The U.S. House of Representatives approved a historically huge $819 billion stimulus bill on Jan. 28 that includes some $142 billion for education as part of the Obama administration’s plan to revive a badly ailing economy. The vote was 244-188, with Republicans unanimous in opposition despite the president’s frequent pleas for bipartisan support.
Some $20 billion for school modernization and $1 billion for educational technology are included in the bill, which also sets aside money for schools and colleges to shield them from the effects of state cutbacks in services, as well as tax credits designed to make college more affordable.
"This recovery plan will save or create more than three million new jobs over the next few years," President Obama said in a written statement released moments after the House voted. Still later, he welcomed congressional leaders of both parties to the White House for drinks as he continued to lobby for the legislation.
The vote sent the bill to the Senate, where debate could begin as early as Feb. 2 on a more bipartisan, and costlier, companion measure already taking shape. Democratic leaders have pledged to have legislation ready for Obama’s signature by mid-February.
That could prove difficult, however, because there are differences between the House and Senate versions that must be ironed out.
The day before the House vote, the Senate Appropriations Committee approved the Senate version of the bill over Republican protests that it contained too much spending. Siding with Democrats on the committee in approving the measure were Republican Sens. Thad Cochran of Mississippi, Arlen Specter of Pennsylvania, Christopher Bond of Missouri, and Susan Collins of Maine.
Despite Republican protests, the Senate version includes a higher percentage of tax cuts than the House bill. It calls for $366 billion in stimulus spending within a total package that could approach or exceed $900 billion.
The House bill includes an estimated $544 billion in federal spending and $275 billion in tax cuts for individuals and businesses. These totals remained in flux nearly until the final vote, owing to official re-estimates and a last-minute addition of $3 billion for mass transit.
Both the Senate and House versions of the stimulus package would supply about $20 billion for school infrastructure improvements, though the funding would be apportioned differently: K-12 schools would get $14 billion and colleges $6 billion in the House version, while the Senate version allocates $16 billion for K-12 schools and $3.5 billion for colleges. The House version also sets aside another $1 billion for educational technology, while the Senate version includes ed-tech funding as part of the infrastructure line item.
There are also differences in Pell Grant funding ($15.6 billion in the House version, $13.9 billion in the Senate version) and support for broadband deployment ($6 billion in the House bill, $9 billion in the Senate bill) to be worked out, among other discrepancies.
Both measures include $79 billion in state fiscal relief to prevent cutbacks to key educational services, including $39 billion to local school districts and public colleges and universities using existing formulas, $15 billion to states as bonus grants for meeting key performance measures, and $25 billion to states for other high-priority needs, such as preventing the layoffs of public safety employees and teachers.
Both versions also propose to temporarily enhance the Hope tax credit to help more people afford college–a measure that would cost more than $12 billion over 10 years. The tax credit would increase from $1,800 to $2,500, would allow students to claim the credit for four years instead of two, and–for the first time–would qualify students whose families do not make enough money to pay income taxes. The credit would not be available to individuals who earn $80,000 per year, or couples making $160,000.
Efforts to make higher education more affordable were lauded in a comprehensive analysis released Jan. 22 by the Center on Budget and Policy Priorities. The center’s analysis said opening avenues to higher education would be critical as the country looks for a way out of its economic slide.
"When the labor market is weak and many individuals are unable to find work, one of the best long-term investments the nation can make is in upgrading the skills of its workforce," the report said. "The more people who go to college during the downturn and improve their skills, the better positioned the nation will be when the economy rebounds."
The report notes that almost 40 percent of American households–and half of families who have children–earn incomes "too low to owe federal income tax." While some of these families find ways to benefit from the Hope tax credit, "most are not able to benefit at all."
"As a result, the education tax credits do the least for the very students that need them most–the same students who are most likely not to enroll in or complete higher education because they have difficulty affording it," the center’s report said.
The report also criticized lawmakers’ funding of the Pell Grant program as not enough to meet current needs. Even with an influx of $15 billion, "the overwhelming majority of low-income college students would continue to have significant unmet financial need," according to the analysis.
With unemployment at its highest level in a quarter-century, the banking industry wobbling despite the infusion of staggering sums of bailout money, and states struggling with budget crises, House Democrats said the legislation was desperately needed.
"Another week that we delay is another 100,000 or more people unemployed. I don’t think we want that on our consciences," said Rep. David Obey, D-Wis., chairman of the House Appropriations Committee and one of the leading architects of the legislation.
In voting against the measure, House Republicans said the bill was short on tax cuts, contained too much spending–much of it wasteful–and would fall far short of administration’s predictions of job creation.
The party’s leader, Rep. John Boehner of Ohio, said the measure "won’t create many jobs, but it will create plenty of programs and projects through slow-moving government spending." A GOP alternative, consisting almost entirely of tax cuts, was defeated, 266-170.
On the final vote, the legislation drew the support of all but 11 Democrats, while all Republicans opposed it.
Passage of the stimulus package would more than double the Education Department’s budget, from $60 billion in fiscal year 2008 to more than $142 billion in fiscal 2010. Education Secretary Arne Duncan said Jan. 27 that the bolstered budget–which would see a $6 billion jump in Title I funding, aimed at educating low-income students–would save thousands of teachers layoffs that districts could soon be forced to make.
Republican critics of the plan say it’s not a short-term boost but an immense expansion to federal education funding that will be impossible to roll back.
"It’ll never go away," said Oklahoma Sen. Tom Coburn, a Republican on the Senate Health, Education, Labor and Pensions Committee. "You’re talking about a permanent increase at a time when we are in the worst financial shape we’ve ever been in."
"What will happen two years from now when the Democrat spending spree comes to an end?" asked California Rep. Howard "Buck" McKeon, top Republican on the House Education and Labor Committee.
Republicans can only imagine the pressure they will face, once education spending goes up, to keep it that way. Democrats say that is an argument for another day.
"At the moment, my interest is in rebuilding the economy," said Rep. George Miller, chairman of the House education committee.
State governments are making dramatic cuts to education as revenue from sales and property taxes plummet, said Miller, D-Calif. Class sizes are set to rise, he said, and hundreds of thousands of teachers have gotten layoff notices.
"This is two-year money," Miller said. "As their revenue base is restored, as sales taxes start to grow, if the economy recovers and home values start to stabilize, [schools] will have to transition to return to reliance on that. But it’s clearly not in the national interest to have this system collapse at this moment in time."
Editor’s note: See the "Links" section for a complete breakdown of economic stimulus money reserved for states, released by the House Committee on Education and Labor.