Obama-administration officials, proposing a three-year “freeze” on domestic spending to cope with escalating budget deficits, said on Tuesday that the restriction would not affect Pell Grants and largely would spare other education programs.
“Pell Grants will be taken care of within our budget,” Robert L. Nabors, deputy director of the White House Office of Management and Budget, said in a briefing. And program areas that include education and energy research are “at the top of the list” for available money, Mr. Nabors said.
The administration, in the budget recommendation for the 2011 fiscal year that it plans to deliver next week to Congress, would allow no net increase in spending for the next three years for programs that are considered discretionary and outside of national security, Mr. Nabors said.
The freeze is aimed at bringing down a projected federal budget deficit that worsened in the past year as the administration and Congress increased government spending in a bid to end the recession. The Congressional Budget Office, in an annual report issued on Tuesday, said the total federal deficit would reach almost $6-trillion over the next decade.
The federal budget consists of “mandatory” spending on programs such as Social Security and Medicare, in which the government pays out defined benefits, and “discretionary” spending, in which Congress allocates money each year. The proposed three-year freeze on discretionary spending outside of national security would save an estimated $250-billion over the next decade.
The administration, making clear its belief in protecting higher education during tough economic times, announced the general spending freeze only hours after it proposed increasing federal aid for college students who take low-paying jobs after they graduate.
Borrowers with a federally subsidized student loan are currently allowed to make payments on the loan each year that total no more than 15 percent of their discretionary income. The administration on Monday proposed cutting that maximum payment to 10 percent, and allowing those loans to be fully forgiven after 20 years of payments rather than the current 25 years.
‘Underperforming’ Programs Vulnerable
Even with President Obama’s support for education, some individual programs throughout the federal budget will face spending cuts, Mr. Nabors said. He did not reveal specific budget plans for education programs other than Pell Grants, the main federal aid for low-income college students.
“This is not an across-the-board cut,” he said. “We’ve gone line-by-line through the president’s budget, trying to find those programs that aren’t working or aren’t achieving their mission or are of a lower priority.”
College lobbyists said they have been bracing for cutbacks, especially after a year in which Congress provided $100-billion for education programs as part of the $787-billion economic-stimulus package enacted last February.
“It’s not going to be good news in general,” Cynthia A. Littlefield, director of federal relations at the Association of Jesuit Colleges and Universities, said of the budget plan for the 2011 fiscal year. Still, the news this week is some relief, she said, after earlier speculation that Mr. Obama might seek actual cuts in total discretionary spending. “A freeze is better than a 5-percent cut across the board,” Ms. Littlefield said.
Over all, Mr. Obama is expecting the terms of his budget “freeze” to be palatable to members of his own party, Mr. Nabors said. “The liberal criticisms will be somewhat muted,” he said, “when they see the details of what we’re proposing.”
