Lawmakers Clash on Pell Spending at Senate Budget Committee Hearing

Education Secretary Arne Duncan backed the president's Pell Grant proposal that was included in the administration's fiscal year (FY) 2012 budget request before members of the Senate Budget Committee Tuesday.

"The overall goal of our Pell Grant proposal is to protect the $5,550 maximum Pell Grant award and put the program on more sustainable financial footing in 2012 and beyond," Duncan said. "The historic demand for Pell Grants has created a shortfall that we project could reach $20 billion in 2012. The president's budget responds to this challenge by proposing a combination of tough choices to generate savings from Pell Grants and student loan programs and increase discretionary funding."

The president's budget would boost FY2012 discretionary spending for Pell Grants by $5.4 billion above spending levels in the FY2011 continuing resolution (CR) that is set to expire on March 4. The increased funding would bring the total FY2012 discretionary funding for Pell to $28.6 billion. The administration proposes reining in the cost of the Pell Grant program in FY2012 by eliminating the newly enacted "year-round" Pell Grant program that is designed to accelerate a student's time to completion. The president's budget would also eliminate interest subsidies for graduate student loans and direct those savings to the Pell grant program. The administration projects that its proposal -- known as the Pell Grant Protection Act -- would reduce the discretionary need for the Pell Grant program by $100 billion over the next 10 years. Legislative text for the Pell Grant Protection Act has yet to be released.

Senate Budget Committee Chairman Kent Conrad (D-ND) highlighted the challenge that growth of the Pell Grant program presents to Congress.

"The rising cost of college has outpaced the increases in the Pell award," he said. "At the same time, due to the recession and increased demand for Pell grants, as well as changes that we made as to who qualifies, the cost of the program has increased. So, we're paying a smaller share of the cost of college, but the overall cost of the Pell program has increased."

Republicans argued that the administration's proposal does not go far enough to rein in Pell spending.

"In 2008, we provided Pell Grants for 6 million, now we're providing Pell Grants, under your proposal, for 9.6 million, doubling the entire budget and we don't have the money," said the committee's Ranking Republican Sen. Jeff Sessions (R-AL). "You haven't cut Pell Grants. Pell Grants are increasing dramatically."

"That's correct. And they would have increased even more substantially if we didn't make the tough and painful decision to eliminate the two Pell Grants in a year," Duncan responded. "We think this is a responsible way to close the Pell shortfall."

Sessions, who had said he was flabbergasted by Obama's proposed education budget, became visibly frustrated and countered that additional funding doesn't necessarily improve education.

"We are going to fight for spending cuts this week, next week, next month, and next year," he said. "We are going to fight for spending cuts in the Budget Committee, in the Appropriations Committee, and on the Senate floor. We are going to keep fighting for a leaner, more productive government until we have restored confidence in our economy and put this country back on the right path—the path to prosperity."

A recording of this hearing is available on theSenate Budget Committee's website.