House Appropriations Committee Approves $18 Billion Cut to Labor, HHS and Education Programs

In the next step of the fiscal year (FY) 2012 budget process, the The House Appropriations Committee voted Tuesday to approve House-set FY 2012 spending limits for the 12 appropriations subcommittees. The spending limits would require the Subcommittee on Labor, Health, and Human Services, Education, and Related Agencies to reduce spending on these programs by $18 billion from FY 11 levels. Republican leaders in the U.S. House of Representatives set the spending limits on May 11.

The spending limit for the Labor, HHS, and Education Appropriations Subcommittee - known as the 302(b) allocations - is $140 billion, nearly $42 billion less than President Obama proposed in his FY2012 budget request. It is up to the subcommittee to determine how to reduce program spending by that amount, but the size of the federal student aid programs will make them a likely target for cuts. The subcommittee is scheduled to markup the bill July 26 and the full committee will markup the bill August 2. 

It is important to note that Congress is just beginning the FY2012 budget process and the Senate has yet to set spending levels for the upcoming fiscal year. The Republican-controlled House and the Democratic-controlled Senate will have to reach an agreement on spending levels before it becomes law. Democrats are generally more opposed to cuts to Labor, HHS, and Education programs so the House's 302(b) allocations sets the stage for tough negotiations on funding for these programs.

The recent, rapid growth of the Pell Grant program makes it a contentious budget item, and the House has already passed a FY 2012 budget resolution that would reduce the maximum Pell Grant award to pre-stimulus (also known as the American Recovery and Reinvestment Act) levels.  While the resolution lacks details, this could mean returning Pell to FY2008 levels. The Congressional Budget Office (CBO) estimates that this would result in a maximum Pell Grant of $3,040 for the 2012-13 academic year -- down from the current $5,550 maximum award. Additionally, the Republican budget resolution calls for the repealing and defunding of the Healthcare and Education Reconciliation Act (HCERA), which includes mandatory funding for the Pell Grant program.

The budget resolution is a relatively symbolic measure because it is a nonbinding resolution that sets broad spending levels that appropriations' committees use to set specific spending levels for federal programs. In addition, it is unlikely that the Democratic-controlled Senate will approve the measure.

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