Cardona Takes Aim at House GOP Debt Limit Proposal

By Hugh T. Ferguson, NASFAA Managing Editor

As House Republicans move this week to shore up votes on their debt limit legislation, Education Secretary Miguel Cardona is urging lawmakers to abandon the proposal, arguing that the budget cuts could impose a potentially “grim reality” for the future of education funding.

Cardona said in a call with reporters on Tuesday that the education system as a whole is faced with a moment of truth, where policymakers can either invest in students, or embrace “recklessness” and prioritize extreme politics over practical policies.

“Speaker Kevin McCarthy is willing to force a catastrophic default and plunge America into recession,” Cardona said of the plan to raise the debt ceiling in exchange for cutting discretionary spending to the fiscal year 2022 level. Spending increases over the next decade would be capped at 1% annually under the proposal.

Although McCarthy’s bill does not specify agency- or program-level cuts, Republicans have said that their budget proposal would not reduce defense spending. Under that assumption, the White House estimates that lowering fiscal year 2024 topline levels for non-defense funding to fiscal year 2022 levels would result in a roughly 22% cut.

Shalanda Young, director of the Office of Management and Budget, said last week that the bill is “vague by design.”

“But that doesn’t obscure the fact that it will force devastating cuts that will hurt millions of people, damage our economy, and undermine our national security,” Young said.

Cardona on Tuesday specifically took issue with the plan’s efforts to halt the administration’s student debt agenda by prohibiting the Department of Education (ED) from carrying out its debt cancellation program currently being considered by the United States Supreme Court, block the administration's proposed income-driven repayment plan, and permanently prevent the department from issuing regulations that would increase costs associated with the student loan program.

“His plan would also prevent millions of student loan borrowers, including 83,000 that he represents in his own district, from getting the breathing room they need as they recover from the pandemic and prepare to enter repayment,” Cardona said of McCarthy’s effort to block the one-time student loan debt cancellation program.

In detailing the potential impact of the House GOP proposal, Cardona reiterated what the cuts would mean for the Pell Grant program and how a potential 22% cut could impact future students. ED also unveiled a new fact sheet on Tuesday outlining the projected impact the GOP bill could have on education.

“Congressional Republicans are willing to dash young people's dreams of a college degree by eliminating Pell Grants, another thing that was supported in bipartisan fashion, but they're willing to eliminate Pell Grant funding for 80,000 students from low income backgrounds,” Cardona said. “Imagine being one of those 80,000 students, imagine beating the odds and winning admission to a great college only to find out that your grant was cut. It doesn't exist anymore.”

Cardona further highlighted what he called the “stark contrast” between the administration's priorities to those of House Republicans.

“Unlike the tax cuts for corporations and the super rich that Speaker McCarthy supported in 2018, research has shown that Pell Grants actually paid for themselves by generating higher income and greater tax revenue,” Cardona said.

If the legislation passes the House this week it will not be taken up by the Democratic-controlled Senate, where even some Republican members are voicing concerns over another debt ceiling vote being pushed to an election year.

With President Joe Biden formally launching his presidential reelection campaign on Tuesday, the administration is ramping up efforts to advocate for its fiscal year 2024 budget proposal — which would boost funding for ED by 13.6%, and increase the maximum Pell Grant award by $820 — to contrast Biden with Republicans.

“Speaker McCarthy's proposal tells us everything we need to know about what he and the Republicans like him value,” Cardona said. “Tax cuts for the super rich, special interest and big corporations over supporting working families and their children.”

 

Publication Date: 4/26/2023


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