House Committee on Education and Labor
U.S. House of Representatives

May 15, 2007

Chairman John Spratt

Committee on the Budget

207 Cannon House Office Building

Washington, DC 20515

Ranking Member Paul Ryan

Committee on the Budget

B71 Cannon House Office Building

Washington, DC 20515

Dear Chairman Spratt and Ranking Member Ryan:

As House and Senate budget negotiators finalize their work on a Fiscal Year 2008 budget conference report, we wanted to express our continued concerns about the inclusion of a small Education and Labor Committee budget reconciliation instruction – an instruction we believe has much less to do with deficit reduction than it has to do with implementing the most dramatic changes to federal higher education policy in history.

As you know, our Committee has established a strong record on matters of deficit reduction.  In the Fiscal Year 2006 budget, the then-Education & the Workforce Committee was tasked with finding more than $12 billion in budget savings over five years – the highest total of any House Committee.  Not only did we find those savings through slashing costly subsidies to student loan lenders, but we also found nearly $8 billion in additional savings, which we translated into new and expanded benefits for ALL college students.  For example, we created two new grant programs for low-income, high-achieving students, increased loan limits, and drastically cut loan fees.  As a result, more financial aid is available to students today than at any time in history.  In short, reconciliation served its deficit reduction purpose – and then some.

Our Committee’s reconciliation instruction in the Fiscal Year 2008 House budget resolution has been viewed by many in a very different light.  To begin, the House-passed instruction of only $75 million over five years pales in comparison to the savings we found for taxpayers in the Fiscal Year 2006 budget process.  This small figure – and the fact that the Education and Labor Committee is the only House panel to have received an instruction – is ample proof that deficit reduction is not an essential focus during this particular round of reconciliation.  Even if the dollar figure is increased into the hundreds of millions – still far less than the savings we generated in the last Congress – the fact remains that this is much less about reducing the deficit than it is abusing a process to make policy changes that could not otherwise be accomplished through regular order.

Our concern, which is reaffirmed by recent news reports on your negotiations, is that this instruction was added – and will be retained – by the Majority leadership to move legislation that gives the government-run Direct Loan program a significant advantage over the traditional Federal Family Education Loans (FFEL) program by subverting regular legislative order and allowing for sweeping policy changes through a process specifically established for deficit reduction.

As you know, the Senate Budget Committee Chairman and Ranking Republican share our concerns.  In fact, during the budget debate in the Senate, Budget Committee Chairman Conrad called the House instruction a “stalking-horse for a significant expansion of spending,” and during floor remarks, he endorsed an amendment – which was later adopted – to the Senate budget resolution to cap new direct spending at 20 percent of an overall budget reconciliation instruction.  This was specifically designed to preclude the House-passed reconciliation instruction from accomplishing anything other than deficit reduction.

There will be a time and place for a debate on the consequences of a larger government-run Direct Loan program, and we look forward to vigorously participating in that debate.  However, such a critical and far-reaching discussion would best take place in the context of regular legislative order – not through a process designated for deficit reduction.  Therefore, as budget negotiations wind down and a final blueprint is readied for House and Senate action, we respectfully request that you adopt the Senate budget amendment to ensure reconciliation does not become a “stalking-horse” for new spending and for sweeping policy changes best reserved for regular order. 

Thank you in advance for your consideration and response.

Sincerely,

Howard P. “Buck” McKeon (R-CA)                           

Senior Republican Member                                          

Education and Labor Committee                                  

Ric Keller (R-FL)

Ranking Republican Member

Higher Education, Lifelong Learning, and Competitiveness Subcommittee

Cc: 

Rep. George Miller, Chairman, Committee on Education and Labor

Rep. Rubén Hinojosa, Chairman, Subcommittee on Higher Education, Lifelong Learning, and Competitiveness