GOP Tax Bill Draws Bitter Criticism
The White House and Congress are on a collision course as both sides try to build public support for tax cuts and future spending plans that will affect education.
The House and Senate, in largely party-line votes, approved a massive $800 billion tax cut in early August that critics say would eat up most of the projected federal surplus during the next decade. They complain that the plan, if enacted, would provide tax breaks for the wealthy at the risk of jeopardizing Social Security, Medicare, and education programs.
“I have seen a lot of political things, but I have never seen a sham like the one that we are trying to pull on the American people today,” says Rep. Charles Rangel (D-N.Y.), a senior Congressional Black Caucus member, during floor debate.
Republicans countered that their plan would return money to taxpayers — not pump more money into wasteful federal programs. They also noted that their tax package provides some benefits for education — up to $20 billion in new tax credits affecting student loan payments, education savings accounts, and workers who need training to keep their jobs.
President Bill Clinton will veto the package, the White House says, because it will jeopardize programs for senior citizens, the poor and children. The plan is “risky and plainly wrong for America,” Clinton says.
Meanwhile, all the debate over tax policy is leaving little time for consideration of fiscal year 2000 appropriations bills for education and other programs. The House and Senate adjourned for August recess without even issuing a proposal on how to divide limited federal dollars for education and human service programs after Oct. 1.
The lack of action has left most advocates predicting that Congress will resort to short-term funding resolutions to keep government programs operating after Oct. 1.
Education advocates remain worried about the status of appropriations because Congress has not moved to lift tight spending caps on domestic spending enacted as part of a balanced budget plan in 1997. Democrats and a few Republicans have argued for a lifting of the caps because of the growing government surplus and what some consider an unacceptable alternative — deep cuts in domestic spending.
One possible middle ground is for Congress to “forward fund” education programs next year using expected government revenue for the 2001 fiscal year. One advocate says the GOP is considering such a maneuver, which he describes as a gimmick that leaves programs on unsure footing.
Congress Modifies D.C. Tuition Break
The new college tuition break for students from the District of Columbia will have only a narrow reach, at least at the beginning of the expected new federal program.
A compromise among Republican lawmakers would limit the reach of the new program only to public universities in Maryland and Virginia, the two states bordering the District. Under the plan, D.C. students will pay in-state tuition rates to attend public colleges and universities in either of these states.
The original plan from Del. Eleanor Holmes Norton (D-D.C.), among others, called for universal access to in-state tuition rates at public colleges and universities in any state.
D.C. officials agreed to the new plan in part because of Republican concerns about cost, congressional aides say. The White House and GOP leaders have agreed to set aside $17 million for the new program, and some lawmakers voiced concern that the program may quickly get out of hand without a gradual implementation plan that includes initial benefits only at public colleges in neighboring states.
The House of Representatives had approved a bill with wide-ranging access, but several Senate Republican committee leaders urged caution on the program. Key players in the compromise included Sens. George Voinovich (R-Ohio), who chairs a D.C. governmental affairs subcommittee, and James Jeffords (R-Vt.), chairman of the Senate education committee.
The compromise should ease the way for final congressional passage when lawmakers return to work in September, a Senate aide says.
Meanwhile, the compromise Voinovich presented to the Senate would give the D.C. mayor the authority to administer the program, with consultation from the U.S. Education Department. The mayor’s office had wanted authority for the program, but some lawmakers — including Jeffords — had expressed concern that the program, at least initially, required a strong federal presence to offer advice and expertise.
Under the new compromise, the mayor’s office and ED will enter into an agreement to carry out the program. ED also will assign an employee to serve as an advisor to the D.C. mayor.
Also, students may receive aid of no more than $10,000 for one year and $50,000 per individual over the course of a college career. In general, the federal funding will help colleges cover the cost of offering in-state tuition to D.C. residents.
Another provision of the compromise would authorize aid to the University of the District of Columbia, which to date has not received funds from federal money reserved under Title III of the Higher Education Act for historically Black colleges and universities.
Under the compromise, if UDC receives no Title III funding, it would get $1.5 million for the year 2000 as well as “such sums as necessary” in future years — effectively leaving the issue of future funding to the annual appropriations process.
Another element of the compromise would allow students to receive some tuition assistance if they attend private colleges in D.C., Maryland, or Virginia. D.C. students would receive no more than $2,500 per year, or $12,500 throughout an academic career, to attend a nearby private college or university.
Dropouts May Face Repayment of
Federal Grant Assistance
College dropouts may not just lose out on their education — they may have to repay some of their federal grants under a new U.S. Education Department proposal.
Needy students who leave school may need to reimburse the federal government for part of their Pell Grants under the plan, which ED outlined in early August. Those most at risk are students who drop out before they complete 60 percent of a semester for which they received federal aid.
“If the amount the student was disbursed is greater than the amount the student earned, unearned funds have to be returned,” ED said in its Aug. 6 proposal.
The plan followed a series of sometimes-contentious discussions as ED and higher education organizations negotiated final rules for the 1998 Higher Education Act Amendments. Among other objectives, that law sought to simplify the process of processing aid refunds when students drop out of college.
The issue has divided many higher education officials, including some in the organization that represents financial aid directors.
“Some of our members are clearly upset. Others are probably supportive,” says Larry Zaglaniczny, director of congressional relations at the National Association of Student Financial Aid Administrators.
ED’s plan is in the Aug. 6 Federal Register, and colleges have until Sept. 15 to comment on the issue. The complete proposal is on the Internet at <www.ed.gov/ legislation/FedRegister>. Click on proposed regulations and then on proposals issued Aug. 6. Comments should go to Wendy Macias, ED, P.O. Box 23272, Washington, DC 20202; (202) 708-8242.
Colleges Must Step Up
Action on Y2K Issues
Education Secretary Richard Riley is stepping up efforts to see that colleges and universities are ready for any potential computer disruptions after Jan. 1.
Saying he was “disappointed” by colleges’ lack of response so far, Riley sent a letter to every college president this month urging vigilance on the year 2000, or Y2K, issue. Colleges that do not fix and test their systems could face disruptions in student aid delivery and even in basic administrative operations.
Only 32 percent of colleges answered a recent ED survey on Y2K, and Riley says he may have to make it mandatory for colleges to file a response. ED’s computer systems are Y2K-compliant, he says, but the department also has to make sure that it can communicate effectively with colleges and universities and not suffer computer breakdowns.
Even those responding to the survey indicated more work must be done. Among respondents, only 30 percent of colleges said they had Y2K-compliant systems. ED has a special Postsecondary Education Y2K Readiness Kit available on the Internet at <www.ed.gov>. The president’s council on Y2K issues also has information at <www.y2k.gov>.
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