Washington Wrapup: Budget and Bishop

In year-end rush, Congress weighs budget that would close Pell shortfall; House passes DREAM Act; 36 days after election, a higher ed champion formally retains House seat.
December 9, 2010

WASHINGTON -- The final days of a Congressional session are our democratic government at its worst, with lawmakers' frenzied rush to finish their work and head home exacerbating what often seems an inglorious emphasis on surface over substance. Add to that the dynamics of a pending party changeover in Congress, with the balance of power to switch to Republicans in the House of Representatives and toward them in the still-Democratically controlled Senate, and you have the makings of an environment not terribly conducive to sound legislating.

In that climate, lawmakers in both houses are dealing with several issues important to higher education. Some -- like consideration of the so-called DREAM Act, which creates a path to citizenship for some college students who came to the United States as minors and were educated in the country, without legal authority to remain -- are specifically relevant to higher education, if of most intense interest to advocates for and against illegal immigration.

Others -- like decisions about how to allocate federal spending for the 2010-11 fiscal year, which began in October, and whether to extend expiring tax provisions -- are broadly applicable but have potentially huge implications for colleges and their students.

Taking them one by one, the simplest issue -- at a time when nothing is simple -- is the status of several tax benefits relevant to higher education.

Tax breaks. Although President Obama is still wrangling both with Republicans and with members of his own party over the scope and shape of a tax package, it seemed relatively likely Wednesday that some version of a tax bill would soon pass, and that the legislation would extend or reestablish several noncontroversial items that matter to colleges and their students.

They include a provision that allows employers to offer up to $5,250 in tuition assistance a year to employees; a tax credit for corporations that sponsor research at colleges and universities; a provision allowing tax-free contributions to Coverdell Education Savings Accounts; and tax credits and deductions for college expenses, although an expanded tax credit adopted as part of the 2009 economic recovery legislation would be allowed to expire.

DREAM Act. Last Wednesday night, by a margin of 216-198, the House passed the immigration measure that has very strong support on many campuses but remains an intensely partisan political issue. With aggressive last-minute pushing from the Obama administration, which included direct pleas to Democratic legislators from the secretaries of education and labor, the measure won sufficient backing in the House.

But Sen. Harry Reid, the majority leader, postponed a vote in the Senate as Democrats acknowledged they did not have the necessary 60 votes to cut off a threatened Republican filibuster. A vote in the Senate is scheduled for this morning.

2011 budget. The process for setting the federal budget for the current fiscal year is complicated, because of conflicting approaches in the two chambers and the pending changeover in the House.

Because Congress has passed none of the 12 annual appropriations bills that keep the federal government operating, lawmakers have thus far kept the government running through a series of short-term "continuing resolutions," the latest of which expires Dec. 18.

The House late Wednesday passed another continuing resolution -- but this one would continue for a long time, funding the government all the way through the 2011 fiscal year, to next September. House Democrats have strong motivation to pass a budget now, knowing that any failure to enact a spending plan now would mean that Republicans -- who have vowed to slash non-defense discretionary spending once they regain control -- could go off in a very different direction when the next Congress convenes.

While their flexibility to move money around within a constrained budget is limited, as Rep. David Obey vigorously complained in his comments about the bill Wednesday, Democrats have made some choices in framing the yearlong spending plan -- several of which would benefit higher education greatly (and might not be replicated if Republicans had their say).

Most notably, the legislation includes funds to close a nearly $5.7 billion shortfall in the Pell Grant Program and provide enough discretionary funds to keep the maximum grant at $5,550 in 2011. Higher education and student groups have warned that failure to backfill those funds could cut the maximum grant by $845, or 15 percent, potentially eliminating access to the program for "hundreds of thousands of students," according to a letter that numerous groups sent to senators Wednesday. Most other higher education programs would be funded for 2011 at their 2010 levels, which for many programs was the same as for 2009. But given the deficit-cutting rhetoric taking hold in Washington, most would feel fortunate to get that.

In that spirit, Republican members of the House on Wednesday criticized the yearlong funding approach, which they said would lock in spending levels that were too high and cripple Republicans as they tried to get spending under control in the next Congress.

“Instead of this last ditch effort by the Democrat majority to give themselves more time to spend taxpayer dollars, Congress should extend the CR until the next Congress," Rep. Jerry Lewis of California, the senior Republican on the appropriations panel, said in a statement. "This would allow the new House Republican majority to begin putting our nation’s fiscal house in order by completing the Fiscal Year 2011 Appropriations bills at 2008 levels, saving taxpayers $100 billion."

While the House pursued the yearlong approach, their colleagues in the Senate are reportedly considering passage of an omnibus bill, which instead of largely locking in the 2010 spending levels would combine all of the 12 appropriations bills into one massive one, with many programs funded at the (typically higher) levels recommended in President Obama's 2011 budget plan, to the extent they were not adjusted this summer in committee-passed bills.

The other major reason why senators might be drawn to omnibus legislation is because it -- unlike continuing resolutions -- can include earmarks, which members of the Senate seem loath to give up, despite vows in the House and promises by newly elected members of Congress (and senators-to-be) to stamp out the practice of legislator-directed spending. College lobbyists said they were optimistic that senators seemed inclined, too, to include the "Pell Grant fix," shorthand for the closing of the program's multibillion-dollar shortfall, in whatever form of budget legislation they ultimately favor.

The budget picture is likely to become slightly clearer by the weekend, with Congress looking to skip town by Tuesday.

Tim Bishop Returns

In many discussions of higher education policy in Congress in recent years, one voice has tended to stand out for the understanding it reflects of realities in higher education. In many ways, that's not surprising: the man behind that voice, Rep. Tim Bishop, a New York Democrat, spent 29 years as an administrator at Long Island's now-defunct Southampton College, and is much more intimately familiar with higher education than are most of his colleagues.

Such familiarity doesn't always breed support for higher education -- just spend some time listening to the higher education views of Rep. Virginia Foxx, another former college administrator who spent time on the House education committee. But it is the combination of Bishop's knowledge and his advocacy for higher education that has made him a favorite of college leaders, and that had so many of them upset as his re-election has hung in the balance even since the Nov. 2 balloting.

"I usually get up every morning and immediately look at the sports scores, but for the last month I’ve gotten up and looked to see if Tim Bishop had been reelected," Terry W. Hartle, senior vice president for government and public affairs at the American Council on Education, said in an e-mail message Wednesday.

On Wednesday, Hartle and his colleagues finally got the word they had been hoping for, as Bishop's opponent, Randy Altschuler, conceded the race, ending the last lingering campaign for Congress in 2010.

In an interview late Wednesday, Bishop seemed relieved to have survived the tight race but fully cognizant that the next Congress would pose a very tough set of challenges for him, and for other advocates of higher education, on several key college-related issues.

Bishop said he was proud of the steps that Congress has taken in recent years to bolster the Pell Grant and otherwise improve college access and affordability, but that he expected "both principles will be under assault" in the next Congress. Republican leaders -- including Rep. John Boehner, the incoming speaker of the House and a former head of the House education committee -- "say they want to cut $100 billion a year of domestic discretionary spending," Bishop said.

If that's the case, he said, Pell Grants and other financial aid programs -- including the Perkins Loan Programs and the other two campus-based financial aid programs, about which Bishop is especially passionate -- will surely be targets. And recommendations like the one from President Obama's deficit commission to end the federal government's in-school subsidy for student loan borrowers makes a proposal to end that benefit likely, Bishop said. "I'm very worried about that."

On the other major higher education issue likely to preoccupy the next Congress -- the status of for-profit higher education -- Bishop expressed some slightly surprising views in the interview Wednesday.

In many debates over for-profit colleges in recent years, Bishop has been a critic, advocating a much tougher approach to student loan defaults in 2007 (which the commercial sector strongly opposed and ultimately softened slightly). And as recently as June, he co-signed a letter urging the Government Accountability Office to conduct a thorough review of for-profit colleges, given critical news reports raising questions about the sector's quality.

But in the interview, he expressed doubts about the wisdom of the Education Department's proposed approach to ensuring that for-profit and other vocational programs prepare their students for "gainful employment," saying that he and another Democrat, Rep. Rob Andrews, were weighing legislation that would "try to identify real quality measures, as opposed to surrogate measures," to assess the quality of postsecondary institutions. Put simply (and perhaps overly simply), the agency has aimed to develop metrics to hold programs accountable for loan repayment rates and the debt service-to-income ratios of their graduates and dropouts, with the goal of identifying costly programs whose students rack up significant debt and then fail to get jobs that pay enough for them to pay off their loans.

"I believe that having a measure ... that assesses whether degree-granting programs are accomplishing their goals and are worth what students are asked to pay for them is a reasonable concept," Bishop said, endorsing the Education Department's stated goals for its proposed new regulatory scheme.

"But I believe we need to find a measure that is defensible," he said. Asked if that meant he thought the department's approach wasn't, he said: "I don't believe what we have on table is something that I can support at this point. I worry about measures that potentially discriminate against needy students; and that do nothing" to change the behavior of "an absolutely horrendous low-cost provider."

Bishop said he would feel much more comfortable with "measures that look at actual student performance," including various attainment rates and a more accurate loan default rate, than with the department's attempt to try to bring price into the quality equation.

The New York Democrat also expressed a view that aligns him more closely with some of his Republican colleagues and is likely to send at least a little shiver down the spines of those higher education lobbyists celebrating his reelection.

Asked whether he believes, as supporters of for-profit colleges argue, that it is unfair to single out their sector for tougher regulatory scrutiny about their quality, Bishop said: "I'm very open-minded on that. I don't necessarily believe that we should be disproportionately targeting the for-profit sector.... We all have an obligation to conduct ourselves in a fashion that can withstand any form of scrutiny," no matter the type of institution.


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