Legislation and Guidance
- Appropriators Growing Tired of Waiting
- ED Releases List of Waivers
- House Subcommittee Approves Medicaid Moratorium
- House Panel Approved Student Loan Measure
- Farm Bill Conference Finally Begins
Legislation and Guidance
Appropriators Growing Tired of Waiting
Appropriators are getting ready to begin their work in earnest over the next month, as appropriations season approaches. As budget conferees prepare to finalize the joint budget resolution, appropriators are holding hearings to discuss the Administration’s proposed budget, seeking justifications for what the majority feels is a failure to properly fund federal programs. Meanwhile, members of Congress are diligently working to make sure they have support for funding the programs they feel are most important to their constituents, and the country as a whole.
Congressmen Brian Baird (D-WA) and Philip English (R-PA), the co-chairmen of the House Career and Technical Education (CTE) Caucus, are working to make sure they have support for CTE funding for fiscal year 2009 (FY09). The two Congressmen circulated a Dear Colleague letter, addressed to House Appropriations Chairman David Obey (D-WI); the letter asks that members of Congress oppose the President’s decision to zero fund CTE in his budget proposal. President Bush attempted similar cuts in previous years, but Congress always chooses to fund CTE programs, though not at a level most interested parties would prefer.
Last year, after passing a CTE increase as part of the fiscal year 2008 Labor-HHS-Education Appropriations bill, Congress was forced to pass a small funding cut in order to pass an omnibus bill that the President was willing to sign. While members of Congress such as Baird and English are trying to garner support for their own preferred program, Chairman Obey is already planning a more broad approach to FY09 appropriations. While Congress is likely to pass Defense and Homeland Security bills relatively easily, appropriators are considering passing their other bills, but holding them back from the White House. Operating under the assumption that either Senator Hilary Clinton (D-NY) or Senator Barack Obama (D-IL) will succeed President Bush, Obey and his colleagues are planning to hold off on non-defense domestic bills until a new President is in office.
Before appropriators can begin their real work, House and Senate conferees have to finalize the joint budget resolution. The House narrowly passed the Democrats' $3.04 trillion FY09 budget plan on March 13, by a vote of 212-207. The Senate passed its $3.08 trillion budget resolution in the early morning houses of March 14, by a vote of 51-44. Despite the Senate’s slightly higher overall spending cap, which includes both mandatory and discretionary spending, the House’s resolution allows for $1.014 trillion in discretionary spending while the Senate proposal seeks $1.010 trillion. That puts the House about $22 billion and the Senate $18 billion above the President’s discretionary request of $992 billion. This difference needs to be reconciled before appropriators can begin their work.
In preparation for a completed budget resolution, the Senate Appropriations Subcommittee on Labor-HHS-Education is planning a hearing for next Wednesday to discuss the budget for the U.S. Department of Education. Secretary Margaret Spellings will testify on behalf of the Administration. She may find the subcommittee to be somewhat hostile to the President’s proposed budget for education. The subcommittee hearing will simply act as a forum for Senators and advocates to voice their opinions on the budget. Funding levels will not be set until after Congress passes a budget resolution.
Traditionally, the budget resolution is expected on or before April 15. If Congress has failed to pass it by the end of April, appropriators will simply deem their own spending caps, based on their chamber’s already agreed to budget levels. Appropriators will likely want to finish most of the work by July, despite the current plan to hold off for a new President. Once the August recess hits, every member of the House, and a third of the Senate, will be entirely focused on their own reelection campaigns.
Since the plan is to delay action, regardless of when appropriations bills are finished, Congress is expected to pass a continuing resolution, to keep the government running through the rest of the year. The President may not wish to allow a continuing resolution to pass, but his own Republican supporters in Congress may not want him to fight the issue during an election year. His status as a lame duck may finally come into play.
Resources
Erin Uy, “House ‘Dear Colleague’ Letter Calls for CTE Funding Support,” Education Daily, April 11, 2008.
ED Releases List of Waivers
On April 8, 2008, the U.S. Department of Education (ED) posted a Notice of Waivers Granted (Outside Source) under Section 9401 of the Elementary and Secondary Education Act (ESEA), as Amended by the No Child Left Behind Act (NCLB). In this notice, ED lists the waivers it granted during calendar year 2007 under the waiver authority in Section 9401 of NCLB.
During 2007, the U.S. Department of Education (ED) granted a total of thirty-five waivers. The majority of these waivers involved the widely publicized “pilot programs” involving NCLB accountability, including: 1) permitting states to operate growth models, 2) allowing districts to “flip” the order of choice and SES, and 3) allowing districts identified for improvement to continue eligibility as SES providers. While ED touted these pilot programs as providing flexibility, the eligibility criteria imposed by ED has been viewed as unnecessarily narrow, prohibiting many states for applying for the “waivers.” The NCLB waiver authority does not mandate eligibility criteria for states or districts interested in waivers; rather the waiver request itself must demonstrate how it will improve academic performance (as described below). These pilot programs will provide useful information to Congress when considering various options under NCLB reauthorization.
Interestingly, ED granted two timeline waivers concerning state assessment systems that permitted the states to use the results of Advanced Placement and International Baccalaureate assessments as substitutes for the assessment required under NCLB. These waivers are significant since ED has generally taken the position that it will not grant waivers of any aspect of the state assessment system, viewing assessments as a fundamental component of NCLB.
Of the 35 waivers in 2007, only two concerned the provisions that were widely waived between 1994 and 2001 (during the era of the Improving America’s Schools Act, the predecessor to NCLB) – eligibility to operate a schoolwide program and eligibility for Title I allocations.
Under Section 7861 of NCLB, the Secretary of Education is expressly allowed to waive any statutory or regulatory requirement, except regarding the allocation of funds, supplement not supplant requirements, and “applicable civil rights requirements.”
In order to apply for a waiver under the NCLB statute, state educational agencies (SEAs) and local educational agencies (LEAs) submit a proposal detailing how the waiver will enhance the quality of instruction and improve academic achievement. The Secretary may grant the waiver for up to an initial period of four years. During the waiver period, SEAs and LEAs must submit a report describing the waiver’s use and evaluating its progress. The Secretary has the authority to terminate the waiver if it is no longer needed to achieve the proposed purposes or if there is inadequate performance. ED must also submit a report to Congress summarizing the waiver and explaining any improvements in the SEA or LEA. Although the statutory waiver requirements are not particularly burdensome and do not have eligibility requirements, Secretary Spellings has added substantial additional requirements to the “pilot programs” that she has instituted. Below is a brief description of these 35 waivers granted in 2007:
ED granted four waivers related to Hurricane Katrina and Hurricane Rita, involving rarely granted waivers of the Title I carryover cap and the Tydings Amendment Requirements:
- The Louisiana and Mississippi Departments of Education were each granted a waiver of Section 1127(b). This permitted the SEAs to waive its LEAs fifteen percent carryover limitation under Title I, Part A funds, more than once every three years. Carryover funds are Title I funds that were not exhausted during the initial year of availability. Typically, a LEA may only carry over fifteen percent of its allocation from year to year. The state educational agency (SEA) may waive the fifteen percent carryover limitation only once every three years as long as it is determined that the LEA’s request is reasonable and necessary, or if the supplemental appropriations become available for Title I.
- The Louisiana and Mississippi Departments of Education were each granted a waiver of the Tydings Amendment, Section 421(b) of the General Education Provisions Act (GEPA) This allowed the SEAs to extend the period of availability for fiscal year 2005 ESEA and Title I, Part A funds, respectively, until September 30, 2008.
ED granted four waivers related to Growth Model Pilots:
- The Alaska, Arizona, Iowa and Ohio Departments of Education were granted waivers of Section 1111(b)(2) of NCLB. This provided SEAs with flexibility to implement growth-based accountability models as part of determining AYP beginning in the 2006-2007 school year. However, Ohio's waiver was contingent on Ohio adopting a uniform minimum group size for all students within the State. This includes limited English proficiency students and students with disabilities. Currently, schools are judged based on the number of students who are deemed to be proficient. The growth-model allows for schools to be assessed based upon the students' growth towards proficiency and would not fail a school if a student subgroup is not testing at the proficiency level.
ED granted four waivers for the pilot program allowing LEAs in need of improvement to maintain eligibility to become SES providers:
- The Boston, Chicago and Hillsborough County Public Schools, and Anchorage School District, were granted waivers of Section 34 CFR 200.47(b)(1)(iv)(B), permitting each LEA to be eligible to apply to its respective SEA to become a Supplemental Education Services (SES) provider to eligible students, even though they were identified for improvement, during the 2007-2008 school year. (Absent a waiver, an LEA is ineligible if it is identified as needing improving.)
ED granted four waivers for the pilot program allowing districts to flip the order of choice and SES in schools identified for improvement:
- The Indiana and Virginia Departments of Education, the Alaska Department of Education and Early Development, and the North Carolina Department of Instruction were permitted to have certain local school districts offer SES, instead of public school choice, to eligible students in Title I schools during the first year of school improvement. (Absent a waiver, Title I requires that in year 1 of school improvement public school choice be offered, and during year 2 both school choice and SES be offered.)
ED granted two waivers on state assessments:
- The Maryland and Virginia Departments of Education allowed each state to use the Advanced Placement and International Baccalaureate assessment results, through the 2009-10 school year, as an alternative to the high school end-of-course assessments for the purposes of determining AYP.
ED granted one school choice waiver due to a desegregation order:
- As a result of actions Florida's Pinella's County Schools was required to take under a desegregation order, the requirement that the LEA identify two or more specific schools to which parents may transfer their children under the public school choice provision of Title I was waived.
ED granted one waiver on schoolwide program eligibility:
- A waiver granted to North Dakota's Bismark Public Schools permitted a middle school to implement a schoolwide program despite having fewer than forty percent of its students from low-income families.
ED granted one waiver of Title I school eligibility requirements:
- Keene School District, in New Hampshire, was granted a waiver allowing for two elementary schools falling slightly below the district-wide poverty line to remain eligible for Title I, Part A services.
ED granted one waiver on transferability:
- Kentucky's Jefferson County Public Schools were granted a waiver authorizing the district to continue transferring up to thirty percent of certain Federal funds to its Title V, Part A allocations to support its high school dropout prevention program, despite being identified for correction action.
ED granted waivers on the administrative cap in the Indian Education Program:
- ED granted thirteen waivers to school districts concerning section 7115(d) of the ESEA. These waivers allowed the LEAs to charge additional administrative costs to the program beyond the usual five percent administrative cost limitation on funds awarded under the Indian Education Formula Grant Program. The school districts that received these waivers are: San Carlos Unified School District, AZ; Whiteriver Unified School District, AZ; Eureka Unified School District, CA; Shasta Union High School District, CA; Ventura Unified School District and Ventura County School District, CA; Bay City Public Schools, MI, Broken Arrow Public Schools, OK; Colcord Public Schools, OK; Muskogee Public Schools, OK; Norman Public Schools, OK; Oolaga-Talala Public Schools, OK; Tulsa Public Schools, OK; Spokane Public Schools (School District 81), WA.
Resources
Doan, Kristina P., No Child Left Behind Waivers: A Lesson in Federal Flexibility or Regulatory Failure?, Admin. L. Rev. 211 (2008).
House Subcommittee Approves Medicaid Moratorium
The House Energy and Commerce Subcommittee on Health met this week to mark up H.R. 5613, the Protecting the Medicaid Safety Net Act. The legislation will impose a one-year moratorium on seven proposed Medicaid changes from the Center for Medicare and Medicaid Services (CMS). The proposed regulations are opposed by many health and education advocacy groups, as well as by most school administrators around the country. H.R. 5613, which will delay any proposed changes until April of 2009, passed out of the subcommittee with little opposition, and is ready for full committee approval, possibly as soon as next week.
During the past year, CMS issued a number of regulations that would change certain Medicaid policies and eliminate or reduce federal reimbursements for a variety of critical Medicaid functions. According to the Congressional Budget Office (CBO), nearly $20 billion in total funding for Medicaid services is at stake during this five-year period. The proposal that concerns school administrators is a new regulation that would eliminate reimbursements for administrative and transportation costs for students receiving special education services under the Individuals with Disabilities Education Act (IDEA).
The Administration, which complains of mismanagement and fraud involved in a number Medicaid-related reimbursements, claims that school funding should go through the U.S. Department of Education, not the Department of Health and Human Services (HHS), which has jurisdiction over CMS. CMS portrays all the proposed regulations as necessary cost-saving measures. Randy Mohundro, spokesman for the American Association of School Administrators, testified before the subcommittee last week that until other federal programs are fully funded, it is impractical to eliminate funding streams for necessary costs and expenses, mandated by federal law.
The bill passed out of the subcommittee, with little opposition after Energy and Commerce Chairman John Dingell (D-MI), offered a manager’s amendment, which replaced the text of the bill with an updated compromise. The new language includes an additional $25 million annually to fight Medicaid fraud and abuse. This provision quieted any Republican opposition that was heard at the hearing. Congressman Joe Barton (R-TX) went so far as to say a bill with that provision might even erase the threat of a Presidential veto. The bill will now go before the full committee, before making its way to the House floor. The Senate has not marked up its own Medicaid legislation, and might simply use a finished House bill as a springboard for its own efforts.
Resources
Drew Armstrong, “House Panel Approves Bill To Delay Federal Medicaid Cuts,” CQ Today, April 9, 2009.
Stephen Langel, “Late Compromise Could Clear Way for Bush Support of Bill to Delay Medicaid Rules,” Congress Now, April 9, 2009.
House Panel Approved Student Loan Measure
Wednesday, the House Education and Labor Committee passed H.R. 5715, the Ensuring Continued Access to Student Loans Act, by a voice vote. Despite the bills’ relatively easy passage, many Republicans have reservations. The bill, introduced by Committee Chairman George Miller (D-CA), is ready for the House floor, possibly as soon as next week. The Senate has a similar bill, but has yet to move forward with it.
H.R. 5715 increases the limits on federally backed student loans of $2,000 per student. For example, unsubsidized Stafford loan limits for undergraduates will increase from $3,500 to $5,500 per student. Miller said that the Act would also increase the total amount of federal loans students can borrow, to $31,000 for dependent undergraduates and to $57,500 for independent undergraduates. The bill is designed to alleviate pressure on the private student loan market, which has tightened as part of the broader “credit crunch.” Miller said that interest rates on the secondary auction market had reached almost 15 percent for bundles of similar loans.
The bill also modifies the federal PLUS loan program for parents to allow greater grace periods for entering repayment. The bill will also prevent lenders from considering mortgage payment issues as a reason to deny a loan. H.R. 5715 clarifies provisions of existing law regarding the availability of capital from the federal government to state student loan guarantors. These “lenders of last resort” are expected to see an increase in demand as the supply of loan dollars tightens in the private sector. The bill leaves the duration of these provisions to the discretion of the Education Secretary.
Congressman Tom Price (R-GA) offered an amendment intended to require offsets to make the legislation compliant with budget-neutral “pay-as-you-go” rules. The amendment failed on a party-line roll call vote of 16-21. Although Chairman Miller and Ranking Member Buck McKeon (R-CA) were on opposing sides on the amendment, the two co-sponsors of the bill agree that they want to keep the legislation budget neutral. How they intend to accomplish this is still a matter of contention.
Similar legislation in the Senate, proposed by Senate Health, Education, Labor and Pensions Chairman Edward Kennedy (D-MA) awaits consideration. In addition to the provisions in the House bill, S. 2815 also takes steps to strengthen the Federal Family Education Loan program to ensure that students can continue to access loans from private lenders if they so choose. Kennedy claims that the bill provides an alternative capital source for lenders who need it to continue making federal loans, at a minimal cost to taxpayers. While the House bill could hit the floor as early as next week, there is no timeline for the Senate’s consideration of S. 2815.
Resources
Niels Lesniewski, “Education and Labor Approves Bills on Student Loans, “ Congress Now, April 9, 2008.
Libby George, “House Panel Gives Swift Approval to Expanded Student Loan Bill,” CQ Today, April 9, 2008.
Farm Bill Conference Finally Begins
Farm Bill conferees finally met this week, months after both chambers passed their own legislation. Lawmakers were unable to come to a compromise, but they have laid the groundwork for the conference, using an updated House proposal as a starting point for debate. While conferees remain optimistic, Senator Tom Harkin (D-IA), Chairman of the Senate Agriculture Committee, is skeptical that they can reach an agreement by April 18, when the current extension expires. Although the Bush Administration stated its opposition to another extension, it may be willing to back off this deadline if it feels that Congress is making significant progress in the next week.
The House opened up the conference by introducing a new proposal, which calls for $285.5 billion over five years, $5.5 billion above baseline spending for the Farm Bill. Heading into the conference, there was a general agreement between conferees on a proposal that came in at $10 billion over the baseline. The White House, however, is not sold on that particular proposal. All parties involved agree that all new costs need to be offset, as there is simply a disagreement over where those offsets will come from.
The White House submitted a list of possible offsets to Congress earlier this year. That list included a number of program cuts and consolidations. Once finished, these offsets would only cover about $5 billion of the new spending. To make up the difference, conferees were looking at getting rid of certain tax incentives, which the White House labeled as tax increases. The White House continues to hold a blanket policy of no new or increased taxes. President Bush is threatening to veto any legislation that crosses his desk with a tax increase. The House voted this week, 400-11, to instruct its conferees to oppose any new spending that would require tax increases, hoping to move the debate along quickly. Harkin and other Senate leaders had postponed the Farm Bill conference until they could come to an agreement with the Administration.
No agreement is in place, but conferees do not have the luxury of waiting any longer, since the current Farm Bill extension runs out on Friday, April 18. After grudgingly agreeing to the last extension, President Bush said he would not sign another extension, hoping to force legislators to move forward on a Farm Bill that he could sign. Last week, however, The White House pulled back, stating that it would allow another short extension if Congress showed considerable progress by April 18. With the hope of meeting those criteria, Harkin and other conferees met this week.
While Harkin and his Senate colleagues are not in support of the House’s scaled-back proposal, they do believe it can act as a springboard to a final agreement, which would lie somewhere between the $5.5 and $10 billion above baseline proposals. The House proposal includes the Fresh Fruit and Vegetable Program (FFVP) expansion, and lists an overall funding level of $9.5 billion for nutrition programs, but does not give details on how that money will be allocated. Once conferees are able to settle on overall spending levels, they can move on to assigning specific funding levels for the many programs under each title of the Farm Bill. While Sen. Harkin believes they are closer to an agreement than before, he is not optimistic about meeting the April 18 deadline, meaning another short term extension may be in order.
Resources
Catharine Richert, “Senate Conferees Prepare Counteroffer to End Farm Bill Funding Impasse,” CQ Today, April 10, 2008.
Geof Koss, “House Kicks Off Farm Bill Conference With Scaled-Back Spending Offer,” Congress Now, April 10, 2008.
