‘Tough Choices’ Ahead on Federal Budget

Inside Higher Ed

Katherine Knott

June 8, 2023

Although federal spending on domestic programs will be flat in the upcoming fiscal year, advocates and higher education lobbyists say there’s still a chance to secure more money to increase the maximum Pell Grant award and to fund the Office of Federal Student Aid, among other priorities.

Yet, more money for those areas will mean cuts in other areas of the budget, leading to “dire challenges and some really tough choices” for Congress and the Biden administration, said Jared Bass, senior director of higher education policy at the left-leaning think tank the Center for American Progress.

“The spending levels that were set present some really big challenges for what we’re able to do and how we’re able to invest in education and health care, and then childcare, and so many other social services and public goods that communities across the country really rely on.”

In order to avoid defaulting on the nation’s debt, President Biden and Republican House Speaker Kevin McCarthy cut a deal to limit spending on nondefense discretionary programs to $703.65 billion and suspend the debt ceiling through Jan. 1, 2025. The deal—which passed both houses of Congress last week—allows for a 1 percent increase in fiscal year 2025.

Flat funding and that 1 percent increase won’t keep pace with inflation, so it becomes a cut for programs, said Jon Fansmith, senior vice president for government relations at the American Council on Education.

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