The public sector, the collection of good and services provided at the local, state, and federal level that all residents of the United States are able to enjoy collectively, does not belong to anyone. However, the public sector must be funded through various governmental means, including tax dollars, fees, and funding allocated by various sectors of government. In the case of the federal government, where the fiscal year runs from October 1 to September 30 of the following year, many Executive agencies and programs rely on annual discretionary funding appropriations made by Congress. As the summer months wane and Congress moves closer to passing legislation so that the federal government may continue to operate smoothly moving into the upcoming fiscal year, federal appropriations tend to dominate the news.
This post will discuss the appropriations process, including the role of Congress, and how it pertains to higher education funding for fiscal year 2019 (FY19), which starts October 1, 2018. If you are interested in learning more about the federal budget, of which appropriations is just a part, you can check out NASPA’s April 2017 blogpost “Federal Budget Update for Student Affairs Professionals” by director of policy research and advocacy, Teri Lyn Hinds.
Why All the News Coverage? Federal Appropriations and the Risk of a Government Shutdown
If Congress is unable to reach an agreement between the House and the Senate, and produce appropriations legislation that the President is willing to sign, a government shutdown may occur. Federal agencies operate under contingency plans coordinated through the Office of Management and Budget (OMB) in the case that a shutdown might occur under which only “essential services” will be allowed to function until funding legislation is signed into law. While Congress is often seen at risk of entering a government shutdown, a compromise is typically reached before the end of the fiscal year either in the form of an omnibus spending bill, which combines all 12 of the appropriations bills into one large package, or a temporary continuing resolution (CR), which act as stop-gap measures to fund the government until a permanent solution can be reached. There have only been a handful of times in which a funding gap has resulted in massive federal employee furloughs over the last forty years. Regardless, a funding gap of any measure, is disruptive to the work of the government and interrupts the delivery of services to the public. According to the OMB, the last major shutdown, which occurred for 16 days in 2013, resulted in the loss of $2-6 billion in national economic output.
Last year, Congress avoided shutdowns by passing a number of CRs. While CRs avoid a shutdown, they are a costly compromise that lead to inefficient spending as a result of continuing to delay consideration of the spending needs carefully evaluated and submitted by government agencies. However, because they are seen as “must pass” legislation, CRs hold the power to push forward policy issues on which Congress cannot come to an agreement through the inclusion of provisions known as policy “riders.”
In relation, last year, immigration policy became closely tied to the passage of appropriations legislation. The announcement from President Trump on September 5, 2017 that the Deferred Action for Childhood Arrivals (DACA) program would be set to expire after a six month rollback plan, placed an onus and urgency on Congress to take up the issue. Congressional Democrats leveraged upcoming CR deadlines as a strategic move to bring immigration legislation to the floor for a vote. After experiencing a three day government shutdown following a Democratic filibuster in January 2018, and a five hour shutdown in February 2018 the strategy allowed for a floor vote in the Senate on immigration. Ultimately all of the measures considered, which included stringent increases to immigration enforcement alongside protection measures for DACA recipients, were unable to pass. NASPA’s 2018 Immigration and the Higher Education Community Background Brief provides some helpful additional context on DACA, and NASPA’s weekly policy update consistently includes pertinent coverage as well.
The FY18 budget was finally passed in March 2018 through the Consolidated Appropriations Act. The FY18 omnibus appropriations bill bolstered funding for both student aid and scientific research. NASPA joined a statement submitted to Congressional leadership by the American Council on Education (ACE) applauding the government’s commitment to the higher education community in recognition of this support.
Omni-What? Appropriations Consolidation and Fiscal Year 2019
While the FY18 budget was not finalized until the passage of the omnibus spending package in March, the House got so far as to pass their own omnibus bill, H.R. 3354 in September 2017. The combination of appropriations bills into a single large omnibus bill is a strategic move by a chamber of Congress to increase the likelihood of passage with as much negotiation time as possible and limiting debate on each of the bills separately. The Senate attempted to pass each of their 12 appropriations bills separately, which contributed to running out of time to consider and pass all 12 before their September 30 deadline.
In April 2018, House Chief Deputy Whip Patrick T. McHenry (R-NC) indicated that the summer months would likely bring another round of strategic spending bill packaging for FY19. “Taking 12 across the House floor and expecting the Senate to do the same, I don’t have high hopes for that to happen,” he mentioned in an interview by CQ Roll Call. To better ensure passage, bills that require substantial negotiation may also be combined into “minibus” packages. Both the House and the Senate have taken up the minibus strategy this past summer in an attempt to pass an appropriations funding package before September 30.
Higher education funding, for example, which is largely included in the Labor-HHS-Education spending bill (Labor-H), has been combined with defense funding to create one Labor-H-Defense minibus package. By the end of June 2018, the Senate Appropriations Committee had approved a bipartisan FY19 Labor-H spending bill (S. 3158) which would expand funding for a number of educational programs including the Pell Grant program. The Labor-H bill passed by the Senate would increase funding to the Education Department by $541 million, bringing total funding to $71.4 billion. Next, as mentioned above, the Senate combined their Labor-H bill with the Defense appropriations bill. The House, whose $177.1 billion FY19 Labor-H bill (H.R. 6157) passed out of the House Appropriations Committee in July 2018, returned from summer recess on September 4, 2018, and began conference negotiations with the Senate to reconcile differences in their versions of the bill. On September 13, the House and Senate were able to reach an agreement in passing the Labor-H-Defense bill free of divisive policy riders.
According to Politico’s recent (subscription required) Datapoint report on FY19 appropriations, the Labor-H –Defense was possiblythe most difficult for the House and Senate to negotiate of the three minibus bills on the table. The House’s original version of the bill included a series of rescissions and adjustments that brought it down $13.8 billion below the Senate’s, and as the National Association of Student Financial Aid Associations (NASFAA) noted, sought to level-fund all federal student aid programming aside from TRIO and GEAR UP.
Therefore, the agreement reached today proves promising. At this point, two of the three minibus bills have passed. Congress seems more eager than ever to reach a compromise given upcoming midterm elections, and the impending risk of losing party control in both the House and the Senate. While it looks like Congress is coming close to meeting their deadline, the likelihood of Trump to sign onto the spending packages remains uncertain. A signature from President Trump on a comprehensive spending package prior to September 30 would indicate a level of Congressional efficiency unprecedented in this administrative cycle.
Finally, while appropriations is an important indicator of how program funding may be allocated within the Department of Education (ED), authorization through the Higher Education Act, and the passage of budget resolutions also affect this process. Look for future posts, briefings, and tools as NASPA’s Policy and Advocacy Team continues to track legislation on the allocation of federal dollars and draw implications of potential impacts to higher education funding.
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