Senate Democrats Shortchange the Pell Grant

While many people were on summer vacation, Senate Democrats were hard at work trying to cover up an embarrassing decision they’ve made about the Pell Grant program. After finally giving up on the formal budget process in June, Democrats on the Senate Appropriations Committee adopted a set of self-imposed spending limits to govern the fiscal year 2011 appropriations bills. Almost immediately thereafter, they then began looking for ways to get around their self-imposed spending cap of $169.6 billion for the Labor-Health and Human Services-Education funding bill and came up with a half-baked idea to hide the cost of the Pell Grant program.

When the Senate Appropriations Committee adopted the fiscal year 2011 Labor-Health and Human Services-Education funding bill in July, the committee’s majority chose not to include enough funding to maintain the current maximum grant of $5,550 in the 2011-12 academic year. Earlier this year, the Congressional Budget Office (CBO) said that the fiscal year 2011 appropriations bill would need to provide at least $23.2 billion to support that grant amount. But Democrats ignored the estimate, shortchanging Pell Grants by $5.5 billion (providing only $17.7 billion) and redirecting that money to fund other programs to make it look like the overall bill would fit under the $169.6 billion spending cap. Since students getting lower Pell Grants next school year would be an unpopular budgeting decision, the bill’s sponsors attempted to cover up the funding problem.

The bill’s sponsors were clearly worried that the non-partisan CBO might make their attempted cover-up a pointless gimmick by reporting that the provided funding would not support a maximum Pell Grant at that level. Under a budget rule adopted by Congress in 2005, CBO and both the House and Senate must treat an appropriations bill funding Pell Grants as if it spends what it actually costs. In this case, $23.2 billion. But that would add another $5.5 billion to the appropriations bill that is already at the $169.6 billion limit. So, Senate Democrats included an unprecedented instruction in the bill requiring that CBO ignore the budget rules and disregard any discrepancy between what the Pell Grant program will cost and the funding provided in the appropriations bill. The instruction is excerpted below. The “notwithstanding” refers to the 2005 budget rule.

Provided, That, notwithstanding section 406(b) of H. Con. Res. 95 (109th Congress), the amount of new budget authority for the Federal Pell Grant program for fiscal year 2011 counted against this Act shall be equal to the appropriation provided under this heading.

Problem solved, right? Not so fast. It turns out the ploy was completely pointless. CBO can’t ignore a rule adopted jointly by a full vote in the House and Senate until both chambers first vote to override the rule – on a separate bill or resolution. So the cost of the program as determined by CBO stands at $23.2 billion regardless of what amount of funding the bill provides.

The fiscal year 2011 appropriations process is only just starting, and neither the full House nor the Senate has brought the Labor-Health and Human Services-Education funding bill up for debate or votes yet. So Pell Grant funding for fiscal year 2011 is far from finalized, and Democrats on the House appropriations committee appear set to provide the full $23.2 billion for Pell Grants in their version of the bill.

Although the Senate Appropriations Committee’s budget gimmick was a dud, and will have little effect on the final bill, the whole episode raises an important question: Why won’t Senate Democrats make the Pell Grant program a priority over other programs funded through the Labor-Health and Human Services-Education appropriations bill? Of course, Senator Inouye, the chairman of the Senate appropriations committee, would demure, arguing that he plans to make up for the missing funding later in the year on some sort of emergency supplemental appropriations bill. But why not fund the program all at once, instead of through an emergency bill, if we already know what the program costs? College students, the media, and education advocates should all ask the Senators these questions when lawmakers return to Washington next week from their summer recess and resume consideration of the still incomplete fiscal year 2011 education funding bill.