As has become customary of Congress, a last-minute deal was made this week just in time to avoid the looming fiscal cliff that not only would have proved disastrous to our economy with a potential recession, but also to education funding from potential across-the-board cuts as a result of sequestration that was due to occur on January 2. However, education and other programs that were in jeopardy are not off the hook-or cliff-yet, since Congress has only agreed to delay sequestration by two months-to March 1-instead of voiding it.

In a deal crafted at the 11th hour mainly by Vice President Joe Biden and Senate Minority Leader Mitch McConnell (R-KY), and approved by the Senate early Tuesday morning and subsequently by the House Tuesday night, Democrats and Republicans agreed to a measure for taxes to go up on household income over $450,000 and $400,000 for individuals but to make permanent tax cuts for income below that level. Congress also agreed to delay sequestration-the across-the-board cuts to all federal discretionary programs, including an 8.2% cut to education-by two months, to March 1, in order to buy time to develop a broader budget agreement. (As a reminder, sequestration is the drastic, across-the-board cuts to education that were scheduled to occur on January 2, 2013. These across-the-board cuts were agreed to as part of the August 2011 Budget Control Act. Congress put this measure of sequestration in place in case a 12-member Congressional committee was unable to approve a plan to reduce another $1.2 trillion from the federal deficit; this committee failed, triggering sequestration. Sequestration would impose the largest education funding cuts ever, chopping funding for programs in the Department of Education by roughly $4 billion, or 8.2%, which would have a devastating impact on state and district budgets.)

The deal also included some “wins” for education programs, such as the extensions of the American Opportunity Tax Credit, which helps families afford college; the Qualified Zone Academy Bond program (more on that here); and a tax credit that helps teachers purchase supplies for their classrooms.

Concerning to education advocates is the knowledge that before March 1, Congress will need to draft new legislation to address sequestration. If sequestration does occur, education funding would not be affected until the 2013-2014 school year, since education is forward-funded by the federal government and this school year’s funds would thus be exempt. However, a few programs would be cut right away (this school year), including the Head Start preschool program for low-income children, and the impact-aid program, which assists districts burdened with additional costs from a large federal presence, such as a military base.

Complicating the federal budget even more in early 2013 is that the federal government is currently funded not through a Fiscal Year 2013 appropriations bill but through a continuing resolution, or a temporary budget that expires in late March. Congress must enact a year-long budget for Fiscal Year 2013 before the continuing resolution expires in order to keep the federal government running. Finally, by February we will hit the federal debt ceiling again, necessitating Congress to pass legislation to be able to borrow more money in order to keep federal agencies and programs intact. Needless to say, Congress has quite a lot on its plate to tackle in the next few months that just have to do with the federal budget.

Because sequestration is still a threat until March 1, NASSP encourages its members to keep the pressure on your legislators and urge them to avoid sequestration. Take one minute to email your legislators using NASSP’s Principal’s Legislative Action Center.

 

1 Response » to “Congress Reaches Last-Minute Deal to Avoid the Fiscal Cliff…For Now”

  1. Peter Mason says:

    Your last post with NASSP. So sad :(

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