An Early Test for House Republicans

Republicans swept back into control of the House of Representatives this week on a promise of shrinking the federal government and reducing budget deficits. But in terms of higher education policy, are they willing to face the political fallout that would inevitably accompany any plan to roll back the maximum Pell Grant award?

The new House leadership may not have much time to make up its mind. Here’s why: The current Congress has yet to pass any of the 12 separate fiscal year 2011 appropriations bills that will finance about one-third of the U.S. government over the next year. (Fiscal year 2011 began on October 1, 2010.) Instead, Democratic Congressional leaders decided to bring up the bills in a lame-duck session following the mid-term elections. In the meantime, Congress passed a Continuing Resolution through December 3 that is financing all programs and agencies subject to annual appropriations at fiscal year 2010 levels. Democrats may try to take one last crack at getting these bills done while they still control both branches of Congress, but Republicans have already begun to demand that they back down and simply extend the Continuing Resolution into next year.

If this happens, House Republicans will surely be tempted to push the Senate and the Obama administration to keep the resolution in place for the entire year to avoid any spending increases at least in non-defense programs. But maintaining discretionary spending on Pell Grants at its 2010 level of $17.5 billion would force a substantial reduction in the current maximum award of $5,550 – one credible estimate suggests that grant would fall to $4,670. This is because money from the 2009 stimulus programs helped support the Pell award of $5,550 in fiscal year 2010, but that money will all be used up come fiscal year 2011. So to prevent a cut in the grant, Congress will have to come up with the $17.5 billion plus an additional $5.7 billion.

To be fair, Congressional Democrats have not exactly shown leadership on this issue. As Higher Ed Watch contributor Jason Delisle has reported, Democrats in both the House and the Senate have employed all sorts of budget tricks to try to keep the maximum Pell Grant at its current level without having to provide the money through the regular budget and appropriations process.

We assume that House Republican leaders, who have returned to power on the promise of restoring fiscal discipline in Washington, won’t have any appetite for such gimmicks. So that will leave them with two choices: hold their noses and work with the Obama administration and Senate Democrats to find billions of dollars in additional spending for Pell Grants  or decline to do so and instead propose a significant cut in the maximum award.

As Republican leaders know, the latter option is fraught with political danger. Congress has cut the maximum Pell Grant only once in the last twenty-five years — during the first year of the Clinton administration, when the program was facing a $2 billion shortfall. This reduction, from a maximum grant level of $2,400 to $2,300, came back to bite Clinton, as many supporters had hoped that the self-declared “Education President” and the Democratic-led Congress would revive the program after years of only minimal increases at best during the Reagan and George H.W. Bush administrations.

Meanwhile, Republicans who came to power in 1995 as part of the “Gingrich Revolution” well remember the political damage they sustained when they threatened to cut student aid and raise the cost of federal loans for students and their parents as part of their efforts to balance the federal budget. President Clinton’s success in beating back these proposals helped revive his popularity in time for the 1996 presidential elections.

For the newly-resurgent House Republicans, this is where the rubber meets the road. Will they stick to their guns and risk being accused of trying to “raid student aid” again? Or will they cave and risk the ire of their most fervent supporters and new Tea Party members?  Or perhaps the outgoing Democratic Congress will provide the funding in the lame duck session – but then the Republicans will ultimately face the same dilemma when the fiscal year 2012 budget process begins in earnest early next year.  Of course, the Pell Grant program will require a $33 billion appropriation by then.

Jason Delisle contributed to this post.