Obstacles to Winning Passage of the Labor-HHS-Education Conference Report

There is an old joke about a kid who was so ugly his parents had to tie a pork chop around his neck to get the dog to play with him. If the giant appropriation bill funding the Departments of Education, Labor and Health and Human Services were a child, it would need a lot more than one pork chop to attract companionship. That was the lesson learned last month when the bill reached the House floor.

On Thursday, the House will take another shot at passing the legislation with a few minor adjustments that if anything make the legislation less attractive. Restored is Viagra coverage under Medicare. The conference also pluses up some of the hard hit rural health programs but pays for it with a $120 million cut from pandemic flu preparedness.

The rationale is that we will pay for that later. There are only two problems. First, anything that we cut from this bill with the idea of adding to a subsequent spending measure is not a saving. Second, we really don’t know when pandemic flu might strike. Maybe never. Maybe next week.

But the new agreement leaves the downward spiral in federal support of some of the most popular and important activities of the federal government untouched from the earlier version that failed in November.

Education is hit hard. Despite repeated surveys indicating that nearly three-quarters of all Americans want federal assistance to schools increased, with two-thirds saying they would pay higher taxes to see that increase, spending on education is cut $59 million below last year’s level. When inflation and population growth are considered, the real world impact of the cut is much deeper.

Real per capita spending on education (discretionary appropriations to the Department of Education) rose steadily between 1997 and fiscal 2002, federal real per capita spending on education grew from $121 a person to $194, an average annual growth rate of 10%. Following the passage of the “No Child Left Behind Act,” the growth in fiscal 2003 slowed to 3% and the following year it was essentially flat—peaking at $202 per capita. But last year the trend turned negative and real per capita spending dropped to $197. This bill will cut real per capita federal spending on education to $184, 6.6% below last year and $10 below the level we were at when we adopted “No Child Left Behind.”

Equally as popular is the money we spend to understand and fight dread disease. The federal government, through the National Institutes of Health, supports a huge proportion of the biomedical research worldwide. Real per capita spending at NIH grew from $66 in fiscal 1997 to $104 in fiscal 2003. But since then we have been headed in the opposite direction. Declines in 2004 and last year cut real per capita spending at NIH to $97 and this bill lowers it to $91, a nearly 6% one year decline. At this pace, we will cut real per capita spending below 1997 levels by 2012.

Last year the number of new and competing grants awarded at NIH was nearly 10% below 2003 levels and that trend promises to continue under the new conference agreement. We are in effect “undoubling” NIH.

The Low Income Home Energy Assistance Program (LIHEAP) is another sensitive area of the bill. The Department of Energy recently estimated that heating with natural gas will cost the average household about $300 or 48% more this winter than last. Even at last year’s energy prices, more than 4 million households needed LIHEAP assistance, which averaged about $300 per household and covered about half of the average $600 fuel bill. This year’s appropriation FREEZES LIHEAP funding at last year’s level—an appropriate term given the impact that it will have on recipients.

The shortcomings of the bill go on and on. The number of meals provided under the “Meals on Wheels” program will be cut again. The number of kids who will be unprepared to start Kindergarten will increase due to cuts in the Headstart Program. The ability of state public health agencies to monitor for diseases ranging from West Nile Virus to Avian Flu will decline. And all of the consequences that I have described will be further compounded if the Congress follows up this appropriation with a final piece of legislation that cuts discretionary spending by an additional percentage as the House Republican Leaders have promised.

In the past, projects have helped members vote for legislative decisions that are diametrically at variance with public sentiment. Some have argued that the failure to include pork in this ugly package may have sealed its fate. Perhaps – but fortunately for the Republican members now being pressured to reverse their earlier opposition to this ugly spending package, the press and the public are remain largely unaware of its contents.

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Scott Lilly

Senior Fellow