To the Relief of Academe, Deal Is Reached to End Federal Shutdown

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Under the bipartisan deal, reached by Sen. Mitch McConnell of Kentucky (center), the minority leader, and Sen. Harry Reid of Nevada, the majority leader, spending on student aid, research, and other areas would remain flat, at last fiscal year's levels.
October 17, 2013

After weeks of bickering and brinkmanship, Congress has passed legislation to reopen the federal government and raise the nation's borrowing limit, ending an impasse that disrupted research and education, and averting a debt crisis that could have devastated colleges and the economy at large.

The U.S. Senate passed the measure Wednesday evening, and the House of Representatives approved it a few hours later, despite opposition from a majority of that chamber's Republicans. President Obama then signed the bill into law, restoring the flow of federal funds to students and researchers, and allowing the reopening of the National Archives and other government facilities that academic researchers depend on.

Most important, the measure prevents a national default that could have caused interest rates on student loans to soar and spending on student aid and research to slow or even stop.

But the legislation provides only a temporary reprieve, setting the stage for another showdown early next year. In the meantime, spending on student aid and research will remain flat, at last fiscal year's levels.

Much of the federal government closed for business on October 1, after lawmakers failed to reach agreement on a spending bill for the 2014 fiscal year. Conservative lawmakers had insisted that any spending measure repeal, or at least delay, President Obama's signature health-care law and that any increase in the debt ceiling be offset with spending cuts.

The deal rejects those conditions in favor of a mostly "clean" measure sought by Democrats and Mr. Obama. It finances federal agencies through mid-January and extends the nation's borrowing authority through February 7, while setting up budget negotiations between the House and Senate on a 10-year budget blueprint. In a concession to conservatives, the measure strengthens income-verification procedures for government health-care subsidies.

The last-minute agreement came together on the day before the U.S. Treasury said it would reach its legal borrowing limit. If that had happened, the government would have quickly run out of cash, and would have had to pick and choose which bills to pay and which grants to make. Student aid and research grants probably would not have risen to the top of the priority list.

The end of the stalemate came as a relief for researchers who had been shut out of government facilities and had seen their grant applications delayed. It was also good news for members of the military, who hadn't been able to receive tuition-assistance benefits since the shutdown began, and for the Merchant Marine Academy, which had been closed for more than two weeks.

But colleges won't be in the clear despite the shutdown's end. Student-aid and research funds will continue to be squeezed by budget constraints and the next round of the across-the-board "sequester" spending cuts, scheduled to take effect in mid-January. And lawmakers looking for places to cut in their 10-year budget blueprint may find higher education a softer target than the major entitlement programs, warned Neil H. Buchanan, a professor of law at George Washington University and the author of The Debt Ceiling Disasters.

"They're going to find it hard to take whacks at the big programs," like Medicare and Social Security, he said, "so they'll start looking at symbolic ways to cut away at things that are easier."

"Other than football teams," he observed, "universities are not popular with tea-party-type voters."