Higher Education and the 110^th Congress:
Political Changes Shorten Shelf-Life of Conventional Wisdom

By Terry W. Hartle and William C. Parsons

The 2006 elections dramatically altered the political landscape in Washington D.C.  For the first time since 1994, Democrats control both the House and Senate and will be in a strong position to shape the nation’s public policy agenda.

Yet the political environment is still fraught with problems. The increasingly unpopular war in Iraq is -- and will remain -- the most pressing issue facing policymakers.   The chorus of post-election rhetoric heralding a new spirit of bipartisanship has already begun to fray.  And the federal government continues to grapple with sizeable budget deficits that will invariably limit significant new investment in domestic priorities.  The Democrats’ commitment to PAYGO budget rules will reinforce this limitation, as all new future spending will have to be offset by specific revenue increases or spending cuts from elsewhere in the budget.  Moreover, Democrats are acutely aware that they do not possess veto-proof majorities in either chamber, making cooperation with President Bush a necessity if they are to get anything done.     

This daunting mix of factors doesn’t preclude legislative victories for higher education in the 110^th Congress, but it will make progress on a bold policy agenda that is much harder to achieve.

Six for ’06: Student Loans and Stem Cells Take Center Stage

In an effort to attract voters during the 2006 campaign, House Democrats laid out an agenda they called “Six for ‘06”.  Patterned after the Republicans’ highly successful 1994 “Contract with America,” the Democrats’ “Six for ‘06” agenda included a handful of specific ideas that House Democrats promised they would approve during the first 100 hours of the 110^th Congress - including implementing the 9/11 Commission Report; increasing the minimum wage; permitting the government to negotiate directly with drug companies in the Medicare prescription drug program; and repealing tax breaks for the oil industry in order to fund renewable energy initiatives.  Notably, in an encouraging sign for the higher education community, slashing rates on federally subsidized student loans and expanding stem cell research also made the cut.

Both bills – along with the entire Six in ’06 agenda – have now passed the House of Representatives.  But their fate in the Senate is less clear.

In addition to these ideas, Democrats promised to increase funding for the Pell Grant program and streamline the myriad tax provisions affecting higher education – such as the Hope Tax Credit, the Lifetime Learning Tax Credit and the $4000 “above the line” tax deduction designed to help middle income families finance college.

Significantly increasing the Pell Grant maximum award is obviously a cherished goal for the higher education community. The current maximum grant of $4050 has been frozen for the past five years, during which time it has lost 14 percent of its purchasing power.  Furthermore, Democrats campaigned on a $5100 Pell Grant, and Secretary Spellings’ Commission on the Future of Higher Education recently recommended that the average Pell award be increased to 70% (from 48% in 2004-2005) of the average in-state tuition at public four-year colleges and universities over a five-year period.

These competing pronouncements have now led to a bidding war over the Pell Grant program in the nation’s capital.  On January 31, the House of Representatives passed a 2007 Continuing Resolution (CR) which would increase the maximum Pell award to $4310 in FY 2007.  Earlier this week, the Bush Administration answered with a 2008 Budget that includes a $4600 maximum Pell award in 2008 and a $5400 Pell Grant by 2012. 

To be clear, neither of these proposals has yet been signed into law, and the President’s budget also includes a number of misguided program eliminations – including Perkins Loan cancellations, Supplemental Educational Opportunity Grants (SEOG), and Leveraging Educational Assistance Partnerships (LEAP).  Nevertheless, while the tax committees work on fashioning legislation to streamline higher education tax incentives, prospects seem favorable for a meaningful breakthrough in Pell funding this year.

The new Congress is also likely to take another run at reauthorizing the Higher Education Act, a job that was supposed to be completed in 2004.  Although student loans were re-approved as part of the Higher Education Reconciliation Act of 2005, everything else – Pell Grants, TRIO, Work-Study, GEAR UP, International Education, Title III Institutional Aid, Teacher Preparation, and even Perkins Loans – remains. To date, Congress has approved a series of short term extensions to the Higher Education Act that run through June 30, 2007.   Look for the Senate to move first with a version of its bipartisan legislation from the last Congress.  The House will aim to follow with the goal of conferencing final legislation before the committees’ work gets overtaken by the need to reauthorize No Child Left Behind this year.

Meet the Department of Education

Now that has changed.  Following the release of the Spellings Commission’s Report on the Future of Higher Education, Education Secretary Margaret Spellings has made clear she intends to take a more active role during the final two years of this Administration.  Toward that end, she has identified a number of Commission recommendations for potential action.

Some of these objectives have been enthusiastically applauded by the higher education community – including the importance of increasing need-based student aid, the merit in simplifying the Free Application for Federal Student Aid (FAFSA) and the value in notifying students earlier about financial aid awards to assist families in their planning.  In fact, the Commission’s recommendation to boost the average Pell Grant to 70% of the tuition of the average four-year public college is unmatched for its boldness.

In other cases, the Secretary’s comments have received a more muted response. For example, her effort to overhaul accreditation lacks clarity, and her desire to collect more data from colleges and universities could prove complex, costly, and intrusive.

Just 22 Months Until the Next Election

Then there is the 2008 election. Not since 1952 have we had a presidential sweepstakes without at least one of the candidates being a sitting President or Vice President.  As if to underscore that development, leading political officials began to throw their hats into the ring less than one week after the 2006 voting ended.  Furthermore, narrow Democratic margins in both the House and Senate mean that control of both chambers of Congress will also be up for grabs.

Conclusion

The start of a new Congress is always a tumultuous time, especially when power shifts from one party to another.  It can be hard to predict what will happen from one week to the next, let alone what will occur several months down the road.  Before you know it, there’s a new election.

For higher education and the seventeen million students it serves, the beginning of the 110^th Congress offers reason for hope, cause for concern and a whole lot of wait-and-see.  In Washington, D.C., when public policy choices meet political imperatives in a complex budgetary environment, conventional wisdom has a very short shelf-life.  And that has never been more true than it is today.

Terry Hartle is Senior Vice President for Government and Public Affairs at the American Council on Education.
  Bill Parsons is Associate Director for Government Relations at the American Council on Education.

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