Lawmakers Work on Spending Deal as Deadline
Appropriations leaders are eager to continue negotiations to reach a deal on an omnibus spending package before the February 18 deadline. Senate Appropriations Committee Vice Chairman Richard Shelby (AL) has been reaching out to Democratic counterparts to try and finalize a deal. Lawmakers on both sides of the aisle want to avoid using a continuing resolution to fund the Pentagon and national security agencies. On Wednesday, January 12, the House Appropriations Defense subcommittee will hold a hearing where military branch chiefs will discuss the negative impact a CR would have on the armed forces. One suggestion is to pair additional COVID relief funding and other social spending with an increase in Pentagon funding as part of a broader budget deal. While there would be objections on both sides, many senior appropriators believe they could muster enough support to push a package through both chambers. Both the House and Senate approved the National Defense Authorization act at the $740 billion level by bipartisan margins - which is far higher military spending than initially proposed by the White House - so Congress seems willing to spend more on defense. Senate Minority Leader Mitch McConnell (KY) has warned House Democrats that the GOP wants parity between defense and non-defense spending as well as no ‘poison pills’ for policy riders. Congress also faces procedural difficulties in reaching and passing an omnibus. First, there needs to be a deal on topline amounts then the policy riders would have to be negotiated as well as individual bills. So far, none of these has moved in the Senate.
Build Back Better Act Congressional Democrats have not given up on trying to get certain pieces of the Build Back Better (BBB) Act passed - including major education provisions such as universal pre-K for 3- and 4-year-olds and an increase to the Pell Grant. While Senator Joe Manchin (WV) has rejected the bill in its current form, he has indicated that he’s in agreement with free preschool provisions. Democrats left for-profit colleges out of the Pell Grant boost and the Administration has signaled it wants to hold these colleges accountable for student outcomes. Democrats are also hoping they can pass the $555 billion in spending on climate and clean energy-related provisions in the BBB Act, which would include the biggest ever step made by Congress to speed the transition to clean energy by providing $400 billion in long-term tax credits to green technologies. Republicans argue that the Democrats’ spending bill would accelerate the transition to clean energy too quickly - worsening inflation and threatening jobs in the coal, natural gas, and oil industries. President Biden is expected to restart talks with Senator Manchin after a ‘cooling off’ period, which Democrat Senators agreed to, that is expected to extend until the Senate finishes debate on voting rights legislation and rules reform.
Senate HELP Committee The Senate HELP Committee will again vote on the nomination of Amy Loyd, President Joe Biden’s pick to lead career and technical education at the Education Department. The panel advanced Loyd’s nomination on a voice vote last October but the full Senate never acted on her nomination, so it expired when the first session of Congress ended in December. Biden re-nominated her earlier this month. Loyd, who previously was a vice president at Jobs for the Future, has been serving as a senior advisor at the Education Department since last year.
Administration College Accountability Agenda This month the Biden Administration plans to begin work on key parts of its college accountability agenda by drafting new regulations that restrict how and when colleges and universities - particularly for-profit ones - can access federal funding. In his presidential campaign, Biden promised he would force for-profit colleges to prove their value before getting access to federal funding. A provision was included in the American Rescue Plan Act (ARPA) that changed the ‘90/10 rule’ that restricts the share of revenue that for-profit colleges can derive from the federal government. Implementing the changes to that rule will be a key part of the upcoming negotiated rulemaking sessions. Implementation of the tighter restrictions on for-profit colleges was delayed until 2023 under the ARPA. One expected disagreement will be over how broadly the Administration chooses to define which federal education assistance funds count as part of the 90/10 rule’s cap on federal funding to for-profit colleges - who have called for a narrow interpretation, such as including GI Bill education benefits and Pentagon Tuition Assistance funding. Congressional Democrats, however, are seeking to include other federal sources of funding in the calculation. For-profit colleges are also seeking a transition period when it comes to punishment for breaking the rule, but critics want to see the rule implemented immediately. The Administration also wants to reinstate a version of the Obama-era ‘gainful employment’ rules that cut off federal aid to career college programs that left students with large amounts of debt compared to their earnings, and also required several disclosures to prospective students about the outcomes of those college programs. Former Secretary of Education Betsy DeVos did away with the rules entirely - saying they were too heavy-handed and unfairly targeted for-profit colleges. Progressives have already pushed back on the Administration’s handling of the gainful employment rules - saying it has defended the legality of DeVos’ repeal of the rules in court and hasn’t moved quickly enough to reinstate them. Department officials have said they need to go through an entirely new rulemaking process to reinstate the gainful employment rules and argued in court the Department isn’t prepared to immediately return to those rules. Details on how the Biden Administration will rewrite the rules will begin to emerge in the coming weeks. The Department of Education is expected to release the names of individuals who will comprise the rulemaking committee this week and negotiations will begin on January 18, with the Department already setting dates for two additional sessions - February 14 and March 14. Treasury Final Rule On Thursday, January 6, the U.S Treasury Department released its Final Rule governing the State and Local Fiscal Recovery Fund (SLFRF), which provides $65.1 billion to All Cities under the American Rescue Plan Act. The SLFRF, and its unprecedented funding, was the top priority of the U.S. Conference of Mayors and the Biden Administration during its first 100 days. The Treasury Department will hold a series of webinars to describe the Final Rule and its major changes from the Interim Final Rule that will take place on January 10, 2022 at 4:00 pm ET and January 12, 2022 at 1:00 pm ET. Click here to access the Final Rule.
Click here to access the overview of the Final Rule.
Click here to access the press release.
Click here to register for the January 10 webinar.
Click here to register for the January 12 webinar.
Unemployment Rate On Friday, January 7, the Department of Labor (DOL) Bureau of Labor Statistics (BLS) released the December jobs report which showed the U.S. economy added 199,000 jobs last month, bringing the total for 2021 to 6.4 million jobs. The unemployment rate dropped from 4.2% to 3.9% and fell for all U.S. workers except Black women. The unemployment rate for Black women jumped to 6.2% last month from 4.9% - the only race and gender group whole unemployment rate worsened last month. Click here to access the full report. Click here to read Secretary Walsh’s statement. Click here to read the blog post by Chief Economist Janelle Jones.