Senate Passes Higher Ed Reconciliation Bill

Just before 1:00 AM on Friday, July 20, the Senate passed H.R. 2669, the College Cost Reduction Act, by a vote of 78-18. The bill, which cuts more than $18 billion in subsidies to student lenders, passed with no substantial amendments. The House passed its companion bill last week, with a slightly larger cut, so the bill now heads to conference. The main hurdle in the Senate centered on an amendment that would reduce the cuts by about $3 billion.

Sens. Richard M. Burr (R-NC) and Ben Nelson (D-NE) offered an amendment that would wipe out $2.4 billion of the lender subsidy cuts proposed in H.R. 2669, most of which would be redirected to aid student borrowers. The Senators argued, and some opponents conceded, that Congress could not be certain that the subsidy cuts would not force certain lenders out of the industry. Rather than take that chance, the two Senators felt the more prudent course of action would be to scale back the proposed cuts.

However, Sen. Edward Kennedy (D-MA), the bill’s sponsor, claimed the amendment would cut the $800-per-person Pell grant increase down to a $300 increase or less. The amendment would call for the difference to be made up using appropriations, but Sen. Kennedy pointed out that this is not a reliable approach because there is no requirement that these funds be provided. The amendment was defeated 61-36.

The bill now goes to conference, where reconciliation between the major differences will prove challenging for negotiators. The biggest difference is in the House bill, passed last week, which halves the interest rates on subsidized student loans, from 6.8% to 3.4%. This rate cut is part of House Democrats’ “Six for ’06” agenda that House Education and Labor Chairman George Miller (D-CA) seems unwilling to sacrifice.

While Sen. Kennedy is likely to be equally stubborn on Senate provisions, such as auctioning the right to offer federally backed PLUS loans to parents, the Senate measure has factors working in its favor. The President has already offered a veto threat on the House bill, while only expressing “serious concern” with the Senate bill. The fact that the White House has not threatened the Senate version, and in fact has offered to negotiate, gives Senate conferees the upper hand in negotiating with the House.

Resources:
Doug Lederman, "Senators Side With Students," Inside Higher Ed, July 20, 2007.
Libby George, “Private Lender Subsidy Cuts Hold Up,” CQ Today, July 20, 2007.
Stephen Langel, “Education Bill Overwhelmingly Passes Senate,” Congress Now, July 20, 2007.
Author: SAS

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Competitiveness Bill Finally Ready For Conference

On Thursday, July 19, the Senate passed H.R. 2272, the 21st Century Competitiveness Act, by a voice vote after inserting the text of S. 761, the America Creating Opportunities to Meaningfully Promote Excellence in Technology, Education and Science (COMPETES) Act. The Senate passed S. 761 in April, a month before the House chose to combine various math and science proposals into one large omnibus bill (H.R. 2272). The bills will now head to conference, the first major step towards improving science, technology, engineering and mathematics (STEM) education.

Following the President’s announcement of his American Competitiveness Initiative in 2005, Congress began working on various ways to keep the U.S. competitive in the global market, with a specific focus on educating the next generation of research and technology leaders. H.R. 2272 is the first serious step Congress is taking towards achieving that goal. The Senate version would double the National Science Foundation’s (NSF) budget, from $5.6 billion in fiscal 2006 to $11.2 billion by fiscal 2011. The NSF contributes about 20% of all federal money awarded for basic research at U.S. universities. The House version of the bill reauthorizes the NSF at a total of $21 billion through fiscal 2010. It would also reauthorize the National Institute of Standards and Technology for the first time in more than a decade at a total of $2.5 billion through fiscal 2010.

At this point, no date is set for a conference between the two versions of the bill. The White House, as with the appropriations, has expressed concerns over the funding levels (seems to be a reoccurring theme) authorized in both versions. Unlike various other spending bills this year, the President has yet to threaten a veto, but he has made it clear that negotiations between the White House and Congress are necessary if the bill is to get past his desk untouched.

Resources:
Kathryn A. Wolfe, “Conference Sought on Bills to Bolster Competitiveness,” CQ Today, July 19, 2007.
Author: SAS

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NCLB Reauthorization Update

The momentum behind the reauthorization of No Child Left Behind (NCLB) slowed this week. With the August recess looming on the calendar, staffs in the House Committee on Education and Labor have been working overtime to complete a comprehensive reauthorization bill before the break. Yet, the adequate yearly progress (AYP) negotiations have bogged the process down and, on Wednesday, the ranking member of the House Education Committee, Howard “Buck” McKeon (R-CA) stated that the legislation will not be ready until fall and that he will not support it unless it has the votes of the majority of Republican members. The education pundits who predicted a post-Presidential election 2009 reauthorization were, suddenly, all smiles.

Yet, that has not stopped Members of Congress from introducing important bills that will shape the final law. Last week, Senators Judd Gregg (R-NH) and Richard Burr (R-NC) introduced the first comprehensive bill for the reauthorization of NCLB, S. 1775, the “No Child Left Behind Act of 2007.” This week, Senators Joe Lieberman, (I/D-CT) and Mary Landrieu (D-LA) announced plans (not an actual bill yet) to introduce their comprehensive ESEA reauthorization bill, the "All Students Can Achieve Act."

According to a release by the Aspen Institute’s Commission on No Child Left Behind, who worked closely with Sen. Lieberman’s staff on the project, the soon to come Lieberman/Landrieu bill will advance many of the Commission’s priorities. The pending bill:

• Requires and funds the development of data systems to track individual student performance over time and to link that performance to teachers, programs and services. States with adequate data systems and plans for measuring effectiveness would be able to use growth models for determining AYP..
• Requires the equitable distribution of non-Federal funds within school districts; provides incentives for school professionals, through teamwork in the poorest schools, to make the greatest improvements in student performance; provides funds for out-of-district transfers to public schools for students without viable alternatives; provides equitable funding and flexibility under the Charter School Program.
• Authorizes the National Assessment Governing Board to develop voluntary American learning standards and assessments in reading, math and science while ensuring that the standards and assessments are aligned with life, college and workplace readiness skills. States may choose to adopt these standards and assessments.
• Distinguishes those schools needing intensive interventions, i.e. schools with a majority of students missing AYP, from schools missing AYP for less than half the student population.
• Eliminates the restructuring option that permitted “any other major restructuring of the school's governance” while a limit is provided on the percentage of schools required to implement comprehensive restructuring within a single school district in a given year.
• Would allow states and districts successful at meeting AYP and at measuring teacher effectiveness to have greater flexibility in transferring funds to the most critical areas they have within No Child Left Behind.

The new bills are critical because they lay the framework for the coming reauthorization debates. Also, as all policy watchers knew heading into this year, the Commission’s focus on teacher effectiveness will be a critical part of the coming debates, and now the Commission has Senators Lieberman and Landrieu in their camp. While Representative McKeon may have slow-tracked the process, this should have the effect of fast tracking everyone’s efforts shape the early tone of the debates.

Resources:
Commission’s Recommendations for Reauthorization Included in Senate ‘All Students Can Achieve’ Bill, Commission on No Child Left Behind, July 18, 2007.
Michael Sandler, “McKeon Lays Down Marker for Education Law Renewal,” CQ Today, July 16, 2008.
Author: DAD

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House Panel Passes 2007 Farm Bill

After a three-day markup, the House Agriculture Committee passed H.R. 2419, the 2007 Farm Bill, by a voice vote. Some major changes in the bill include country of origin labels on all meat products, and a provision that bans farmers with more than $1 million in annual adjusted gross income from collecting government subsidies. This and other changes to subsidy programs will save $226 billion over five years, Peterson said, helping the bill meet House budget rules.

For schools, a mild expansion of the Fresh Fruit and Vegetable Program (FFVP) can be considered both good and bad news. After the Subcommittee on Operations, Oversight, Nutrition and Forestry held its markup, the FFVP expansion carried into 50 schools in every state, contingent on $100 million in offsets. The initial Chairman’s mark included this expansion, but it did not make it through the full committee markup. The manager’s amendment, offered on Tuesday, scales back the expansion and authorizes funds through 2012, rather than relying on contingent funding. The new proposal would authorize $70 million for expanding the program into 35 schools in each state. Any additional available funds would be distributed to states based on population.

The bill may go to the House floor next week, depending on where the various appropriation bills stand. Many members wish to offer various amendments, though it is unclear if the House Rules Committee will send the bill to the House floor under an open rule (which allows unlimited amendments) or whether it will only rule on a few amendments in order for debate. While some of the crop and commodities provisions may be subject to debate, there does not seem to be any real dissent to the FFVP expansion, so any change would likely increase the expansion. After passing the House, action may stall since the Senate committee has not even started considering the bill. Although the House Committee approval marks a significant step to final passage, there is still a long way to go before the 2007 Farm Bill reaches the President’s desk.

Resources:
Catharine Richert, “Farm Policy Critics Vow House Floor Challenge as Panel Approves Bill,” CQ Today, July 19, 2007.
Charlene Carter, “House Ag Finally Approves Farm Bill, Including Country-of-Origin Labeling Requirements for Meat,” Congress Now, July 20, 2007.
Author: SAS

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Senate Panel Passes SCHIP Proposal

On Thursday, July 19, the Senate Finance Committee passed the Children's Health Insurance Reauthorization Act, finally bearing results from the ongoing debate on the State Children’s Health Insurance Program (SCHIP). While leaders in both chambers failed to add SCHIP reauthorization as an amendment to the fiscal year 2007 (FY07) continuing resolution and the FY07 supplemental appropriations bill, Finance Committee chairman Max Baucus (D-MT) and ranking member Chuck Grassley (R-IA) have finally brokered a deal along more moderate terms. However, the story is far from over, as the bill must survive a floor vote before facing down a threatened Presidential veto.

SCHIP, which provides health insurance for about 6 million children from low-income families that are not poor enough to qualify for the larger Medicaid program, is considered by many to be the most important health legislation that Congress will take up this year. The bill expands the program by $35 billion over five years, far short of the $50 billion authorized under the FY08 joint budget resolution. The committee bill will use a tax increase on cigarettes, from $.39 to an even $1, to offset the increase. Chairman Baucus claims that the increase will expand the program to cover an additional 10 million uninsured children. Despite opposition from the extreme right and left of each party, the Committee passed the bipartisan deal.

The proposal faces contentious debate on the Senate floor. Some liberals in the majority feel the expansion is too mild. Sen. John Kerry (D-MA) has pledged to bring an amendment to the floor that will increase the expansion to the $50 billion agreed to in the budget resolution. House leaders have also announced their intentions to pass a $50 billion increase. On the other side of the spectrum, fiscal conservatives feel the expansion is too extreme. President Bush, who proposed only a $5 billion increase, has already promised to veto the bill, unless Congress draws back the funding increase. Congress and the White House find themselves at odds over funding levels on nearly every spending bill for FY08, putting the SCHIP proposal on very thin ice.

Resources:
Deb Riechmann, “Bush Threatens to Veto Insurance Measure,” Associated Press, July 18, 2007.
Stephen Langel, “SCHIP Clears Major Hurdle, but Compromise With White House Considered Unlikely,” Congress Now, July 19, 2007.
Timothy R. Homan, “Senate Panel Approves Renewal of Health Insurance Program for Children,” CQ Today, July 19, 2007.
Author: SAS

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FY08 House Appropriations

On late Thursday night (7/19), the House passed H.R. 3043, the Labor-HHS-Education appropriations bill for the fiscal year 2008 (FY08) by a vote of 276-140. The bill provides $151.6 billion in discretionary spending, including an additional $975 million for No Child Left Behind programs.

The House spent two and a half days debating many amendments that attempted to remove earmarks, shift money within the bill or provide new funding to particular programs and projects. Demonstrating his frustration with the process, Appropriations Committee Chairman Obey (D-WI) offered an amendment to strike project requests from the legislation. He called it the "put up or shut up" amendment, stating that he was tired of having the committee serve as a “punching bag" for the press corps. The amendment was rejected and the debate continued.

The President has stated that he will veto the bill if it exceeds his appropriations request and it does that by $12 billion. "The President has got the right to initiate spending bills,” said the President. “They've got the right to decide how much money is spent. If they overspend or if they try to raise your taxes, I'm going to veto their bills."

Thursday night’s vote was 14 votes short of the 290 votes required to override a Presidential veto. That means that the Democratic leadership will have to consider strategic alternatives if the President vetoes the bill. One option is to include the Labor-HHS-Education bill as part of an omnibus package consisting of multiple spending bills, making it very difficult for the President to veto such a large amount of funding and even more difficult for members of Congress to sustain a veto.

On the Senate side, the Labor-HHS-Education bill is not expected to go to the floor until after the August recess. On June 21, the Senate Appropriations Committee approved the FY08 Labor-HHS-Education Appropriations bill. The Senate bill allocates more than $152 billion for Labor-HHS-Education, $9 billion more than the President requested, and about $1 billion less than the House Subcommittee.

Resources:
Scott Cox, “Appropriations Roundup and Outlook,” Gallery Watch, July 20, 2007.
Scott Cox, “House Nearing Final Vote on Labor-HHS-Education Legislation,” Gallery Watch, July 19, 2007.
Author: DAD

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Senate Panel Reaches First Agreement on SCHIP

Debate on the State Children’s Health Insurance Program (SCHIP) continued this week as members of the Senate Finance Committee announced an agreement on Tuesday, July 10, for expansion of the program. House and Senate leaders have carried on negotiations for most of this session regarding the program, but have consistently failed to reach a consensus. While the Finance Committee announcement marks the first significant agreement on SCHIP expansion, it falls significantly short of the $50 billion increase Democrats agreed to in the fiscal year 2008 joint budget resolution.

SCHIP is a state-federal insurance program covering about 6 million children and about 600,000 adults. It is intended to cover children of low-income families not poor enough to qualify for the larger Medicaid program. Under the bipartisan agreement, the expansion would cost $35 billion over five years, funded with a $.61 increase to the $.39 federal cigarette tax, to an even $1 per pack. Although committee leaders reached an agreement, the proposal may be too small an expansion to suit some Democrats and too expensive for many Republicans. Finance Committee Chairman Max Baucus (D-MT) has scheduled a markup on the legislation for Tuesday, July 17.

President Bush proposed a far smaller increase for SCHIP combined with tax deductions or credits for middle-income families to help them buy health insurance. If the White House feels the increase is too extreme, any bill that comes out of the Finance Committee may find itself on a long list of bills with veto threats levied against it. The President already stated his intention to resist the proposal, though he has not publically threatened a veto at this point. Sen. Gordon H. Smith (R-OR), an architect of the agreement, is attempting to defend the proposal against criticism from the White House.

Resources:
Alex Wayne, “Senators’ Deal on SCHIP Could Be Tough Sell,” CQ Today, July 10, 2007.
Alex Wayne, “Senate Republicans Challenge Bush on SCHIP,” CQ Today, July 12, 2007.
Author: SAS

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House Passes Higher Education Reconciliation Bill

On Wednesday, July 11, the House passed H.R. 2669, the College Cost Reduction Act, by a vote of 273 to 149. The reconciliation bill, mandated in the fiscal year 2008 joint budget resolution, cuts $19 billion in federal subsidies to student lenders over five years, while increasing grants for needy students and halving interest rates on federally backed loans with the savings. The bill would also create nine new entitlement programs, including grants for students who become public school teachers, loan forgiveness for certain public-sector employees, income-contingent loan repayment, grants for certain minority-serving institutions and matching grants for companies’ philanthropic efforts to improve college access and retention. Democrats and Republicans engaged in impassioned debates over the entitlement programs and subsidy cuts over the course of two hours on the House floor.

After debating the underlying bill, which increases the maximum Pell grant to $5,200 over five years, cuts interest rates on subsidized student loans in half to 3.4 percent and increases the federally backed loan limit for undergraduate studies by $7,500, to $30,500, Rep. Howard “Buck” McKeon (R-CA), the ranking Republican on the House Education and Labor Committee, brought a substitute amendment up for debate. The substitute would have reduced subsidies in the loan programs and invested most savings in the Pell Grant program by providing increases of $350 in 2008 and $100 each year thereafter. After sixty minutes of heated discussion, the amendment was defeated, 189-231.

“This bill is disguised to reduce the federal deficit, but it creates nine new entitlement programs,” Rep. McKeon stated. Citing a cost of $32 billion after five years, Rep. McKeon noted that President Bush has pledged to veto the bill as it stands. However, the Bush administration proposed cutting lender subsidies earlier this year, so there is still a small chance the bill may become law. In the time it takes for the Senate to pass their version of the bill and go to conference, Congressional leaders have ample time to reach an agreement over the entitlements.

Resources:
Jennifer Bendery, “House Passes Student Aid Bill, Despite White House Veto Threat,” Congress Now, July 11, 2007.
Diana Jean Shemo, “House Passes Overhaul Plan on Student Aid,” New York Times, July 12, 2007.
Author: DAD, SAS

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