This week, lawmakers emerged with a compromise deal to raise the nation’s statutory borrowing limit– breaking a monthslong impasse on this important issue. The bill is expected to be signed by President Biden soon. Elsewhere, a new federal agency partnership has been announced.
Lawmakers Pass Debt Ceiling Deal
Since the start of the 118th Congress, lawmakers have struggled to agree on whether and how to raise the nation’s statutory borrowing authority (known informally as the debt limit or ceiling). This borrowing cap must be raised to pay for expenses Congress has already incurred. In recent weeks, the U.S. Treasury Department has estimated that the federal government will exhaust current options to service these debt obligations by June 5. Failure to raise the debt limit would result in an unprecedented default on the United States’ debt and would have severe economic consequences for the nation’s economy.
For the last several weeks House Republicans, led by Speaker Kevin McCarthy (R-CA), and President Biden have been intensely negotiating the contours of an agreement to raise the nation’s debt limit in exchange for spending and policy concessions. Over the Memorial Day weekend, lawmakers announced that they had reached agreement on this critical issue. The Fiscal Responsibility Act (FRA) suspends the debt limit for the next two years, through 2025, and establishes new spending caps for that same period of time. These spending caps, which will apply to the upcoming 2024 federal fiscal year (FY24) and the next (FY25), freeze current levels of federal investment in domestic programs, like those funded by the Carl D. Perkins Career and Technical Education Act as amended by the Strengthening Career and Techincal Education for the 21st Century Act (Perkins V), at roughly current FY23 levels. These spending caps will make it more difficult to increase funding for Perkins V and the Career Technical Education (CTE) programs it supports.
The FRA also contains a provision that incentivizes the passage of all 12 federal appropriations bills later this year. Should Congress not achieve that goal, an automatic spending reduction would be applied to the entire federal budget until full-year appropriations legislation has been passed. Further, the bill would allow for a one percent increase in funding for domestic discretionary programs in FY25. Collectively, these provisions are intended to slow federal discretionary spending, which has been a significant priority for Congressional Republicans.
In addition, the FRA rescinds approximately $28 billion in unspent pandemic aid funding, including an estimated $391 million in unobligated Education Stabilization Funding (ESF). While the ESF includes funding streams for K-12 education, higher education and private schools, early analysis of the legislation indicates that most of this rescinded funding will come from unclaimed resources that have not been disbursed by the U.S. Department of Education (ED). This means that these rescissions are not likely to have a substantial impact on states, school districts or postsecondary institutions given most of these resources have already been spent or otherwise obligated for future use. Finally, the FRA includes several other policy concessions sought by House Republicans, including imposing new work requirements for certain social safety net programs and modest reforms to permitting for energy projects.
Lawmakers returned to Capitol Hill this week to consider and vote on the FRA. Late Wednesday night, the full House chamber passed the legislation by a margin of 314-117, with 149 Republicans and 165 Democrats voting in favor of the proposal. The bill moved quickly over to the Senate, where lawmakers there cleared the legislation late Thursday night by a margin of 63-36. The FRA now heads to President Biden’s desk for signature and enactment ahead of the fast-approaching June 5 deadline.
ED and NASA Sign MOU
Last week, the U.S. Department of Education (ED) and the National Aeronautics and Space Administration (NASA) signed a memorandum of understanding (MOU) to strengthen coordination between the two agencies related to increasing access to high-quality science, technology, engineering and math (STEM) and space education programming. In particular, the MOU strengthens the agencies’ efforts to increase access for historically underserved student populations. “I am excited for this partnership with NASA that will inspire and prepare young people from all backgrounds to become our next generation of leaders in STEM fields and to propel our nation and our workforce into the future,” U.S. Secretary of Education Miguel Cardona said at the MOU signing. More information on the agreement can be found here.
Career Z Work-based Learning Challenge Deadline
As shared earlier this spring, the U.S. Department of Education (ED) launched a new grant competition aimed at surfacing innovative approaches to expanding learner access to high-quality work-based learning opportunities. The “Career Z Challenge” will provide multiphase grants to projects and ideas that can be scaled elsewhere and nationally. Local education agencies and schools that receive federal Perkins V funding are eligible to apply and to share their ideas for how to improve and expand work-based learning. The deadline for applications is June 7 and more information can be found here.
Steve Voytek, Policy Advisor
Tags: Career Z Challenge, cte funding, debt ceiling, debt talks, Fiscal Responsibility Act, Gen Z, NASA, perkins funding, STEM, STEM education, work-based learning