AACC Year-End Legislative Update

December 14, 2011

AACC Office of Government Relations and ResearchDavid Baime, Senior Vice President

Jim Hermes, Director

Laurie Quarles, Legislative Associate

AACC Legislative Update

• FY 2012 Funding• Budget Control Act/Deficit “ Super Committee”• Amer ican Jobs Act/Veterans Legislation• Workforce Legislation• TAA CCCT Grant Program• Committee on Measures of Student Success• The Year Ahead

FY 2012 Labor-HHS-Education Appropr iations

• 3 of 12 Appropr iations Bills Enacted• 9 Bills to be Passed in Large Package• Continuing Resolution Expires 12/16• Senate Committee Approved LHHS Bill • House Posted Bill – No Formal Action

Taken• Level Funding for Many Programs

– Perkins CTE programs

Pell Grants

• $10 billion Provided by Budget Control Act for FY 2012– Left $1.3 billion shor tfall to be filled by

appropr iators• House Draft Cuts Total $3.6 billion

– Eliminates eligibility for less-than-halftime and ability-to-benefit students

– Lowers income protection allowances, reducing eligibility

Pell Grants

• House Cuts, cont’d– Cuts eligibility from 18 to 12 full-time semesters– Changes auto-zero EFC from $30 K to $15 K– Counts EITC and other funds as income

Pell Grants

• Senate LHHS Bill Took Much Different Approach– Savings by eliminating student loan interest

subsidy dur ing grace per iod– House Budget Committee ruling later reduced

these savings to $400 million, leaving $900 million to be saved by other means

Workforce Training Funds

• House Bill Slashes WIA Programs by $2.2 Billion, or 75%– Advance funding, which is bulk of WIA

program funding, eliminated– Shift from program year to fiscal year given as

reason– Cuts would be extremely difficult to restore next

year , likely permanent• Senate: Level Funding

Minority Serving Institutions

HEA Title

Type of Minority-Serving Institution

Funded

Funding (in $ millions)

Current Proposed Change

V Hispanic 104.4 17.4 -87.0

III Historically Black 237.0 152.0 -85.0

III Tribal 26.8 0 -26.8

III Alaska Native and Native Hawaiian

13.4 0 -13.4

III Predominantly Black 9.6 0 -9.6

III Asian American/Pacific Islander

3.2 0 -3.2

III Native American, nontribal

3.2 0 -3.2

Totals $397.6 $169.4 -$228.2

Final FY 2012 LHHS Bill

• Deal on Bill Repor tedly Reached, But Not Yet Filed– Dispute over payroll tax holding up spending

bill– One-week CR likely needed

• Pell Grants – Repor ted Cuts– Cuts eligibility from 18 to 12 full-time semesters– Changes auto-zero EFC from $30 K to $20 K– Eliminates eligibility for ATB students

Budget Control Act

• Major Provisions– Federal debt limit raised in stages by $2.1 T– Created 10-year discretionary caps– Provided $17 B for Pell over next two FYs by

eliminating in-school interest subsidies on graduate student loans

– Requires vote on Balanced Budget Constitutional Amendment by 12/31/11

– Established Joint Select Committee on Deficit Reduction— “ Super Committee”

Budget Control Act

• Major Provisions, cont’d– Discretionary caps in FYs 12-21 reduce

spending by $890 billion over 10 years– For FY 2012 and FY 2013, separate spending

caps for secur ity and non-secur ity spending– FY 2012 cap = $1.043 T ($7B below FY 2011 but

$24 B higher than House FY 2012 budget)

BCA Sequestration

• Requires Cuts of $984 billion for Fiscal Years 2013 – 2021– $1.2 tr illion minus $216 in interest savings– $109 billion per year – split evenly between

defense and non-defense– Discretionary funding will exper ience an across

the board cut for FY 2013 – For FYs 2014 – 2021, caps will be lowered and

appropr iators have discretion where to cut

BCA Sequestration

– Mandatory funding subject to across-the-board cuts through 2021

• Complex formula to determine exact amounts, dependent on previous year ’s outlays

– Many programs exempt from sequestration, including Pell Grants (discretionary por tion 2013 only)

– Because of exemptions, roughly 75% of cuts would come from discretionary programs

– Cuts of approximately 15% to discretionary spending from the current baseline

BCA Sequestration

• Sequestration Not Until January 2013, Leaving Congress One Year to “ Fix” Things– Obama vow to veto legislation reducing cuts– Attempts to avoid defense cuts– Fur ther attempts at “ Grand Bargain” ?

Amer ican Jobs Act

• $447 Billion Overall– $253 billion tax credits and cuts– $196 billion spending

• Four Main Sections– Tax cuts for small businesses– Tax cuts and spending to encourage hir ing– Unemployment insurance reform and Pathways

Back to Work fund– Middle class tax relief

Amer ican Jobs Act—CC Facilities

• $5 Billion Proposed in FY 2012 for Community College Modernization and Heavy Equipment

– More Than ½ of AGI Funding

• Funding Awarded to States on Basis of Relative Community College Enrollment

• States Largely Free to Allocate Funds as They See Fit

Amer ican Jobs Act

• Senate Voting on Individual Pieces of Package– Tax credits for hir ing veterans only par t of

package to pass to date• Par t of larger bill that also granted an extra year of

Montgomery GI Bill benefits to older veterans

– All other bills failed to clear filibuster– Vote on school and community college

modernization funds – FAST Act – hoped for next year

WIA Reauthor ization

• House Republican Reauthor ization Bills– H.R. 3610: Consolidates up to 33 job training

programs• Response to GAO repor t

– H.R. 3611: Focus on business engagement• Would extend business major ity on workforce

investment boards

• Collins-McCaskill Payroll Tax Cut Bill– Would require OMB to recommend program

consolidation; half of savings dedicated to deficit reduction.

TAACCCT Grant Program

• First Round Grants– Ranged from $2.5 million to near ly $25 million– DOL still working with some states to finalize

$2.7 million grants– First round heavily favored consor tia grants,

reflecting applicant pool• Second Round Announcement Expected

Next Month• No Imminent Threats to Funding – But Stay

Vigilant!

Committee on Measures of Student Success

• Created by Congress in 2008 HEA Amendments to Review and Suggest Changes to Two-Year Graduation Rate Calculation

• Repor t Submitted to ED Secretary

• Substantial Modifications to Current Calculation Recommended

• ED Will Next Decide How to Implement; IPEDS Route Likeliest

Committee on Measures of Student Success

• Recommendations Include:– Including transfers in completion rate– Adding par t-time students to repor ting in

separate cohor t for par t-time students– Separate cohor t for remedial students– Longer time-frame for tracking

• AACC Has Submitted Comments and Will Work to Influence Implementation

The Year Ahead

• Budget Issues Will Dominate 2012 Congressional Agenda

• Looming Sequestration• Obama Budget• Presidential Election Politics• Bush Tax Cuts Due to Expire in 2012• Broader Economic Developments—Likely to

Rock US• Prone to Br inksmanship

Contact Information

• David Baime– 202-728-0200 x224, dbaime@aacc.nche.edu

• Jim Hermes– 202-728-0200 x216, jhermes@aacc.nche.edu

• Laur ie Quar les– 202-728-0200 x249, lquar les@aacc.nche.edu