A Pleasant Budget Surprise

Democratic plan for 2007 would increase maximum Pell Grant by $260 and provide $620 million in new funds for biomedical research.
January 31, 2007

With the Bush administration just a few days away from unveiling its budget blueprint for the 2008 fiscal year, college leaders got some surprisingly upbeat news about the 2007 budget, which some of them had given up for dead.

The House of Representatives is expected to vote today on catch-all legislation that would set spending for most federal agencies for the 2007 fiscal year, which began in October. Democratic leaders had sought in recent weeks to dampen expectations that they would be able to make any meaningful changes in the budget framework that the Republican-led 109th Congress had left behind, going so far as to say that they were likely to simply extend the 2006 budget levels through the end of 2007.

But the Democrats had also suggested that they would try, within the confines of the tight fiscal constraints of the overall budget picture, to move some money around at the margins to make at least a symbolic nod toward programs that reflected their party's priorities.

And readjust they did in the joint funding resolution they introduced Monday night. The continuing resolution called for shifting a total of $2.3 billion (out of an overall budget of $463.5 billion) to health, education and labor programs, including an additional $620 million for biomedical research at the National Institutes of Health (to a total of $28.969 billion, a rise of 2.2 percent) and nearly $1 billion more for the Pell Grant Program. The new funds for Pell, which would bring funding for the program to $13.66 billion, would allow the maximum grant for low-income students to rise by $260 to $4,310, which would be the first increase in grant size in five years.

The budget bill that the Democrats produced, which was made necessary because the 109th Congress completed work on only two of the annual appropriations bills that finance the federal government’s operations (those for the Departments of Defense and Homeland Security), would also elevate spending on several other key academic research programs: funds for the National Science Foundation’s research directorate would rise to $4.67 billion, an increase of about 7 percent, and the Energy Department’s Office of Science would get about $200 million more than it received in 2006.

Apart from the increase in funds for Pell, the Democratic budget would keep most other student aid programs at their 2006 budget levels. The legislation also would wipe out much of the “earmarked” funds that are typically contained in appropriations bills, hundreds of millions of dollars of which go to colleges and universities most years.

Still, college lobbyists were fairly giddy at the turn of events, which culminated more than a year of effort on their two biggest priorities: generating a Pell Grant increase after four flat years and avoiding a real-dollar decline in funds for the NIH. “Within the constraints of what the House and Senate leadership and the appropriators were facing, what they were able to do is heroic,” said Pat White, director of federal relations at the Association of American Universities. “With so many other competing priorities, for them to take the longer view and make investments in research and education is, to me, really inspiring.”

“It’s almost like, ‘Pinch me, pinch me,’” said Cynthia A. Littlefield, director of federal relations at the Association of Jesuit Colleges and Universities. “Given how long we’ve been working for this, this is almost anticlimactic, but happily so.” Littlefield and other lobbyists praised Democrats like Rep. David Obey of Wisconsin and Sen. Tom Harkin of Iowa, but Republicans like Sen. Arlen Specter of Pennsylvania as well.

Throughout last year’s attempts to craft spending bills for education and science programs, lawmakers in both parties struggled to come up with enough funds pay for programs like the NIH and Pell Grants that have broad bipartisan support. Democrats complained bitterly that “misplaced Republican priorities” (a phrase that spilled out of the mouths of Obey and other Democratic appropriators at every turn) put “tax cuts for the wealthy” ahead of day-to-day concerns of working Americans, and during the campaign that preceded the November election, Democrats vowed to turn those priorities on their head if they took back Congress.

But the Democrats had no real desire to begin doing that by finishing up the 2007 budget-setting process that the Republican-led Congress did not complete, in part because the overall constraints of the 2007 budget left them little room to maneuver, and some fairly major budget holes to fill.

Democrats appear to have come up with the extra funds partly by eliminating most earmarks and partly by moving out of the bill money that the government was planning to spend on military base closings. Republicans derided the latter move, particularly, as a bit of smoke and mirrors magic that will require the government to pay up later, but it wasn’t clear how aggressively Republican members of Congress would fight the Democratic measure. Democratic leaders in the House plan to bring the budget measure to the floor today in a way that will not allow Republicans to propose amendments to it, but the Senate doesn’t impose such restrictions.

It’s also unclear whether President Bush will threaten to veto the measure. A Statement of Administration Policy released late Tuesday bemoans the fact that the Democratic plan does not include full funding for research programs at the National Science Foundation, the Energy Department science office, and National Institute of Standards and Technology called for in President Bush's American Competitiveness Initiative. And it says the White House "strongly objects" to the redistribution of the funds for base closings, among other things. Unstated is whether those "strong objections" are strong enough to draw a potential veto, although Congress watchers speculated that the administration would be unlikely to pick a fight over the 2007 budget when more significant issues, like the Iraq war and the 2008 budget, are around the corner.

The Democratic budget for 2007 comes as the White House is presumably putting the finishing touches on its budget for 2008, which is set for release on Monday. Speculation has been growing in recent days that the administration will propose a sizable increase in the Pell Grant Program – but that it will do so, in large part, by proposing to shift funds away from other student aid programs, most likely the Supplemental Educational Opportunity Grants Program, which provides additional funds to low-income students, most of whom are Pell recipients.

That proposal, should it emerge, is likely to be highly unpopular with college officials, who are certain to see it as robbing Peter to pay Paul.

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