July 29, 1999
July 22, 1999
July 16, 1999
July 8, 1999

7/29/99
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News from Capitol Hill...

'THE TAXPAYERS' REFUND ACT OF 1999" -- DON'T SPEND IT YET!

What’s happening? This week the tax debate moved to the Senate. At mid-week, debate began on S. 1429, the Taxpayers' Refund Act of 1999, a massive bill that outlines $792 billion in tax cuts over the next 10 years. The sweeping cuts would consume most of the projected 'on-budget' (non-Social Security) surplus. Last week's House-approved tax bill, H.R. 2488, "The Financial Freedom Act," also includes sweeping tax cuts. The Senate debate continues as this Update is transmitted. NEA opposes S. 1429.

Why NEA opposes the House and Senate Tax Bills: Who will pay for the "refund?" Education and children's programs would likely bear the greatest burden. Projected budget surpluses supposedly provide the “refund.” In reality, the surpluses projected over the next 10 years are based on holding spending below the limits (“caps”) agreed to in the 1997 Balanced Budget Act. Staying within the “caps” means deep program cuts. Transportation and defense are unlikely to be cut. Most likely, cuts will impact children's and education programs disproportionately.

No "Freedom" or "Refund" for Schools! Neither the House nor the Senate tax bill includes school construction bond tax credits that offer real help to local communities and states in meeting pressing school repair and construction needs.

Parents, educators, students, and other education advocates oppose S. 1429. Nineteen organizations, including NEA, representing millions of parents, educators, students, and other education advocates jointly, submitted a letter to all senators urging them to oppose S. 1429. The 19 organizations urged senators to support alternative, more education-friendly proposals that would be offered. The Moynihan Amendment (NY) reduces the total amount of tax cuts to a more fiscally responsible level, making funds available for vital programs and tax credits for school construction bonds. A proposal to reduce the size of the tax cut and increase funding for IDEA, class size reduction, and Pell grants may also be offered. Senator Robb (VA) may offer a separate amendment to fund tax credits for school modernization bonds.

A Taxing Tale" [A Lesson Worth Repeating!]

  • The surplus is merely "projected."
  • The “projected” surplus is based on current law that mandates "spending caps," i.e., fixed limits on spending.
  • The “spending caps” force deep cuts in all "discretionary" programs, i.e., programs that are not automatically funded as an entitlement.
  • Education, defense, transportation, health, children's programs are largely “discretionary” and must compete for the same limited funds.
  • Defense and transportation are unlikely to be cut. Education and children's programs will most likely suffer the greatest cuts.

The bottom line. The tax cuts debated for the past two weeks are illusory. The President supports modest tax cuts and promises to veto sweeping tax cuts. Stay tuned…


A FUNNY THING HAPPENED ON THE WAY TO EDUCATION FUNDING!

The process stalled! The funding made available to the Health-Education-Labor Appropriations Sub-Committee under the spending caps would result in program cuts that no one supports! The appropriators are now in a "punt and regroup" mode. Action on education funding for the Fiscal Year (FY) 2000 budget is unlikely until after Labor Day when Congress returns from the August recess.


NO JUVENILE JUSTICE IN CONGRESS - YET.

The House and Senate Juvenile Justice bills may see action shortly. House Leaders are said to be ready to name conference committee members. The Senate had suffered gridlock triggered by former Republican, now Taxpayers Party member, Senator Bob Smith of New Hampshire. Smith opposes the gun safety provisions in the Senate-passed Juvenile Justice bill. He had threatened to filibuster any effort to move the bill to Conference Committee. Senate leaders exercised a parliamentary procedure to unlock the bill and move it to Conference. The Senate did address hate crimes last week. The NEA-supported Hate Crimes Prevention Act of 1999, S. 622 [www.nea.org/lac/civil] introduced by Senators Kennedy (D-MA) and Specter (R-PA) was incorporated into the FY2000 Appropriations bill for the Departments of Commerce, Justice, and State.


STATE LAWMAKERS ON SCHOOL CONSTRUCTION.

The tax cut sweep hasn't reached public schools! The House and Senate tax bills fail to include NEA-supported tax credits for interest-free school construction bonds that help states and local communities address school repair and construction needs. The National Conference of State Legislators (NCSL) followed the mayors of more than 60 cities in appealing for help. “Burgeoning student enrollment, the aging of existing facilities, and retrofitting demands of the information age have contributed to a growing public consensus that federal assistance is needed to supplement state and local facilities programs," NCSL wrote to every Member of Congress. NCSL pointed out that many states are investing heavily in school modernization, but they can't get the job done without help.

7/22/99
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News from Capitol Hill...

HOUSE UNDERMINES CLASS SIZE REDUCTION
PROMISES MORE; GIVES LESS

What the House did - This week, the House of Representatives approved an education block grant, H.R.1995 -- the so-called “Teacher Empowerment Act,” offered by Representative William Goodling (R-PA), but not with a veto-proof majority. In a letter to House Minority Leader Richard Gephardt (D-MO), President Clinton said: "I will veto [this legislation] in order to protect our nation's commitment to smaller classes and better schools." The bill's supporters do not have the votes to override a veto. A substitute offered by Representative Matthew Martinez (D-CA) was narrowly defeated. H.R. 1995 wraps a number of education programs into one large block grant destined for the states. The bill also permits federal funds to be used for “tenure reform,” merit pay, and teacher testing and prohibits federal funding for the National Board for Professional Teaching Standards.

What it means - This legislation combines class size reduction funds with Eisenhower Professional Development Funds. It forces local school districts to choose between hiring new teachers to reduce class size or providing professional development opportunities to educators. The provisions for "tenure reform," merit pay, etc. represent a precedent-setting intrusion into locally bargained issues. The "Teacher Empowerment Act," in effect, undermines one of the most effective teaching and learning tools, smaller classes with increased individual attention, and threatens to intrude in local bargaining.

The big picture - This block grant legislation is the first of a several education bills that the House Leadership intends to push through as part of the reauthorization of the Elementary and Secondary Education Act (ESEA). The 34 year-old ESEA is the nation’s main K-12 education bill. Its more than 40 programs include the landmark Title I supplementary reading and math instruction for economically disadvantaged children, teacher training, class size reduction initiative, magnet schools, educational technology, bilingual education, testing, after-school programs, reading excellence, and safe and drug-free schools and receive more than $10 billion annually. In 1994, ESEA was refocused on standards with accountability and reauthorized for five years.

NEA supports reauthorization of ESEA, improving on the standards and accountability initiatives introduced in 1994. The programs within ESEA fit together, forming a foundation that supports student achievement. The act should be reauthorized as a whole.

The House Leadership strategy obscures and diminishes the programs without appearing to attack these popular initiatives. All of the bills proposed commingle funds and deliver them to the states under the guise of "flexibility." As programs lose their focus and identification, diminished funding evokes less public outcry. In fact, the existing program does allow flexibility under the NEA supported Ed-Flex legislation.

Senate leaders plan to draft a single, comprehensive renewal of ESEA, ultimately forcing the various House bills into the same format.

Weeks ago, we reported that "The reauthorization debate will almost certainly see vouchers, block grants, teacher testing, merit pay, and other questionable teacher “quality” and accountability initiatives proposed." This week, it began.

Bottom line: The House vote on H.R. 1995 marks the first skirmish in a long struggle. The 1999 reauthorization debate sets the stage for a defining battle over education policy in the new millenium.

FINANCIAL FREEDOM ACT
(But not for Schools!)

What the House did - nothing yet! [Late news! It now appears that the tax bill will come to the floor today, Thursday, July 22. The Leadership is offering a somewhat scaled back tax package, with income tax cuts phasing in ONLY if progress in paying off the national debt reaches certain benchmarks. However, the scenario sketched out below continues to hold true, with the numbers somewhat reduced.]

Faced with controversy and shaky support, the House Leadership delayed Wednesday’s scheduled vote on the House tax bill, H.R. 2488, the so-called Financial Freedom Act. The bill, as passed by the Ways & Means Committee, included far ranging tax cuts that would cost the Treasury $864 billion over 10 years [scaled back to $792 billion]. According to the Congressional Budget Office (CBO), the reduced revenue would result in an increase of $155 billion in interest payments on the national debt. Thus the true cost of the bill would be $1,019 billion, or $23 billion more than the entire projected “on-budget,” i.e., non-Social Security, surplus. Republicans and Democrats called the bill fiscally irresponsible. Democrats have proposed an alternative with more modest cuts.

The tax bill and school modernization - The Ways & Means Committee bill does not include tax credits for zero-interest school construction bonds. The school modernization language offers only modest help to a limited number of school districts. Tax credits for zero-interest bonds are included in the Democratic alternative. NEA and a broad coalition of education groups, mayors, and business interests strongly support zero-interest bonds to help states with school repairs, renovation and construction. Some 176 Representatives, Republicans and Democrats, are cosponsors of H.R. 1660 or H.R. 1760 that offer zero-interest school modernization bonds.

What the tax bill means for education - Most simply put, life or death. The tax bill will determine whether resources are available to sustain education programs, health programs, social services, defense - and more.

A "Taxing Tale"

  • The surplus is "projected;" it does not exist.
  • The “projected” surplus is based on current law that mandates "spending caps," that is, spending must stay within the caps for the projected surplus to materialize.
  • The spending caps demand deep cuts in all "discretionary" programs, i.e., programs that are not automatically funded as an entitlement.
  • Education, defense, health, children's programs, and more must compete for the same limited funds.
  • In the past, the Social Security surplus relieved the funding crunch. The President and the Congress agree that the Social Security surplus will no longer be available for non-Social Security programs.

The bottom line. The proposed tax cuts depend upon Draconian cuts in programs and services or a return to deficit spending. Education programs would be subject to cuts totaling almost $30 billion over the next ten years.

The Senate tax bill proposes less sweeping cuts. The President supports modest tax cuts and promises to veto sweeping tax cuts. Stay tuned…

NO JUVENILE JUSTICE IN CONGRESS - YET!

There is still no timeline for convening the conference committee to reconcile the differing House and Senate Juvenile Justice bills. Gun safety efforts suffered a setback this week when the ban in importing large-capacity ammunition clips was stripped from the Senate-passed Juvenile Justice bill. Imports are revenue related and the Constitution requires that such measures originate in the House. Colorado Representative Diana DeGette moved quickly to file a "discharge petition." A discharge petition requires the House to take up a bill, once the petition has 218 signatures.

7/16/99
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News from Capitol Hill...

CLASS SIZE REDUCTION IN JEOPARDY!!

What to Look For: July 21 House action on H.R. 1995, forcing school districts to choose between class size reduction and providing professional development opportunities.

The Issue. H.R. 1995 “The Teacher Empowerment Act,” authored by Representative William Goodling (R-PA), addresses an NEA priority - quality, research-based professional development. However, the bill authorizes no funding above current levels. Instead, the bill combines class size reduction funds with Eisenhower Professional Development Funds. It will force local school districts to choose between hiring new teachers to reduce class size or providing professional development opportunities to educators. The bill also permits federal funds to be used for “tenure reform,” merit pay, and teacher testing. H.R. 1995 prohibits federal funding for the National Board for Professional Teaching Standards. NEA opposes the bill.

Advocacy Action: Urge your U. S. Representative to:

  1. support any amendment that maintains the integrity of the program to add 100,000 teachers for class size reduction; and

  2. oppose final passage of H.R. 1995, which forces school districts to choose between class size reduction and professional development opportunities for teachers.

Send a message to your Representative from the NEA Legislative Action Center, www.nea.org/lac/

“TAX RELIEF" -- BUT NOT FOR PUBLIC EDUCATION!!

Tax Savings [$5?] for K-12 Private Education [“Coverdell”]

The Ways & Means Committee went to work on the “big” tax bill this week. The tax proposal provides K-12 tax-free expenditures from Education Savings Accounts (ESAs). Eligible expenses include K-12 nonpublic school tuition and home schooling. The K-12 plan is popularly called “Coverdell,” a reference to its author and advocate, Georgia Senator Paul Coverdell. “Coverdell” passed the 105th Congress, but was vetoed by President Clinton. An analysis of the plan -- then as now -- reveals that families of public school children would realize only a $5 per year benefit. “Coverdell” offers the greatest advantage to families with children already in private school. Estimated cost: $3.5 billion over 10 years.

Tax Savings for 90 Percent of Our Children – Safe, Modern Schools

Kudos to Representative Nancy Johnson (R-CT)! Representative Johnson moved to delete the “Coverdell” language and applying the estimated $3.5 billion cost in tax credits to zero-interest school construction bonds. States and local communities would repay only the bond principal. In lieu of state or local interest payments, bondholders would receive a federal tax credit. States and local communities -- rural, suburban and urban -- need help in providing safe, modern school facilities. Instead of spreading $3.5 billion in small amounts for 10 percent of families who have children in private schools, Congress should use the money for 90 percent of our children in public schools, Representative Johnson said. Her amendment won strong support from fellow Committee member Representative Charles Rangel (D-NY). The Johnson Amendment was ruled out of order.

A bipartisan issue. Representatives Johnson and Rangel reflect bipartisan support for helping states and local communities tackle school repair, renovation, and construction needs. Each has introduced legislation (Rangel – H.R. 1660; Johnson – H.R. 1760) providing federal tax credits in lieu of state or local interest payments to school construction bond holders. Subsidizing the interest payments through federal tax credits would save school districts as much as 50 percent of the cost of a 15-year bond. In many communities, where levies underwrite school construction, zero-interest bonds have the added advantage of lowering property taxes. [Note: To see how many dollars went to school debt interest payments in your state, go to www.nea.org/lac/modern]

Arbitrage in the tax bill – too little for too few. Chairman Archer’s school construction proposal -- “arbitrage relief” -- doesn’t get the job done. “Arbitrage relief” would allow school districts to invest bond money and keep the earned interest for up to four years. School construction bond dollars are needed for repair, renovation and construction now, not for investment now and repairs later. The interest earned is not designated for school building needs. Small rural districts, already exempt from the current two-year restriction on investing tax exempt bond dollars, receive no help at all.

The Senate Committee action on a tax package is tentatively scheduled for July 21.

Advocacy Action: Send a message to your Representative and Senators. Urge them to support tax credits for zero-interest school construction bonds that benefit 90 percent of our children who are in public schools, rather than a $5 benefit to families, or school construction tax proposals that exclude many rural schools and don’t meet school construction and renovation needs. [Note: Go to the NEA Legislative Action Center, www.nea.org/lac/modern and click on Send Congress a Message]

7/8/99
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News from Capitol Hill...

EDUCATION FUNDING

What to Look For: The biggest projected surplus and the biggest projected education cuts ever …as much as 10 to 12 percent!

The House Labor, Health and Human Services (HHS), and Education appropriations subcommittee, is scheduled (July 15) to “mark up,” i.e., to pass out of subcommittee and send to the full committee, the Fiscal Year (FY) 2000 budget for the Labor, HHS, and Education Departments.

At issue: The sub-committee has a fixed number of dollars with which to work. Under the caps, i.e., the spending limits put in place by the 1997 Balanced Budget Agreement, the dollars are too few to get the job done. Relief for one worthy program comes at the expense of other worthy programs. Subcommittee chairman John Porter (IL) told the House Leadership and education advocates that he cannot, within the limits imposed on the subcommittee, write a budget bill that will win a majority vote.

The Senate counterpart subcommittee is also set to act upon (July 13) and forward to the full committee its version of the FY 2000 Labor, HHS, and Education Department budgets. Full committee action is scheduled to follow on July 15.

At issue: Once again, “It’s the caps, Stupid!”

Advocacy Action! Tell your Representative and Senators that cuts in education funding are unacceptable … what a 10 to 12 percent cut would do to your school. Urge them to support, instead, a 15 percent increase in education funding. Setting high standards isn’t enough. The real measure of our commitment to excellence is the support we provide to help students achieve high standards. www.nea.org/lac/funding

THE TAX BILL

What to Look For: Tax savings for K-12 private school tuition. School construction provision.

The House Ways & Means Committee is scheduled (July 14) to “mark up,” i.e. vote out of committee and send to the House floor, the tax bill.

At Issue:

  • Tax Savings for K=12 nonpublic tuition, home schooling. The K-12 education tax savings plan is popularly called “Coverdell,” a reference to its author and advocate, Georgia Sen. Paul Coverdell. “Coverdell” would provide tax savings for varied education expenses, including K-12 nonpublic school tuition and home schooling. “Coverdell” passed the 105th Congress, but was vetoed by President Clinton. An analysis of the plan – then as now - reveals that families of public school children would realize only a $5 per year benefit. “Coverdell” offers the greatest advantage to affluent families whose children are already in private schools. Estimated cost: $2.6 billion.

  • School Construction: Arbitrage – too little for too few. Chairman Bill Archer (TX) will address school construction through a process called arbitrage. In current law, arbitrage provisions place limits on delaying construction projects and investing bond money for interest earnings. Chairman Archer’s plan would extend from two to four years the time period allowed school districts to invest bond money and earn interest. While the Chairman’s acknowledgment of school construction needs is encouraging, the arbitrage proposal doesn’t get the job done. School construction needs are immediate. The dollars are needed now, not four years from now. The interest income can be used for any purpose and is not targeted to school repair, renovation, and construction. Small rural districts are already exempt from current restrictions on investing tax exempt bond dollars and receive no help at all. Cost: $1.4 billion.

    Zero-interest bonds – meaningful help for all Education advocates support zero-interest bonds. States and local communities that approve school construction bonds would repay only the principal. In lieu of state or local interest payments, the holders of bonds would receive a federal tax credit. Cost: $3.1 billion. Dollars generated: $25 billion (all of which would underwrite school construction). Eligible states: ALL [rural, urban, suburban communities]. In many communities, where levies underwrite school construction costs, zero-interest bonds have the added advantage of lowering property taxes. Because the savings on interest payments are substantial, states and local communities can address their repair, renovation, and construction needs for a much lower cost.

The Senate Finance Committee is set to act on its tax bill, the week of July 21.

Advocacy Action! Send a message to your Representative and Senators. Urge them to maximize the benefits to children with zero-interest school construction dollars, rather than a $5 benefit to families, or school construction proposals that exclude many rural schools and don’t meet school construction and renovation needs. www.nea.org/lac/modern

CLASS SIZE INITIATIVE UNDER ATTACK!

Congress watchers anticipate House floor consideration of H.R. 1995, the Teacher Empowerment Act, late the week of July 12. NEA opposes the bill.

H.R. 1995 addresses quality, research-based professional development. The bill does not authorize any funding above current levels, however. Rather, the bill would allow a commingling of resources, including class size reduction funding, that support Elementary and Secondary Education Act (ESEA) programs to fund professional development initiatives. In effect, the class size reduction program would be eliminated.

The Teacher Empowerment Act reflects the broad strategy of subsuming current federally-funded education programs by commingling program funding in block grants. Professional development is a part of the massive ESEA that completes its current five-year cycle this year and is up for reauthorization. Congressional critics seek to unravel the programs without waging a direct attack. Rather than considering ESEA in a single bill, as Congress has done over the 34-year life of the program, they have introduced a series of bills focusing on parts of ESEA. Debate on separate bills redirects the focus away from serving our neediest students and program accountability to largely unfettered state control of federal education dollars.

The class size reduction initiative, included in ESEA Title VI, would bring 100,000 additional teachers into our schools over six years to help states and local communities reduce class size. Commingling the program funds effectively undermines class size reduction. Opponents of the class size reduction initiative welcome this strategy.

A Note on Flexibility: The Ed-Flex bill adopted by Congress earlier this year, a bill that NEA supported, gives states and local communities broad flexibility to shape programs to local needs, while maintaining accountability for serving the population for whom the program is intended and for program quality.

Advocacy Action! You know class size makes a difference. Now research supports your experience. Tell your Representative that Congress should keep the promise made with the “down payment” on class size reduction in this current year’s budget and fund the full 100,000 teachers over the next five years. Professional development enhances the good effect of smaller classes. It deserves to be paid for in its own right, not at the expense of an effective vehicle for connecting with children, smaller classes. www.nea.org/lac/size

JUVENILE JUSTICE, GUN SAFETY IN THE WINGS

Speaker Dennis Hastert’s goal of significant progress on reconciling the House and Senate Juvenile Justice bills and forging a House/Senate agreement on gun safety by Independence Day has come and gone. Congress watchers say agreement is no closer.

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