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Wait and See

October 12, 2011

WASHINGTON -- Time is running out for the "super committee," the 12-member bipartisan panel charged with reducing the U.S. government's deficit by $1.2 trillion before Thanksgiving. Deliberations remain secretive, with even some members of Congress complaining that the group should be more transparent. With the fate of many higher education and other domestic programs potentially at stake, higher education's supporters in Washington say they are concerned but uncertain how much they can influence this debate.

Any deficit reduction agreement could have consequences for higher education programs, including Pell Grants, federally subsidized student loans, funding for scientific research and the many smaller federal programs on which colleges and universities depend. Tax credits and deductions that benefit colleges, students and their families could also be cut, including tuition tax credits, deductions for charitable contributions (including to colleges), or the tax deferrals for college savings plans.

If the committee fails to reach an agreement -- a possibility that some observers say is increasingly likely, given the partisan gridlock in Washington -- the consequences, across-the-board spending cuts to domestic discretionary spending, could be equally damaging.

The super committee is intended to deal with mandatory spending, including some entitlements, and taxes -- not the details of the domestic discretionary programs that make up just 15 percent of the overall federal budget but include almost all of the money for higher education and research. Still, the growing Pell Grant Program, which includes both discretionary and mandatory spending, is said to be one of the super committee’s prospective targets. Federally subsidized student loans, a $40 billion mandatory spending program, are another tempting source of savings. And the committee could always choose to cap discretionary spending, squeezing Education Department budgets and money for science agencies, and affecting many higher education programs for years in the future.

“We’re deeply concerned about possible changes to federal support for student and and scientific research,” said Terry Hartle, senior vice president for government and public affairs at the American Council on Education, describing the concern as a “very generalized anxiety, not specific, verifiable threats.”

The possible threats are numerous. Observers disagree on how likely the committee is to propose specific changes to programs or tax provisions, but the New America Foundation’s Federal Education Budget Project picked out several that could be targets: college savings plans, tax credits for tuition, and mandatory spending for Pell Grants and student loans.

Most other actions would have at most an “indirect effect” on education programs, the foundation wrote in a policy brief. “There’s sort of this practical limit on doing anything on the appropriations side of the budget,” said Jason Delisle, the budget project’s director. Because money has not been appropriated for discretionary programs after 2012, it would be difficult for the super committee to make specific cuts, he said.

So far, higher education associations are pushing to preserve their traditional priorities, including money for financial aid and research spending. But lobbying the super committee presents its own challenges: members have been deluged by groups calling on the committee to come up with a long-term solution on spending and taxes that still leaves their priorities untouched. It is operating with an unusual degree of secrecy, including closed meetings that even some other members of Congress have called insufficiently transparent.

“If you can’t anticipate it, you can’t really influence it,” said Becky Timmons, assistant vice president for government relations at the American Council on Education. The committee’s secretive deliberations are forcing higher education organizations into more of a “wait and see” posture than they might otherwise take, she said. “There’s not an easy entrée, because in order to have any points that might be listened to, you have to know what it is they’re talking about.”

Most groups said they plan to keep the lobbying specific, focusing on the programs that are most important, especially financial aid and federal research. And some say they are realistic about whether those efforts will have any effect at all, given the pressures the super committee is under.

“Since we’re not in the room, it’s tough to speculate,” said Cynthia Littlefield, director of federal relations at the Association of Jesuit Colleges and Universities. “I think all we can do is articulate, as best as possible, the ramifications and the importance of all these programs and how devastating it would be if there were any cuts proposed.”

Unlike in other spending debates, such as earlier this year, when higher education associations offered suggestions on how best to cut Pell Grants if such cuts had to be made, no one has come forward with a blueprint for cutting higher education spending. In part, that is because financial aid has sustained so many cuts already: the loss of year-round Pell Grants, the end of subsidized graduate loans, and proposals to stop subsidizing Stafford Loan interest when students leave school or to cut back eligibility for Pell Grants. While some of those savings were redirected to the Pell program, others were used for deficit reduction.

“We have given enough already,” Littlefield said. “We cannot continue to balance the budget on the backs of students.”

Even if their officials say they would like to see a “grand bargain” or “big deal” that puts the country on sounder fiscal footing, most associations have not weighed in -- and some say they have no plan to -- on the bigger questions facing the committee, such as how spending cuts and tax or revenue increases should be balanced.

The exception so far has been the Association of American Universities and the Association of Public and Land-grant Universities. In a letter to the super committee last month, the associations made the traditional pleas to preserve research and financial aid: "For our nation to create jobs and new industries there should be a sustained federal commitment to scientific research and to ensuring that every citizen has access to higher education,” the leaders of more than 130 colleges wrote.

But the letter also called for a “big agreement -- not incremental steps,” asking the committee to address spending on entitlement programs such as Medicare and Social Security and to reform the tax code (although it declined to say just how the committee should approach those two controversial subjects).

“We think as an academic community, we’ve got some responsibility not to just say specific things that affect us, but to talk about the whole,” said Peter McPherson, president of the land-grant association. “This is not special pleading. It’s an argument for the future of the country.”

University presidents from the AAU and APLU will take the lead on talking to individual members of Congress about keeping education and research as a priority, he said. "We're going to make sure it's done systematically," he said. "It's my belief that it’s a better conversation when one of our presidents talks to their senator or congressman."

The other associations have not yet released plans for activism or advocacy at the campus level.

But for all of the discussion about harm the super committee could do, most add that failure to reach an agreement would be bad for the country and could affect colleges and universities as well. An outcome in which the sequestration kicks in, leading to mandatory spending cuts and big reductions in discretionary domestic spending, “would be very damaging,” said Barry Toiv, vice president for public affairs at the AAU.

Still, Congress would have a year between the super committee’s deadline -- the House and Senate are supposed to vote on a deficit reduction proposal by Dec. 23 -- and the spending cuts taking effect in January 2013. “It’s hard to determine how real the sequester is,” Toiv said. “There’s a lot of time and a lot of Congressional action to take place between now and January 2013.”

 

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