Trickle-Down Cuts to Education

The following article by Lisette Partelow, Meg Benner, Michael Dannenberg and Charles Barone was posted on the Center for American Progress website October 26, 2017:

Introduction

After a bruising fight over federal funding for fiscal year 2017 in March and April, Congress has spent the past several months deciding how to fund the government for the upcoming fiscal year. Budget negotiations started in May when the Trump administration released a proposed budget for fiscal year 2018 that included draconian cuts to domestic spending.¹ Under regular order—which has lately become atypical—this would be the start of a budget and appropriations process beginning with the U.S. House of Representatives and Senate budget committees developing budget resolutions. The budget resolutions contain top-line spending numbers and reconciliation instructions and provide a blueprint for the authorizing and appropriations committees, which are responsible for deciding the details of how money is spent across federal programs.²

As has become common in recent years, this year’s budget process has broken down.³As a result, the appropriations committees began developing their FY 2018 bills before budget resolutions were passed.⁴ Because there are so many different proposals currently underway, this paper will focus primarily on Trump’s budget request as an indicator of what the administration’s priorities are and on the House and Senate appropriations bills as an indicator of how Congress intends to allocate federal funding. The House and Senate budget proposals are discussed where appropriate, such as in the context of mandatory programs or reconciliation instructions related to tax reform.

While a final federal budget and spending package—if Congress succeeds in passing one—will likely be more of a melding of the House and Senate bills than any one of the current plans, the Trump administration’s and the House’s proposals demonstrate a clear intent to strip funding from programs that support the health, public education, safety, and well-being of families and children nationwide.

President Trump proposed to cut $9.2 billion from the Department of Education—about one-seventh of its overall budget in FY 2017⁵—thus fulfilling his campaign promise to cut the department “big league.”⁶ While not as severe, the House Committee on Appropriations ultimately passed a bill proposing to reduce the department’s budget by $2.4 billion, cushioned by a $3.9 billion raid of the Pell Grant reserve fund.⁷ Either way, the majority is actively seeking to strip resources from the Department of Education. Raiding student financial aid funds to lessen the blow to current program funding levels only masks the long-term agenda.

Fortunately, the Senate Committee on Appropriations’ Labor, Health and Human Services, Education, and Related Agencies (LHHS) Subcommittee bucked this trend and preserved current program delivery funding levels for education, health care, and workforce training in the bill that its members passed through committee. As with the House of Representatives, however, the subcommittee proposed depleting a college student aid reserve fund to preserve those funding levels.⁸ Because a final spending deal will likely include aspects of all three proposals, the potential immediate and long-term impacts of the cuts in both the administration’s and the House’s proposals are too devastating to ignore.

During hearings to defend the presidential budget request in the Senate,⁹ U.S. Secretary of Education Betsy DeVos said that these cuts represent “tough decisions”¹⁰ but that states can continue to fund K-12 education programs and support services they deem most essential. Unfortunately, and whether she knows it or not, DeVos is being disingenuous.

There is no wiggle room for states to overcome the severe federal education funding decreases that would be the inevitable result of Trump’s proposed budget or the bill passed by the House Appropriations Committee. Education spending has still yet to recover from the Great Recession in many states.¹¹ Because of state constitution balanced-budget provisions, when faced with significant federal funding cuts, states are forced to either further cut education programs or raise taxes.¹² The idea of further raising taxes to backfill Trump’s education funding cuts simply is not practical in states such as Maryland,¹³ Illinois,¹⁴ and New Jersey,¹⁵ which are struggling to fund their current responsibilities.

Just as significant is that the proposed cuts to K-12 education are only the tip of the iceberg when it comes to the potential harm of these budget proposals to public school funding and children. Outside of education, the Trump administration and the House proposed deep cuts to programs that support working families, in areas such as health care, nutrition, affordable housing, and support for children with disabilities. Programs in these areas enable students to come to school ready and able to learn. For example, the full Trump budget—which assumes that the approximately $800 billion in Medicaid cuts that were a part of the failed House bill to repeal the Affordable Care Act are enacted¹⁶—includes an additional $610 billion in cuts over 10 years to Medicaid,¹⁷ a program that provides health coverage to more than 37 million low- and middle-income children,¹⁸ as well as in-school health services to students with disabilities.¹⁹ The House Republican budget resolution goes even further and proposes cutting Medicaid by $1.5 trillion over 10 years.²⁰

Federal funding makes up an average of 31 percent of state budgets, with Massachusetts having the lowest share, at 16 percent, and Mississippi the highest, at 43 percent.²¹ If a portion of this federal funding is eliminated, states would have to reorganize their budgets to allocate additional dollars to support working families. K-12 and higher education combined make up 38 percent of state budgets, the largest category of state spending.²² Consequently, states would likely have to compensate for steep federal cuts to healthcare and other social services by making cuts to education.

What’s more, the proposed direct education and social service cuts are only the beginning of what looks like a long-range plan to defund the public education system at the federal level. By calling for significant tax cuts for corporations and super wealthy families, the Trump administration and the majority in Congress intend to reduce overall federal revenue in future years, making the federal budget even tighter for future discretionary spending.²³

This issue brief discusses in further depth three ways that the current Trump administration’s and Republican House leaders’ proposals would reduce public education funding. First, the authors discuss in some detail the direct cuts to federal education funding proposed by both Trump, with Betsy DeVos, and the House of Representatives, leaving states with little flexibility to meet students’ academic and social needs.  Second, the authors explore the Trump administration’s and the House’s proposals to slash children and families’ basic living standards in areas such as food, housing, and medical care—all of which contribute to children’s success in school. Without federal support, states will have to draw funding from other pots of money, including funding for education, to compensate for these cuts to human services. Finally, the authors highlight how Trump’s tax agenda—with its disproportionate tax cuts for the wealthy—risks larger-than-ever deficits that, in turn, will be used to justify further cuts to public education.

Direct cuts to federal investment in public education

President Trump’s first budget for the Department of Education proposed to cut the department’s total annual budget by a net $9.2 billion,²⁴ or 13.6 percent. The administration achieves this reduction by slashing or eliminating funding for scores of K-12, higher education, and adult literacy programs by even more than $9.2 billion in order to finance massive increases in defense spending coupled with, in the education context, a more than $1 billion allocation for Title I portability programs and private school vouchers.²⁵

The biggest proposed cut to K-12 education in both the Trump-DeVos budget and the House appropriations bill comes from the elimination of the main teacher quality grant program—known as the Supporting Effective Instruction State Grant—which provides funding to defray the cost of recruiting, training, hiring, and developing the country’s 3.1 million public school teachers.²⁶ Notably, the Trump-DeVos budget eliminates the main federal after-school support program—21st Century Community Learning Centers (CCLC)—that provides summer-learning and after-school programs to some 1.6 million children.²⁷ These programs offer a safe environment for academic support and nonacademic enrichment during out-of-school time. The House appropriations bill rejected immediate elimination of 21st CCLC but would cut funding for after-school programs by $91 million.²⁸

While the House Appropriations Committee proposal tempers the president’s proposed cuts somewhat by reducing the department’s overall program budget by $2.4 billion instead of $9.2 billion,²⁹ it follows the lead of the Trump administration in other ways. It includes similar massive cuts to critical programs, including the elimination of grants for teacher professional development and teacher salaries, as well as trimming grants for out-of-school services.

The Senate LHHS Subcommittee bill, on the other hand, proposed increasing the department’s discretionary program spending by $29 million—less than one-tenth of a percent—from the FY 2017 level and maintains current funding levels for the Supporting Effective Instruction State Grant and 21st Century Community Learning Centers.³⁰However, the Senate took some $2.6 billion out of a Pell Grant reserve fund and shifted the bulk of those resources to other priorities outside of college aid and K-12 education.³¹ Even if those funds were not going to be held in reserve for the inevitable increased need to fund Pell Grants in the future, the Senate LHHS Subcommittee chose not to use the funds for other education-related purposes, such as boosting current Pell Grants by $500 each or investing funding in other research-based reforms, such as quality professional development.

Teacher quality

Despite ample research indicating that teachers matter more to student achievement than any other in-school factor,³² both the Trump-DeVos budget and the House appropriations bill proposed eliminating the Supporting Effective Instruction State Grant program, often referred to as Title II grants after the section of the Every Student Succeeds Act (ESSA), a reauthorization of the Elementary and Secondary Education Act, that authorizes the funding.

It is an ironic proposal given that the bipartisan authors of ESSA, signed into law in December 2015, made significant recommended improvements to the main Title II teacher quality program.³³ The new ESSA law ensures more careful targeting of funds to needy areas and children and allows states to leverage the relevant funding in support of an agenda to modernize and elevate the teaching profession.³⁴ The new ESSA law requires states to spend a significant portion of their Title II set-aside funds on implementing innovative teacher pipeline reforms rather than on administration of the program.³⁵ The new ESSA law also, for the first time, permits funding of innovative teacher preparation programs that operate outside traditional schools of education, such as the Relay Graduate School of Education, the Sposato Graduate School of Education’s Match Teacher Residency, and the Urban Teachers program.³⁶ But now, less than two years after ESSA’s passage and before states have had a chance to begin implementing its improvements, the administration and the House have proposed to wipe out the main federal funding line of support for improving teacher quality.

Currently, Title II of ESSA supports teacher residency programs that prepare teachers in shortage subject areas or to teach in high-needs schools; high-quality induction programs; job-embedded professional development focused on continuous improvement of teachers’ skills; and career ladders for accomplished teachers. The Trump-DeVos budget would eliminate federal support for all of these. In FY 2015, California received more than $254 million and Illinois received more than $93 million in Title II teacher quality funds.³⁷ To give those numbers greater meaning, consider that those amounts are sufficient to fund rigorous new teacher professional development programs for an estimated 28,000 new teachers in California and 10,000 in Illinois.³⁸

It is notable that even public charter schools would suffer under Trump and Devos’ proposed cuts to Title II. If one assumes that charter schools get their fair share of Title II funds as per the underlying ESSA statue, ³⁹ with 5 percent of the nation’s students,⁴⁰ they stand to lose $115 million per year under the Trump-Devos budget⁴¹—close to one-third of the amount the federal government invested in the Charter Schools Grants program in FY 2017.⁴² Education Week reports that Eagle Academy Public Charter School in Washington, D.C., for example, receives roughly $82,000 in Title II funding annually.⁴³ Joe Smith, the school’s chief financial officer, states, “If this was taken away from us, that would hurt. I don’t know what the new money [for charter schools in Trump’s budget] is for. But I know what Title II is for. It’s for any school that serves poor children, to help their students.”⁴⁴

After-school programs

The administration and the House Appropriations Committee also proposed elimination or severe cuts, respectively, to the 21st Century Community Learning Centers program.⁴⁵Currently funded with more than $1 billion, this program provides enrichment opportunities in safe environments to more than 1.6 million students per year,⁴⁶ 70 percent of whom are students of color.⁴⁷ Much of this funding supports after-school programs, but 21st CCLC also funds before-school and summer programs.⁴⁸ Research indicates that participation in 21st CCLC is linked to better attitudes toward school, higher rates of school attendance, fewer suspensions, and better performance in school, among other outcomes.⁴⁹ In addition, many of these programs provide students with snacks or meals.⁵⁰

Nationwide, the average school day ends two or more hours before the end of a normal workday.⁵¹ These after-school hours coincide with the 3 p.m. to 7 p.m. time period in which one-fifth of all juvenile crimes occur.⁵² The proposed after-school program cuts would present working parents with an untenable choice: accept unsafe or unregulated after-school care options, reduce their working hours to care for their children, or quit their jobs entirely.

The Trump-DeVos budget would zero out all federal funding for this program, and the House appropriations bill would reduce the program by $91 million dollars—which would affect services for thousands of children across the country.⁵³

If these cuts were enacted, states would have to either backfill the loss of federal support for out-of-school care by drawing from other limited funding streams or accept that previously served students would now be in unsafe, unsupervised environments outside of school hours.⁵⁴ Attendance, student achievement, and peer and student-to-teacher relations could suffer.⁵⁵ States that cut after-school programs would likely have to allocate additional dollars in future years to triage the loss of jobs or depressed student outcomes. The proposed after-school cut should be viewed at best as penny-wise and pound-foolish.

Higher education funding

The cuts proposed by the administration and the congressional appropriations committees affect K-12 and higher education differently—the latter in a more opaque way. The Department of Education allocates the majority of funding for elementary and secondary education to states and districts directly, but many of the cuts to higher education are to federal funding allocated directly to students or institutions. The cuts to college affordability and access programs will not directly affect state spending, but they will surely have a detrimental effect on college access, student outcomes, and career potential.

The Trump-DeVos budget and the House Appropriation Committee bill raid student aid programs—including the federal Pell Grant reserve, which the federal government slowly established after an inadequate rainy day fund led to painful cuts⁵⁶ to the program—by $3.9 billion and $3.3 billion, respectively.⁵⁷ The Pell Grant is the fundamental building block of financial aid support for low-income students. The total demand for and resulting cost of the Pell Grant program grew exponentially between 2007 and 2011 as a result of more Americans enrolling in college and lower family incomes during the Great Recession.⁵⁸ In 2011, to compensate for an inadequate reserve to fund the growing demand of Pell Grants, Congress cut year-round Pell Grant eligibility, which was restored this year, and eliminated graduate student subsidized loans.⁵⁹ This affected the student aid packages of students nationwide.⁶⁰ By cutting the Pell Grant reserve, President Trump and Secretary DeVos risk the ability to fund future upticks in Pell Grant demand, thereby requiring either future reductions to eligibility, lower awards, or cuts to other education programs. In other words, Trump, DeVos, and the House majority would set up the Pell Grant program to act as a hatchet against other discretionary domestic spending in future years—again.⁶¹

The Senate LHHS appropriations bill proposes a 1.7 percent increase in the maximum value of the Pell Grant but also reduces the program’s reserves by $2.6 billion and redirects the dollars to other priorities of K-12 and higher education. If the $2.6 billion were used to increase Pell Grant awards, that amount would fund a near $500 increase in the maximum award, as opposed to the modest 1.7 percent increase proposed by the Senate LHHS committee.⁶² The Senate’s proposed 1.7 percent increase to the maximum Pell Grant value is a modest step forward in college affordability, but withdrawing any funds from the reserve threatens the sustainability of the program.⁶³ Sen. Roy Blunt (R-MO) and Sen. Patty Murray (D-WA), chairman and ranking member of the Senate LHHS Subcommittee, respectively, say they are committed to trying to increase discretionary funding levels for the program in order to protect the program’s reserve; in the tense fiscal environment, however, and given the administration’s and the House’s proposals to eat into the reserves even more, it is highly important that Congress add new discretionary funding to at least maintain future program stability.⁶⁴ Every penny carefully accumulated in the Pell Grant reserve should go toward increasing college access, affordability, and success.

Regardless, all of these direct cuts to federal education programs are just the beginning. Many of Trump’s proposed cuts to programs outside of the Department of Education put additional strain on states and districts to meet the needs of students and schools with substantially less funding.

Cuts to noneducation programs would affect students and schools

Educators—including those in private schools that may benefit from the Trump-DeVos and House budgets—should consider that the president and House Republican leaders would not only defund Department of Education programs; they also want to strip states of funding for vital programs that serve low- and middle-income families, including Medicaid, affordable housing, food and nutrition assistance, job training, heating assistance, and economic development in cities and rural areas.⁶⁵ If their vision were realized, more kids would come to school in poverty, with unmet health needs and nutritional deficiencies, from unstable housing situations.

The proposed cuts to Medicaid in both the Trump budget and, in particular, the House Republican budget resolution would have a distinct effect on schools. Thanks to fierce advocacy from the resistance, the majority congressional leadership’s plan to repeal and replace the Affordable Care Act has failed to date, but in order to hold off further attempts to strip affordable health care from millions of Americans, advocates should assess and reflect on the likely impact those proposals would have if passed. In violation of his promise to protect Medicaid, the president has proposed slashing Medicaid by $610 billion over 10 years.⁶⁶ The House budget resolution, which assumes that attempts to repeal and replace the Affordable Care Act succeed, proposed to cut Medicaid and other health care programs by $1.5 trillion dollars over 10 years.⁶⁷ Years of research indicate that access to health care has a positive impact on academic outcomes, suggesting that under the House Republican budget, schools would face an uphill battle to advance student achievement.⁶⁸ Even in families in which children remain insured, rolling back the coverage expansions achieved by the Affordable Care Act means fewer insured parents, and parents’ health coverage is essential for children’s health and financial stability.⁶⁹

Moreover, advocates should keep in mind that school districts in participating states access Medicaid dollars directly to pay for medically necessary services for students with disabilities.⁷⁰ The Individuals with Disabilities Education Act requires that districts provide all necessary services and resources to afford every child a “free appropriate public education,” and some medically related supports qualify for Medicaid reimbursement.⁷¹ With less Medicaid funding statewide to meet that guarantee, states and districts would have to siphon money from other education funding streams to afford necessary medical services that support the learning of students with disabilities.

Additionally, a recent issue brief by the Center for American Progress highlighted that many states cut education funding to make up for budget shortfalls caused by federal Medicaid cuts.⁷² Funding streams for higher education saw the deepest cuts, but most states also cut K-12 education.⁷³ It is likely that many states would make similar decisions if the proposed cuts are realized.

Beyond Medicaid, the administration and the House have proposed deep funding cuts to working families’ health, safety, and pocketbooks that will in turn affect available state funding for education. For example, the Trump budget would cut the Supplemental Nutrition Assistance Program (SNAP), which provides nutrition assistance to struggling families, by $193 billion, or 29 percent.⁷⁴ Similarly, the House criticized the growth of SNAP in previous House budgets over the past 15 years⁷⁵ and is likely to convert the program to a block grant which would provide states with insufficient funding to meet families’ needs.⁷⁶ The Trump budget also proposed cutting or outright eliminating affordable housing programs;⁷⁷ Temporary Assistance for Needy Families, which provides short-term income assistance and work programs for families in poverty;⁷⁸ and the Low Income Home Energy Assistance Program,⁷⁹ which prevents low-income households from living in the bitter cold—and the list goes on. Unfortunately, Congress will likely include aspects of the administration’s proposal in the final budget.

While the impact of these cuts on low-income families is clear, it is important to note that these programs also help states serve far more middle-income families than many realize. Programs such as Medicaid help many middle-income families pay for nursing homes for aging parents, services for children with disabilities, and home health aides for long-term care, helping them to avoid bankruptcy or poverty when caring for a loved one. And nearly half of all Americans will experience at least one year of poverty or near poverty during their working years,⁸⁰ which means that the programs Trump intends to slash are often used by middle-class families. In fact, those who live in predominantly white, rural counties and voted for Trump are particularly likely to need temporary access to these services because they are 24 percent more likely to be living paycheck to paycheck than their urban counterparts.⁸¹ 

Proposed cuts will pave the way for even deeper education cuts in the future

While Congress has yet to finalize the specifics of the FY 2018 budget, the intent of the Trump administration and the House is clear. Elements of their proposed budgets would have devastating impacts on families and children. But their broader policy agenda would lead to even more insidious education funding cuts in the future. Republican leaders in Congress have a well-worn playbook when it comes to addressing taxes and government spending, dubbed “starve the beast.”⁸² First come large tax cuts that significantly reduce government revenue overall, inevitably leading to deficits. Then, to address these needless deficits, the majority calls for major deficit reduction, including through severe cuts to government spending in order to remedy their self-inflicted problem.

While few will be transparent about employing this tactic in real time, a number of conservative economists, Milton Friedman for example,⁸³ intellectuals, such as Irving Kristol,⁸⁴ and politicians, such as President Ronald Reagan,⁸⁵ have made a clear connection between conservatives’ behavior and their long-run intent. Indeed, the starve-the-beast cycle played out recently in the most politically cynical of ways. In 2001 and 2003, President George W. Bush enacted large tax cuts that substantially increased the national deficit by an estimated 2 percent of gross domestic product (GDP).⁸⁶ Then, when President Barack Obama took office, majority leaders called for immediate spending reductions to minimize the national debt—despite warnings from respected economists that reducing spending before the economy recovered from the 2008 recession would constrict growth.⁸⁷ The majority went so far as to shut down the government in order to try to enforce their preferred spending cuts.⁸⁸

Fast forward to 2017, and the country again has a Republican administration and Republican-led Congress proposing large tax breaks primarily for the super wealthy that would significantly increase the deficit.⁸⁹ While some anti-deficit conservative voices have remained consistent by criticizing the impact of Trump’s tax plan on deficits, many have ignored the inevitable effects of the proposed cuts on the national debt.⁹⁰

A closer look at the Trump tax plan

The starve-the-beast tactic has a sequenced and disproportionate impact on struggling families and education programs.

First, consider the effect of tax cuts. Congressional Republican leaders often claim that their proposed tax cuts would be widely enjoyed.⁹¹ However, previously enacted and currently proposed cuts have an unequal benefit for high-income households.⁹² For example, as a presidential candidate, Trump proposed three tax benefits to defray the cost of child care, but 70 percent of those benefits would go to families earning $100,000 or more annually.⁹³ CAP estimates that the deduction would provide only $5.55 per year in additional benefits for a typical family of four in the struggling areas that swung the election in Trump’s favor,⁹⁴ while dishing out $7,329 in tax breaks for higher-income families living in the Manhattan neighborhood that Ivanka Trump used to call home.⁹⁵According to one analysis, Trump’s full tax proposal would actually increase taxes for 26 million low- and middle-income individuals,⁹⁶ while handing out $317,000 per year to the richest 1 percent of households.⁹⁷

Second, consider that to make up for the growing deficit as a result of tax cuts, Republicans in Congress typically propose disproportionate cuts to nondefense discretionary⁹⁸ (NDD) funding, which accounts for much of federal education funding. Since NDD funding is a relatively small portion of the budget—only 16 percent in FY 2016—cuts to this account often must be particularly drastic in order to make a dent in the full federal budget.⁹⁹

Indeed, the majority has called in the past for a cut of $1 trillion in NDD funding.¹⁰⁰ At the federal level, NDD spending is poised to be at its lowest, as a percent of GDP, since 1962, the lowest point on record.¹⁰¹ With states still struggling to stabilize their budgets after the 2008 recession, a deep cut in NDD would halt positive momentum toward recovery. This, in turn, would reduce inflows of tax revenue to states, leading to further cuts in state education spending.¹⁰²

In other words, the Trump administration and congressional Republican budgets would set in motion a death spiral for public education. Call it trickle-down education or call it a Trojan horse for privatizing public education. The effect is the same.

Conclusion

Secretary of Education Betsy DeVos claimed that President Donald Trump’s proposed cuts to the budget for the Department of Education would allow states flexibility to fund the programs most important to their residents. However, with such deep cuts to so many vital programs, the authors’ analysis indicates that states would have little choice but to eliminate long-standing education programs and services to students and schools. Cuts proposed by the Trump administration and the House Appropriations Committee would undermine the nation’s public education system by providing states with inadequate resources to meet the basic needs of children and families—be they hard-pressed middle-class families or families in poverty. And down the road, these families are likely to see even more cuts to services to finance huge tax cuts for the wealthy.

There is no reason to expect President Trump and Secretary DeVos’ version of trickle-down education cuts to be successful in doing anything other than undermining public education as we know it.

Lisette Partelow is the director of K-12 Strategic Initiatives at the Center for American Progress. Meg Benner is a senior consultant at the Center. Michael Dannenberg is the director of strategic initiatives for policy at Education Reform Now, the think tank arm of the advocacy group Democrats for Education Reform. Charlie Barone is the director of policy of at Education Reform Now.

Endnotes