Impact of Budget Control Act Across-the-Board Reductions

The Budget Control Act mandates automatic spending cuts (sequestration) for certain discretionary spending programs if Congress is unable to enact $1.2 trillion in budget savings over ten years by Jan. 15, 2012.  The Congressional Budget Office estimates that nonexempt, discretionary programs would be reduced by 7.8 percent in fiscal year 2013 if a Joint Select Committee on Deficit Reduction is unable to agree on legislation to create $1.2 trillion in budget savings or if Congress is unable to approve the committee's bill.

The National Education Association (NEA) has created a chart to illustrate the impact of this 7.8 percent across-the-board reduction to nonexempt federal education programs in 2013. The table below shows the NEA' s estimates for the major student aid programs based on current funding levels. Overall, funding for the U.S. Department of Education would be reduced by $3.54 billion in 2013 if this provision is enacted.

Program 
Funding Cut 
(in millions) 
Students  
Impacted 
Pell Grants  exempt ---
FSEOG $57.4 1.3 million
Federal Work-Study $76.3 713,100
Federal TRIO Programs $64.5 65,600
GEAR UP $23.6 59,000
Total  $221.8