News

January 31, 2002

The Bush administration announced on Wednesday that the president will ask Congress to make up for a shortfall in the budget of the Pell Grant program this year by rescinding $1.3-billion from Congressional earmarks and "low-priority programs."

The plan, which was announced at a news conference at the Education Department, pleased lobbyists for colleges and students, who have been pushing lawmakers to include money in this year's budget to make up for the shortfall rather than waiting to do so in 2003. The lobbyists, however, were skeptical that lawmakers would agree to cut pet projects they had included in the budget legislation to benefit their home districts.

In December, Congress approved legislation to increase the maximum Pell Grant by $250, to $4,000, despite objections from the White House Office of Management and Budget, which said that the spending bill did not include enough money to actually raise the maximum award at all. The budget office had argued that the $10.3-billion that Congress provided for Pell Grants would be just enough to cover budget deficits in the program caused by unexpected growth in demand for the grants in 2001.

Lawmakers from both political parties, however, agreed to raise the maximum grant, which they said was possible because spending on Pell Grants is "forward funded," meaning that the $4,000 maximum would not go into effect until the start of the 2002-3 academic year.

President Bush signed the bill into law this month. But at the press conference on Wednesday, William D. Hansen, the deputy U.S. secretary of education, said that Congressional appropriators "had created a serious fiscal problem by disregarding" the budget office's recommendation.

"Congress basically wrote a check for $11.6-billion but only deposited $10.3-billion in the bank to cover it," he said.

Mr. Hansen said that President Bush plans to ask lawmakers to cover the shortfall in the Pell Grant program in the "supplemental" appropriations bill it considers this year. Each year, lawmakers introduce supplemental appropriations bills to provide additional funds for unexpected and emergency expenses that have arisen during the year. Occasionally, lawmakers also rescind funds from spending bills that have already passed to help pay for the emergency items.

Rather than provide new money to cover the shortfall, Mr. Hansen said that the White House will ask Congress to cancel $1.3-billion in spending on earmarks and "low-priority programs" that were included in the 2002 spending bill that finances the Departments of Labor, Health and Human Services, and Education.

According to Education Department officials, the lawmakers will be able to choose from a list of 1,626 earmarked projects that were included in the spending bill and 34 "low-priority programs in the three agencies for which the administration did not request funding." Altogether, Congress provided $2.2-billion for these earmarks and programs, which include after-school, literacy, and teacher-training programs.

Terry W. Hartle, senior vice president for government and public affairs at the American Council on Education, said that the college groups were "delighted that the president had decided to highlight this issue in his budget plan."

He said, however, that he expects Congress "to have reservations about the proposed offsets," considering that lawmakers "have traditionally been very reluctant to redirect earmarks after they have been enacted."

Despite this, the college groups are eager to work with the White House to ensure that the shortfall in the Pell Grant program's budget is covered this year, he said.

The full text of the announcement can be found on The Chronicle of Higher Education chronicle.com.