Budget Impasse Continues With New Threat of Cuts
By Charles Dervarics

The four-month stalemate on a 2003 federal education budget could leave many higher education programs at risk of across-the-board budget cuts.

Many programs would face an immediate 2.9 percent across-the-board spending cut if a plan from Senate Republican leaders becomes law. That's because of outside fiscal pressures as well as a goal to give states more flexibility in how to spend federal dollars.

Senate Republicans are trying to chop $10 billion from an education/human services spending bill developed last year when
Democrats controlled the chamber. They also want to provide states with $5 billion in extra money to meet pressing education needs, with few federal restrictions. As a result, leaders are proposing an across-the-board reduction to help meet these objectives.

"We are running a deficit. We are at war," says Sen. Judd Gregg, R-N.H., new chairman of the Senate's education committee, in arguing for spending limits. "We have to reinstitute fiscal discipline in the Congress."

But critics say the $10 billion reductions will hurt students and families. Two major programs, Pell grants and Title I education grants, could lose $1.7 billion alone, says Robert Greenstein of the Center on Budget and Policy Priorities in Washington.

Instead of a freeze or cuts, 43 Senate Democrats also have signed a letter endorsing a $500 increase in the top Pell grant this year. If enacted into law, the neediest students could receive grants of $4,500.

With Republican support, the Senate rejected the Democratic plan and narrowly approved the cuts. But final action is pending.

Meanwhile, the House of Representatives is moving ahead with its own new spending bill with few gains in higher education. The plan from Rep. Ralph Regula, R-Ohio, would maintain the maximum Pell grant at $4,000 for the neediest students. College work/study also would be frozen at $1.01 billion.