any allowable schoolwide activity. Allowable schoolwide costs are then charged back to the contributing programs on a proportionate basis. In other words, if Title I, Part A contributed ten percent of the funds in the consolidated pool, 10 percent of the expenditures from the pool would be charged back to Title I, Part A.

Another option is to charge costs sequentially. In other words, charge costs to state and local funds first, and then to federal programs until those funds are exhausted. Charging costs to state and local funds first ensures SEAs and LEAs stay in compliance with federal cash management rules.

If consolidated funds remain unexpended at the end of the year, ED recommends that LEAs credit the unspent funds back to the contributing programs on a proportional basis.

3. What are allowable costs and how do schoolwide programs prove that funds were spent on allowable costs?

One of the most important clarifications in the guidance concerns the concept of allowable activities in a schoolwide program. Under section 1114, eligible schoolwide program schools may consolidate their federal, state and local funds to upgrade the “educational program” of the school. A schoolwide program school must identify its educational needs in the schoolwide plan by conducting a comprehensive needs assessment and describing the specific strategies it will use to upgrade the educational program in accordance with section 1114. The new guidance clarifies that federal funds contributed to a schoolwide pool may only be used on the educational activities described in the schoolwide plan. Further, costs charged to federal funds must be consistent with the federal cost principles set out in Office of Management and Budget (OMB) Circular A-87.

Thus, in order to be allowable, a cost paid with federal funds in a schoolwide program must be: (1) related to an educational activity that is included in the schoolwide plan; and (2) consistent with federal cost principles.

Federal funds cannot be spent on operational costs such as building maintenance and repair, landscaping, and custodial services. These costs are per-se non-educational; thus, they are not allowable.

This again highlights the importance of the schoolwide plan. Costs are only allowable to the extent they are linked to the educational needs and strategies identified in the plan. It is important to ensure a schoolwide plan is sufficiently detailed to include the educational costs the school will charge to the schoolwide pool and that the school’s budget is well aligned to the schoolwide plan.

The process of proving that a school has spent federal funds on allowable costs depends on how the school has chosen to consolidate its funds:

• If a school consolidates federal, state and local funds, the school does not need to trace its federal expenditures to allowable schoolwide costs. Once federal funds are consolidated with state and local funds they lose their identity as federal funds; thus, they do not need to be tracked to allowable educational costs. However, the school must demonstrate that, in the aggregate, there are sufficient state and local funds to pay for all of the non-educational costs charged to the schoolwide pool. Because federal funds lose their identity in this situation, any employee working exclusively on schoolwide activities and whose salary is charged to the schoolwide pool is not required to maintain any time and effort records.

This distinction between educational and non-educational costs is an important clarification. Title I, Part A contains a supplement not supplant provision, which generally means that Title I funds must be used only to provide additional services, staff, programs, or materials that could not be provided by the SEA or LEA absent the federal funds. In other words, federal funds normally cannot be used to pay for services, staff, programs, or materials that would otherwise be paid with state or local funds. ED has clarified that this restriction applies in schoolwide program schools, but that to demonstrate compliance an LEA simply must ensure that a schoolwide program school receives all of the state and local funds it would receive if it were not a Title I school.


The new guidance provides an additional nuance to this supplanting analysis. Under the new guidance, an LEA must not only provide a school with all of the state and local funds it is entitled to receive, it must ensure the school receives sufficient state and local funds it would otherwise need to operate the school in the absence of federal funds. Thus, LEAs will need to implement a methodology for identifying operational expenses within a schoolwide program school and ensure there are sufficient state and local funds in the schoolwide pool to pay for those expenses.

• If a school only consolidates its federal funds, and does not include any state or local money in the schoolwide pool, it is required to demonstrate the federal funds were spent on educational activities by tracing all costs charged to the pool to a specific allowable educational activity. Employees working exclusively on schoolwide activities and whose salaries are charged to the schoolwide pool must maintain a semi-annual certification. An employee who works on schoolwide and other activities must maintain a monthly personnel activity report.

• If a school operating a schoolwide program does not consolidate its Title I, Part A funds with any other federal, state or local funds, it is required to demonstrate the Title I funds were spent on educational activities by tracking all costs charged to Title I, Part A to a specific allowable educational activity.

Resource:
Non-Regulatory Guidance: Title I Fiscal Issues (United States Department of Education: Revised February 2008), http://www.ed.gov/programs/titleiparta/fiscalguid.doc.

Author: SLK

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Congress Panels Pass Budget Resolutions

Both the House and Senate Budget Committees passed their respective budget resolutions (BR) yesterday, taking an important step in the Congressional fiscal year 2009 (FY09) appropriations cycle. The Senate committee approved the BR on a 12-10 party-line vote, while the House committee passed its measure by a vote of 22-16. The Senate budget would allow $18 billion above the President’s request for the twelve appropriations bills for FY09, and the House budget would top the Administration’s request by $22 billion.

The House and Senate bills differ over paying for a way to fix the alternative minimum tax (AMT), which, if left unchecked, could cost middle class Americans millions. House Democrats want offsets for the cost of a one-year patch, but the Senate BR assumes there will be no offset. Both the House and Senate budget plans show surpluses in fiscal 2012 and fiscal 2013, but Senate Democrats plan to offer an amendment on the floor next week that would dedicate that surplus to covering the costs of extending tax cuts targeted to the middle class. At the same time, Senate leaders are assuming that the 2001 and 2003 tax cuts will expire in 2010, which the Congressional Budget Office (CBO) estimates would increase government revenue by $683 billion over five years.

The House BR allows for a $7.1 billion increase over the President’s request and about 9% over FY08 for “function 500” spending, which covers the Departments of Labor, Health and Human Services and Education. The Senate BR allows for $5.4 billion over the President’s request and an 8% increase over fiscal year 2008 levels. However, the BR is a non-binding resolution that sets spending caps for appropriators. As such, the levels in the BR do not necessarily reflect what will appear in final appropriations bills. If last year’s budget battle is any indication, the caps may become irrelevant, depending on how Congress decides to approach White House concerns.

While the Senate budget resolution does not include reconciliation instructions, the House budget proposal would include the AMT patch in reconciliation. The House measure also includes instructions for the Ways and Means Committee to produce a bill that would reduce mandatory spending by $750 million over six years, which could be used to move pending Medicare legislation. Sen. Judd Gregg (R-NH), the ranking member of the Senate Budget Committee, failed to add an amendment in the Senate that would require a reconciliation package that would produce net savings equal to 0.5% of total mandatory spending in the budget, or about $30 billion over five years.

The House is scheduled to debate the BR on the floor next week. The Senate may also bring its bill to the floor, depending on the schedule set by Majority Leader Harry Reid (D-NV). Congress begins its Spring recess next weekend, giving both chambers one week to pass their respective bills and negotiate a joint BR, giving appropriators final spending caps for the remainder of the session. Yet, since Congress usually aims to have a finished BR by mid-April, Democrats may take advantage of the recess to ensure full party support before bringing a final joint BR to each chamber for a final vote.

Resources:
David Clarke and Liriel Higa, “Tax Cuts Front and Center in Senate Budget Committee’s Debate,” CQ Today, March 6, 2008.
Author: SAS

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School Nutrition Advocates Push for National Standards

As negotiations on the Farm Bill continue, school nutrition advocates are preparing another push for national standards on foods sold in public schools. After Senate Agriculture, Nutrition and Forestry Committee Chairman Tom Harkin (D-IA) failed to get a national standards amendment on the Farm Bill, advocates focused efforts on expanding the Fresh Fruit and Vegetable Program (FFVP). Now that the bill is stalled in pre-conference negotiations, the School Nutrition Association (SNA) is planning a new campaign for national standards through independent legislation.

Next week, SNA is holding its annual Legislative Action Conference on Capitol Hill. In advance of this conference SNA released a statement that it will urge Congress to require science-based, yet practical, uniform national school nutrition standards to govern the sale of all foods and beverages available during the school day. SNA’s priorities include:

• Giving the Secretary of Agriculture the authority to regulate and enforce the sale of food and beverages outside of the cafeteria.
• Requiring all a la carte and competitive food sales to be consistent with the Dietary Guidelines, as is required for school meals.
• Requiring national uniformity for the school meal pattern throughout the country. Children in all states and local districts need the same nutrients to grow and to be healthy. The current lack of uniformity is increasing the cost of the programs.

As the Farm Bill made its way through the Senate last fall, Sen. Harkin attempted to attach an amendment that would have put similar standards in place. However, due to the overly-contentious debate over the amount of amendments that Majority Leader Harry Reid (D-NV) would allow, Harkin chose to forgo efforts to attach his amendment, allowing other Senators to advance their own priorities. The amendment’s language was based on S. 771, Child Nutrition Promotion and School Lunch Protection Act, which Harkin introduced last year. Whether or not that legislation will move forward before the end of the 110th Congress remains to be seen.

Meanwhile, Congressional leaders met with the White House this week to negotiate overall spending for the Farm Bill. Earlier this month, House leaders proposed $6 billion over baseline, and received the President’s support, so long as offsets did not include raising taxes. President Bush continues to oppose any tax increases, preferring to find offsets in the form of spending cuts. The House proposal did not receive a warm welcome among Senators, but the two sides negotiated an agreement for $10 billion above baseline. The Administration is refusing to sign onto the proposal until all of the offsets are out on the table. Lawmakers only have two weeks before the current Farm Bill expires.

Resources:
School Nutrition Association Press Release:
http://www.schoolnutrition.org/Index.aspx?id=2748.
Carol MacDonald, “Nutritionists Want Level Playing Field for School Foods,” Education Daily, February 27, 2008.
Author: SAS

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Governors Pushing For Federal Aid

Although education did not receive much attention at this week’s National Governor’s Association (NGA) meeting in Washington, fiscal problems were a topic of great interest. Governors cited different reasons for their state’s financial troubles, but all of those in attendance at the meeting were looking to the federal government to provide support. Many Governors are already taking steps to ensure their state either survives or sidesteps tight budget crunches over the next few years, but many Governors are still hoping Congress and the President will provide a helping hand. Their pleas may fall on deaf ears.

Many of the Governors discussed the benefits of passing a second stimulus package that includes money for transportation projects and other state funding needs. Currently, as many as 18 states have deficits, totaling $14 billion in the current budget cycle, and 20 states forecast spending shortfalls for 2009 totaling $34 billion, when combined. Governors are also looking to Congress for a one-year reprieve from new Medicaid rules that the Bush administration is attempting to put in place. State officials and health providers vigorously oppose the changes, which they say will shift $13 billion in costs over five years to states at a time their own budgets are facing deficits because of the economic downturn. (For more on the Medicaid rules, see the article above).

While Congress may be ready and willing to acquiesce to the states’ requests, they may not be able. In light of the federal budget deficit, and the need for continued war funding, the President is unlikely to give-up the Medicaid cuts easily, cuts he claims will provide billions in savings for the federal government. The President is also unlikely to support another $20 billion package until the current one has a chance to demonstrate success. If the President is unwilling to yield on his tight fiscal constraints, then states may have to work out their own financial difficulties without federal aid.

Resources:
Eric Kelderman and Daniel C. Vock, “Govs Press for More Money on Real ID, Medicaid,” Stateline, February 25, 2008.
Andrew Welsh-Huggins, “Governors Battle with Tight Budgets,” Associated Press, February 25, 2008.
Author: SAS

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CMS Moratorium Mêlées : Deux

On Tuesday, the Senate passed S. 1200, the Indian Health Care Improvement Act Amendments of 2007. The comprehensive bill seeks to modernize the Indian health care delivery system and it includes a critical amendment by Sen. Barbara Mikulski (D-MD) to prevent yet another proposed rule from the Centers for Medicare and Medicaid Services (CMS) from going into effect.

Mikulski’s amendment would prevent CMS from implementing rule CMS-2237-IFC “Medicaid Program; Optional State Plan Case Management Services.” The rule, issued on December 4, 2007, would restrict CMS payments for case management services offered to children with disabilities under their Individualized Education Plan (IEP) as required by the Individual with Disabilities Education Act (IDEA), and it would disallow the provision of case management when it is part of a child’s plan under Section 504 of the Rehabilitation Act. (See 72 Fed. Reg. 68077-68093) (Dec. 4, 2007). This rule is scheduled to take effect on March 3, but Mikulski’s amendment would delay implementation until April 1, 2009.

This is the second critical moratorium on CMS rules that we are tracking. Congress passed the first in December, S. 2499, the Medicare, Medicaid, and SCHIP Extension Act of 2007. The bill, now Public Law No: 110-173, contains a moratorium on CMS’ rules to restrict Medicaid reimbursement payments to schools relating to coverage for rehabilitation services or school-based administration and school-based transportation. The moratorium runs until June 30, 2008 and there is heavy pressure on Congress to extend this moratorium into 2009 and beyond.

Despite the political opposition to CMS’ rules, CMS is dedicated to reducing its payments to schools and Congress is determined to prevent CMS action. To be sure, these moratorium mêlées will be important to Members of Congress this year. We will continue to monitor and analyze the events as they develop.

Resource:
72 Fed. Reg. 68077-68093) (Dec. 4, 2007), http://www.access.gpo.gov/su_docs/fedreg/a071204c.html.
Judith Solomon, “New Medicaid Rules Would Limit Care for Children in Foster Care and People with Disabilities in Ways Congress Did Not Intend,” Center on Budget and Policy Priorities, Revised February 8 2008, http://www.cbpp.org/12-21-07health.htm
Author: DAD

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Obey: Compromise or Else

On Tuesday, the House Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies hosted a hearing on the President’s fiscal year 2009 (FY09) proposed budget for the U.S. Department of Education (ED). Committee Chairman David Obey (D-WI) brought Secretary of Education Margaret Spellings before the Committee, and, like the previous two years, the event was not pleasant for the Secretary.

Secretary Spellings defended the President’s flat funding for ED by stating, “we have limited resources” and the federal responsibility is to “ensure that taxpayer dollars are allocated in the most effective and efficient ways.” This meant cutting many “small or ineffective” programs while funding those programs the Administration believes are most effective. The President is requesting $59.2 billion in discretionary appropriations for ED, the same amount that Congress appropriated in 2008 and that does not account for inflation. The request proposes to eliminate or consolidate 47 ED programs, including zero funding for Career and Technical Education State Grants, Tech Prep Education State Grants, Even Start, Education Technology State Grants, and State Grants for Innovative Programs.

Members of the House Committee on Appropriations did not agree with the Administration’s request. Representative Barbara Lee (D - CA) and Congresswoman Lucille Roybal-Allard (D-CA) spent considerable time asking about many of the programs that were cut from the budget, noting that many of them affected students who were poor and minorities. Representative Dave Weldon (R-FL) made the point that the underfunding of Career and Technical Education has been a regrettable theme of this Administration, a point supported by Democrats and Republicans alike, including Congressman Tim Ryan (D-OH), Mike Simpson (R-ID), John Peterson (R-PA) and Tom Udall (D-NM).

Chairman Obey was less diplomatic and in no mood to negotiate over the proposed budget. He told Spellings to tell the President that either he negotiate with Congress to increase funding or Congress will wait until 2009, when he is out of the office, to resolve the matter. “I am not about to waste eight months of this Committee’s time,” Obey told Spellings, clearly still upset over last year’s budget standoff with the President. The question is whether the President “will act like an adult,” fumed Obey.

Resources:
http://appropriations.house.gov/Subcommittees/sub_lhhse.shtml
“U.S. Secretary of Education Margaret Spellings Testifies Before House Appropriations Subcommittee,” United States Department of Education, Press Room, February 26, 2008, http://www.ed.gov/news/pressreleases/2008/02/02262008.html
Author: DAD

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Farm Bill Deadline Looming (2/22/2008)

Perhaps the most pressing matter in Congress when it returns will be to pass the Farm Bill before it expires on March 15th, at which point the old 1949 agriculture law will take effect. Despite the fact that House and Senate leaders have been working for weeks on reaching an agreement, Agriculture Secretary Ed Schafer remains skeptical that they can reach a deal that the White House will accept before the deadline. In support of his presumption, House and Senate leaders continue to disagree on the overall spending levels for the bill, and have yet to meet on the particular provisions of many of the programs in the bill. Even if an agreement on overall spending is reached, there are a lot of details that still need to be ironed out before the bill is ready for a final vote and the President’s signature.

After receiving veto threats from the White House, House leaders proposed a Farm Bill that only goes $6 billion above baseline spending, a proposal that they claim the President supports. However, Sen. Tom Harkin (D-IA) is not satisfied with such a small increase for the nation’s largest agricultural bill. Harkin made a counterproposal that authorizes spending at more than $12 billion above the baseline. The Administration has stated its opposition to Harkin’s proposal, which does not give the Senate Agriculture Committee Chairman much bargaining power with his House counterparts. However, to get a final bill to the President, the Senate will have to agree to the proposed spending levels, and Sen. Harkin is very influential among both parties in the Senate.

While the House and Senate leaders debate the overall spending, there has been very little talk about the programmatic details of the various titles of the bill. Congress must still choose which expansion of the Fresh Fruit and Vegetable Program it will choose to present to the President. A majority of advocacy groups support the Senate language, which will expand the program into all 50 states, authorizing $225 million for the next fiscal year. Under this proposal, all 50 states would receive 1% of the annual appropriation, with the remaining 50% doled out on a population basis.

The Senate language does not include any set aside for administrative use, though the House’s expansion calls for a 5% set aside. The issues will not be resolved until the leaders can come to terms on funding for the bill. They have just two weeks before the deadline arrives, at which point the law will revert back to the 1949 legislation, or Congress will have to pass a temporary extension of the current Farm Bill.

Resources:
Geof Koss, “Agriculture Secretary Sees Closing Window for Farm Bill,” Congress Now, February 21, 2008.
Author: SAS

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WIA Remains on the Backburner (2/22/2008)

One item that seems to have fallen off of Congress’s radar is reauthorizing the Workforce Investment Act (WIA). When Congress returns next week, the House Education & Labor Committee and the Senate Health, Education, Labor and Pensions (HELP) Committee will be looking to finish work on reauthorizing the Higher Education Act (HEA). HELP Committee Chairman Edward Kennedy (D-MA) also listed No Child Left Behind as one of his top priorities for 2008. Meanwhile the WIA, which was scheduled for reauthorization in 2003, remains untouched this year.

After the 109th Congress failed to reauthorize the law, the 110th began preliminary measures towards a final reauthorization, but did not follow up with subsequent efforts. The White House offered its own WIA proposal last year. Under that proposal, funds appropriated for the WIA Adult, Dislocated Worker and Youth Programs and the Employment Service would be consolidated and allocated to states as a single funding stream for Career Advancement Accounts (CAA) and employment services for job seekers and employers. The proposal seeks to increase education and training opportunities for American workers, provide greater flexibility to states and local areas, and strengthen the One-Stop Career Center system.

This proposal is mirrored in the President’s fiscal year 2009 budget proposal, which has been largely dismissed by the majority in Congress. The House held two hearings last summer regarding the WIA, but aside from a bill proposed by the Republican minority in the House, Congress did not produce any meaningful legislation. This year is not looking any more promising. Committee staff in both the House and the Senate admitted that the WIA is not currently a top priority for the 110th. Unless those priorities are shifted, the WIA is not likely to be reauthorized this year.

Author: SAS

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HEA Faces Tough Conference (2/22/2008)

When Congress returns from the week long recess on Monday, one item of unfinished business that remains on its to-do list is reauthorizing the Higher Education Act (HEA). Both chambers passed their own versions of the HEA, which is currently operating under an extension through March 31st. Due to some contentious issues between the two bills, pre-conference negotiations continue to delay the release of a final conference report. The Senate passed S. 1642 on July 24th, while the House just recently passed H.R. 4317on February 7th. Although both bills passed by overwhelming majorities (354-58 in the House, 95-0 in the Senate), the two bills still need to find common ground before a final conference report is released.

S. 1642 would:

• Increase the amount of information that schools and lenders must provide to students, including up-front disclosure of loan rates and terms and data on total school costs, and would ban lenders from giving schools financial aid funds or any other perks to get on a preferred lender list;
• Direct the U.S. Secretary of Education to assess costs that drive tuition increases and examine ways to contain costs and track pricing trends, alerting schools that the government will monitor tuition increases and consider ways to curb them; and
• Require colleges and universities to draft codes of conduct governing relationships with lenders, shorten the application form for federal student aid, and authorize a pilot program to allow students to learn the total aid they can expect to receive up to two years in advance.

H.R. 4317 would:

• Give the U.S. Education Department (ED) significantly more authority to regulate private student loans, as part of a broad set of provisions — prompted by last year’s investigations into illegal inducements given to colleges by lenders — aimed at cracking down on the behavior of lenders and college officials in making loans to students;
• Bar ED from issuing regulations governing higher education accreditation, designed to ensure that colleges are measuring student learning outcomes;
• Set a ceiling on the maximum Pell Grant of $9,000, and allow students to receive Pell Grant funds year-round, instead of just during the traditional academic year; and
• Require States to maintain their financial support of higher education and allow ED to withhold some funds to States that cut their college appropriations — an idea endorsed by some college officials but strongly opposed by many state legislators.

Conferees have yet to meet on the two bills, but negotiations between key staff members and members of Congress continue to take place behind closed doors. Members of Congress seemed intent on finishing the HEA this year, something they have been unable to do since 1998. While appropriations will likely be the top priority in the next few months, Congress may move quickly to get a final bill to the President before the March 31st deadline.

Resources:
Stephen Langel, “Senate Unanimously Approves Higher Ed Reauthorization,” Congress Now, July 24, 2007.
Stephen Langel, “House Easily Approves Higher Ed Reauthorization; Conference Up Next,” Congress Now, February 7, 2008.
Author: SAS

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NCLB Still Alive in the Senate (2/22/2008)

The clock continues to run on the re-authorization of No Child Left Behind (NCLB). When the Senate returns to work next week, it will have about three weeks, until the next recess on March 17, to introduce language on the critical pistons of the law: Title I, Part A and Title II, Part A. That is not a hard deadline, but a self-imposed target set by the staff in the Senate education committee. Last year, the Senate released many parts of its bill for public discussion, but the committee did not release those critical sections due to their complexity and, more important, the rancorous political atmosphere that followed the release of the House Discussion Draft. Most expect the Senate language on accountability to be considerably more flexible than was the House draft.

According to Roberto Rodriguez, Education Adviser to the Chairman of the Senate Committee on Health Education Labor and Pensions (HELP), Senator Edward M. Kennedy (D-MA), the Committee will try to craft language that grants local educational agencies and state educational agencies more authority to use other indicators of academic success beyond the current status model and growth models. Likewise, Rodriguez reports that the subsequent interventions of section 1116 will also incorporate greater differentiation. While the details are currently scarce, the full picture of the reauthorization debate will be more clear in the coming weeks.

Author: DAD

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Appropriations is Top Priority this Spring (2/22/2008)

Congress is set to begin work on fiscal year 2009 (FY09) appropriations as soon as it returns to Washington next week. Both the Appropriations and Budget committees are preparing to flesh out their proposals for the next fiscal year’s funding levels. A number of the Administration’s Cabinet Members have already testified before Congress regarding White House budget proposals, and House Appropriations Chairman David Obey (D-WI) is planning another hearing for next Tuesday.

Rep. Obey, also the chairman of the House Appropriations Subcommittee on Labor-HHS-Education, is having Secretary Margaret Spellings testify before his subcommittee regarding the President’s budget requests for education. One issue that is sure to get the subcommittee’s attention is the President’s request to return Reading First funding back to the FY2007 levels. Rep. Obey cut the program considerably for fiscal year 2008, citing mismanagement and conflicts of interest with those responsible for administering the program. Spellings will also have to justify the 47 education programs that are targeted for elimination, a move that has not been popular with either party in Congress.

Meanwhile, the House and Senate Budget committees are set to begin their work on drafting the FY09 budget resolution (BR), which will set the spending caps under which appropriators are directed to operate when deciding funding for the various programs. Senate Budget Committee Chairman Kent Conrad (D-ND) and House Budget Chairman John Spratt (D-SC) have already stated that this year’s resolution will look much like last year’s BR, ignoring the President’s requested levels. Despite this apparent defiance, Congress is not in any better position than it was last year, when the President forced the majority to bring its total level of spending closer to his lower, requested levels.

The President continues to have enough support in the House to sustain a veto, giving him an edge over the Democratic majority, especially when he does not have to worry about reelection, unlike members of Congress. Leaders in Congress may not want to risk the backlash from failing to pass appropriations bill before the elections in November. In the past, the blame for government shutdowns has fallen squarely on Congress’s shoulders.

Author: SAS

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New Teacher Policy Program at ED (2/15/2008)

On Monday, the United States Department of Education (ED) announced a new program, the Teaching Ambassador Fellowship. The program is designed to improve education programs and policies by strengthening the connection to classroom practices, recognizing and retaining motivated and innovative public school teachers, and providing them the opportunity to expand their leadership roles outside of the classroom. The program will have two tiers of participation: Classroom Fellows and Washington Fellows.

Classroom Fellows will serve their regular teaching contracts within their districts, and will be paid to perform additional Fellowship duties for ED. Washington Fellows will serve as full-time federal employees in Washington, D.C. from summer 2008 through June 2009, placed in appropriate positions within the Department of Education to work on education program development and implementation.

Highly Qualified K-12 teachers, as defined under No Child Left Behind, of all subjects from public schools who have spent at least three years in the classroom are eligible to apply. Potential candidates for the Teaching Ambassador Fellowship should visit http://www.ed.gov/programs/teacherfellowship/applicant.html for further information. Up to 20 Classroom Fellows and up to 5 Washington Fellows will be named by summer 2008.

Resource:
“Teaching Ambassador Fellowship,” United States Department of Education, http://www.ed.gov/programs/teacherfellowship/applicant.html.
Author: DAD

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Negotiations Moving Forward on Farm Bill (2/15/2008)

Those responsible for the Farm Bill may be moving closer to final passage of the long awaited legislation. Although no formal conference has taken place, House and Senate leaders are working on producing a bill that can clear both houses of Congress as well as the White House. Both House and Senate leaders have created final proposals to negotiate over, hoping they can produce a final conference report before March 15, when the current Farm Bill expires.

Earlier this week, House Agriculture Committee Chairman Collin C. Peterson (D-MN) and ranking member Robert W. Goodlatte (R-VA) released a new proposal that would come in at $6 billion above baseline spending for the five-year legislation, which authorizes federal agriculture programs. Peterson claims the White House will support the spending levels in his proposal. Sen. Tom Harkin (D-IA), on the other hand, has countered with his own proposal. Harkin’s measure mirror’s Peterson’s, but includes funding levels that are about $12.5 billion above baseline spending.

All parties involved want additional funding, but any such legislation will face a veto threat from the White House. Despite the significant behind-the-scenes negotiating that is taking place, there is little talk regarding the nutrition provisions of either proposal. A majority of school nutrition advocates support the Senate’s expansion of the Fresh Fruit and Vegetable program. Unfortunately, the talks are currently focused on payments to farmers, one of the most controversial sections of the bill.

Sen. Harkin and his staff plan to work through the weekend, hopefully coming up with a compromise with the House by Sunday. If he is successful, a conference report could make it through Congress shortly after they return from the week-long President’s Day recess. This may allow Congress to get a bill to the President before the March 15 deadline.

Resources:
Geof Koss, “Harkin Demands More Farm Bill Spending Than House-Backed Level,” Congress Now, February 14, 2008.
Catharine Richert, “Lawmakers Meet to Move Revamped Farm Legislation Closer to Fruition,” CQ Today, February 14, 2008.
Author: SAS

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President Signs Stimulus Package (2/15/2008)

President Bush signed H.R. 5140, a $168 billion economic stimulus package, on Wednesday. The package is intended to help stimulate the economy, which many economists believe is heading into a recession, by putting more money back in the hands of consumers. Regardless of the legislation’s success, H.R. 5140 will have further implications on Capitol Hill as Congress heads into the fiscal year 2009 (FY09) budget cycle.

Marquee provisions in the bill include rebate checks to workers earning at least $3,000, whether or not they pay income taxes. The size of rebate payments are based on taxes paid last year, but will be shown as a credit for the 2008 tax season. Anyone without a Social Security number will not be able to receive one. While lawmakers and economists disagree on the probable benefits of the package, all interested parties agree that the bill’s quick package may not bode well for FY09 appropriations.

President Bush and Congressional Republicans signed on early to support the stimulus package, showing a very rare period of partisan cooperation. However, that period will end, specifically regarding federal funding, as soon as the House and Senate Budget Committees meet next month to draft the FY09 budget resolution. The President will remain staunch on his requested funding levels.

For fiscal year 2008 (FY08), the President vetoed the Labor-HHS-Education bill because it came in at nearly $12 billion over his request. He levied similar threats to all bills that year that he felt were too far above his request. The Democratic majority in the House was not strong enough to override his veto. The situation for FY09 is not any different.

The President will likely remain unmovable on his funding levels once again, and he still has enough Republican support in the House to sustain a veto. The fact that the President and his supporters in Congress signed off on $168 billion over two years for the stimulus package means that the Administration will be even more stringent on spending for the remainder of the year.

Resources:
Jay Heflin, “President Signs Stimulus Package Into Law,” Congress Now, February 13, 2008.
Author: SAS

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Congress Ready to Begin Budget Work (2/15/2008)

President Bush began the fiscal year 2009 (FY09) budget cycle last week when he released his budget request. The wheels are beginning to turn in Congress, and the House and Senate Budget Committee plan to begin work shortly after they return from the week-long President’s Day recess. Despite conceding a lot of ground to the President’s request last year, the Democratic majority in Congress is claiming that it will begin the same fight it lost last year.

Senate Budget Committee Chairman Ken Conrad (D-ND) is promising to turn a budget resolution (BR) out of committee that closely resembles last year’s resolution. Sen. Conrad plans to mark up the BR on March 5th and 6th. Although the House has not scheduled a mark up, House Budget Committee Chairman John Spratt (D-SC) intends to begin work around that same time. Meanwhile, Democrats continue to lambast the President’s budget request, claiming it underfunds too many important domestic priorities.

Sen. Debbie Stabenow (D-MI) is criticizing cuts to the children’s health insurance program and various higher education grants, including elimination of the Perkins loan program, which provides money for low-income students to attend college. She is estimating that the President’s budget would cut about $900 million from higher education programs. Rep. Spratt also joined in by referring to Bush’s budget cuts as “draconian,” especially regarding cuts to entitlement programs. However, U.S. Treasury Secretary Henry Paulson argued that entitlement reform would help raise revenue by nearly $2 trillion a year.

Once both chambers have passed their own BRs, the bills will go to conference and they will put together a joint BR. Once that is approved by both the House and the Senate, it will set caps on discretionary spending, meant to guide Congressional appropriators, who begin work shortly after a joint BR is passed. Since the BR is only used for Congressional purposes, it does not require the President’s signature. Spratt and Conrad hope to have the BR ready in early April, allowing appropriators to begin work shortly after the Easter recess.

Resources:
Vicki Needham, “Conrad: Fiscal 2009 Budget Will Resemble 2008,” Congress Now, February 12, 2008.
Jay Heflin, “Spratt Questions Wisdom of Bush Budget's Parameters,” Congress Now, February 13, 2008.
Author: SAS

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Facility Financing Comes to the Forefront (2/15/2008)

On Wednesday, the House Committee on Education and Labor held a two-panel hearing on school facility financing, entitled “Modern Public School Facilities: Investing in the Future.” The first panel comprised of Members of Congress who have introduced school facility legislation or are involved with the issue. The second comprised of
school facility practitioners and policy experts.

In panel one, eight members of Congress testified on either the importance of the federal role in school facility matters or the inappropriateness of federal involvement. Predictably, the matter fell along party lines. Indicative of those in favor of an expanded federal role, Representative Bob Etheridge (D-NC), a former Superintendent of North Carolina’s public schools, discussed his bill, H.R. 2470, the America’s Better Classrooms Act.

He made the point that inadequate school facilities are not a function of improper management or lackluster efforts. The problem stems from an explosive demand on facilities that outpaces the efforts to keep with the demands. “School officials are striving to provide first class educational opportunities with infrastructure that has not kept up with the times,” said Etheridge. “Simply put, our schools are busting at the seams.”

The Republican testimonies reflected concerns over the fiscal implications of further expansion of the federal role in education. The opportunity cost concerned Representative Mike Castle (R-DE) most. He observed that the federal government has not met many of its current funding obligations, such as fully funding No Child Left Behind, the Individuals with Disabilities Act, and meeting various other requirements imposed by the Environmental Protection Agency. Taking on yet another commitment may not be feasible, he testified. But the concerns over inflated construction costs overshadowed the polite opportunity costs argument.

Republicans spent significant time on the impact of the Davis-Bacon law upon construction costs. The Davis-Bacon mandate applies to any bill that receives federal dollars for construction or renovation. It requires that all laborers and mechanics employed by contractors or subcontractors on all construction and minor remodeling projects to be paid local prevailing wages as determined by the Secretary of Labor. The calculation of the prevailing wage, however, is a matter of debate.

As explained by Representative Steve King (R-IA), the law artificially increases labor costs up to 22% and overall construction costs up to 9%. Because of this increased cost, the Republicans panelists made it clear that they would reject any legislation that would force the Davis-Bacon mandate on school construction and re-modeling. The heated discussion on this debate made it clear that the future of any facility finance bill in Congress this year will turn on its interface with the Davis-Bacon requirements.

The second panel provided the Committee with a practitioner’s view of the federal role in school facility financing. Six panelists informed the Committee about their work in the field and how the federal government has supported their work.
For example, Kathleen Moore, the Director of the School Facilities Planning Division of the California Department of Education, discussed the impact of facilities on student achievement and teacher retention, California’s school facilities needs and successful federal facility programs and the need for continued and expanded federal assistance.

Notably, Moore discussed two federal programs that have helped California: the Qualified Zone Academy Bond (QZAB) program and the Federal Renovation Program. Both, she testified, are models for federal involvement. The QZAB program is a strong model for providing tax credits that allow LEAs the benefit of interest free financing on bonds and the Federal Renovation Program is a good model of a grant that targets urgent repair and renovation.

“The physical condition of school facilities impact student achievement and experience as well as teacher retention and community vitality,” testified Moore. “A quality school facility is but one component necessary for successful learning. Alone it is no silver bullet, but together with rigorous standards, qualified teachers and system accountability, it can positively impact educational outcomes.”

The hearing made two things clear. First, the current role in federal facility financing has been critical for many schools and districts. Second, the expansion of the federal role is possible in this session of Congress, but they must resolve the partisan split if any new bills hope to move forward before the elections in November.

Resources:
School facility bills before Congress.
H.R. 3021, the 21st Century High-Performing Public School Facilities Act, introduced by Representative Ben Chandler (D-KY);
H.R. 3902, Public School Repair and Renovation Act, introduced by Congressman David Loebsack’s (D-IA);
H.R. 3197, the School Building Enhancement Act, authored by Representative Rush Holt (D-NJ);
H.R. 2470, the American’s Better Classrooms Act (ABC), sponsored by House Ways and Means Committee Chair Charlie Rangel (D-NY).
Author: DAD

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House Committee Personnel News (2/8/2008)

This week, U.S. House Education and Labor Committee Ranking Republican Howard ”Buck" McKeon (R-CA) announced the departure of Vic Klatt, the Committee’s Republican Staff Director. McKeon named Sally Stroup as Klatt's successor. Vic has been a long time friend of the Firm and we wish him the best moving on. Sally is also a friend of the firm and so we congratulate her on the move as well. We look forward to working with her and her staff in the coming years.

Resource:
“McKeon Announces Education & Labor Staff Changes,” Committee on Education and Labor, Republicans, February 5, 2008, http://republicans.edlabor.house.gov/PRArticle.aspx?NewsID=409.
Author: DAD

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President is Calling for WIA Changes (2/8/2008)

President Bush released his fiscal year 2009 (FY09) budget proposal on Monday, February 4th. His $3.1 trillion budget calls for a number of program eliminations and cuts, though some specific programs would receive slight increases. Among his proposals, the President is calling for considerable changes to the funding mechanisms under the Workforce Investment Act (WIA). As a practical matter, the Administration understands many of its proposed changes will not be adopted on Capitol Hill, so President Bush is proposing an alternative plan to fund WIA programs under the current law.

The Administration’s primary proposal for WIA funding includes collapsing the funding from various programs into one large funding stream. Under this plan, funding for adult, dislocated worker and youth employment and training activities is eliminated. That funding is then funneled into Career Advancement Accounts (CAAs).

CAAs are “self directed” accounts of up to $6,000 over two years that would be available to adults and out-of-school youth entering or re-entering the workforce or transitioning between jobs, or incumbent workers in need of new skills to remain employed or to move up the career ladder. This would also replace the current system of separate training programs serving a single state grant for the provision of employment and training services.

Experience has taught the Administration that Congress does not always fall in line when it comes to the President’s budget request. Under the assumption that they lack support in Congress, the White House is also proposing alternative funding levels for the eliminated programs. If Congress decides to continue funding the separate programs, the Administration’s desired funding levels are:

• $712 million for Adult Employment and Training Activities;
• $1.2 billion for Dislocated Workers Employment and Training Activities; and
• $840.5 million for Youth Activities.

Most expect Congress to continue the separate funding streams, though the final funding numbers are still likely to reflect the President’s desired funding levels if they reject the CAA proposal.

Author: SAS

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