The 2007 federal budget was never destined to be a great one for higher education, given the strict spending limits imposed by Congress and the government's generally penurious financial climate.

But the outlook took a fairly drastic turn for the worse late Monday, when Democratic leaders announced that they would essentially punt on the 2007 budget process that the Republican-led 109th Congress had begun, opting instead for a yearlong "continuing resolution" that will for the vast majority of federal programs adopt the spending levels set in the 2006 budget. Congress finished work on only two of the appropriations bills, those for the Departments of Defense and Homeland Security.

"We have decided to dispose of the Republican budget leftovers by passing a year-long joint resolution," Sen. Robert W. Byrd (D-W.V.) and Rep. David Obey (D-Wis.), who respectively will lead the Senate and House Appropriations Committees in the 110th Congress, said in a prepared statement that bashed Republicans for the "fiscal chaos" they had created. "While the results will be far from ideal, this path provides the best way to dispose of the unfinished business quickly, and allow governors, state and local officials, and families to finally plan for the coming year with some knowledge of what the federal government is funding."

Democrats said they were taking this virtually unprecedented tack -- the last yearlong continuing resolution was in 1976-77, and that covered just one bill instead of most of the government -- so that they could focus on the many other priorities and challenges that will require their attention beginning in January, including dealing with the 2008 budget.

While college leaders were hardly thrilled with how the appropriations process for the 2007 fiscal year had been unfolding, they were generally disappointed by the path the Democrats have laid out, for a few key reasons.

First, Congressional appropriators had generally embraced and begun enacting the initial stages of President Bush's American Competitiveness Initiative, which called among other things for doubling spending on basic research in the physical sciences over 10 years. The House had passed legislation that would increase research spending at the National Science Foundation, the Office of Science at the Department of Energy, and the Department of Commerce's National Institute for Standards and Technology by a total of about $1 billion, and those funds are expected to disappear under the Democratic plan, said Kei Koizumi, director of the R&D Budget and Policy Program at the American Association for the Advancement of Science. A 2007 appropriations bill passed by the Senate Appropriations Committee also called for a small increase for the National Institutes of Health, which would presumably be wiped out, too.

Second, while the 2007 budget would have kept funds for most student aid programs at their 2006 levels -- making the Democratic switcheroo largely a wash -- the House had included in its 2007 spending plan a $100 increase in the value of the maximum Pell Grant, which would have been the first increase in the program in five years. That, too, seems likely to vanish.

Lastly, in unveiling their plan for finishing up the 2007 appropriations work, which was endorsed by Democratic leaders in the House and Senate, Byrd and Obey said that the funding resolution they enact would be devoid of Congressional earmarks -- funds that a member of Congress directs to recipients without the peer-review process that federal agencies use to dole out most research funds. Earmarks are controversial but popular (with members of Congress and the lucky recipients alike), and colleges and research institutions would be likely to forgo somewhere in the neighborhood of $1 billion to $1.5 billion in earmarks for research and development in 2007, if the 2006 budget is any indication, Koizumi said. (The fact that Byrd, one of Congress's champion earmarkers, decided to go this route surprised many observers.)

Ironically, the exclusion of earmarks is also one of a handful of outcomes that could conceivably make the 2007 budget outlook for higher education a little less bleak. Koizumi notes that the hundreds of millions of dollars that would under the Democratic plan not go toward earmarks would instead be likely to expand the core budgets of the agencies in question; that could mean quite a bit more money for research supported by the Agriculture and Interior Departments and the National Aeronautics and Space Administration, for example.

In addition, in announcing their plan, Byrd and Obey said that they would "do our best to make whatever limited adjustments are possible within the confines of the Republican budget to address the nation's most important policy concerns." College lobbyists hold out some hope that the Pell Grant increase could be among those "adjustments," given that increasing need-based aid is one of a handful of top legislative priorities that Democratic leaders have set for the new Congress.

But lots of interest groups will be standing in line for those limited funds, so higher education leaders may be likelier to cast their gaze, as the Democrats are largely doing, toward 2008.