The Congressional deficit reduction "super committee" announced yesterday that they are unable to agree on how to reduce the federal deficit by $1.2 trillion over the next decade.
“After months of hard work and intense deliberations, we have come to the conclusion today that it will not be possible to make any bipartisan agreement available to the public before the committee's deadline,” said super committee co-chairs Sen. Patty Murray (D-WA) and Rep. Jeb Hensarling (R-TX) in a statement.
The Budget Control Act mandated the super committee to create the $1.2 trillion in budget savings by midnight on Nov. 23. Failure to develop a deficit reduction plan triggers automatic, across-the-board cuts to certain government programs in the 2013 fiscal year (FY). (Check out how these cuts would impact student aid programs.) This gives Congress an entire legislative calendar year—-and election year—-before the automatic cuts (known as sequestration) could go into effect--plenty of time for Congress to pass legislation that would prevent these cuts.
The Congressional Budget Office estimates that sequestration would reduce nonexempt, discretionary spending by 7.8 percent in FY 2013. The National Education Association (NEA) estimates the impact of this 7.8 percent across-the-board reduction to nonexempt federal education programs would reduce funding for the Department of Education by $3.54 billion. Pell Grants would be exempt from funding cuts, but FSEOG, Federal Work-Study, Federal TRIO Programs and GEAR UP would see a total of $221.8 million in cuts, affecting millions of students.
Failure to meet the Nov. 23 deadline revokes all the powers given to the deficit reduction committee to make it easier to pass their debt-reduction package. These powers would have made it easier to pass the committee's deficit reduction plan.
The Budget Control Act created the super committee as part of a package to increase the national debt ceiling. The Budget Control Act also significantly impacted student aid, through the elimination of the in-school interest subsidy for graduate students and the elimination of direct loan repayment incentives. Most of the savings from those two provisions were redirected into the Pell Grant program for FYs 2012-13.
Publication Date: 11/22/2011