Budget-Busting Education
by Brian Reidl
Issue 113 - August 6, 2008

Congress’s current reauthorization of federal higher-education programs provides a case study in persis­tently expanding government. Over the past few years, lawmakers fought a furious battle to shave $8 billion a year off the growth of entitlements, President George W. Bush and Congress spent all of 2007 arguing over a $22 billion difference in discretionary spending targets, and lawmakers (armed with mountains of studies) formed numerous working groups trying to eliminate even five to 10 outdated federal programs.

Then, virtually unnoticed, the House of Represen­tatives voted 354 to 58 on February 7 to add $169 bil­lion in new higher-education spending and create at least 50 new federal programs. In other words, one step forward, 10 steps back.

The College Opportunity and Affordability Act of 2008 (COAA, H.R. 4137) is the latest budget-busting bill from a Democratic Congress that has found few parts of government undeserving of massive new def­icit spending. What makes this bill unique is the over­whelming House Republican complicity in making this bill—among the largest authorized discretionary spending hikes in American history—bipartisan, non-controversial, and generally unnoticed. Nor has the Senate, which takes up the bill next, expressed much concern over COAA’s price tag and new programs.

Although federal outlays for higher education have nearly tripled since 2001, COAA would authorize extensive new spending, dozens of new programs, and more Washington control of the daily operation of America’s colleges and universities. It would expand grants even though student loans can increase college access with less taxpayer burden. And it would boost federal student aid without addressing the link between increased student aid and tuition hikes.

Lawmakers should take this massive government expansion off the fast track and address the bill’s costs and underlying policies.

COAA represents one of the largest authorized discretionary spending hikes in American history. While lawmakers would not be required to fully fund this $34 billion annual hike, this bill is clearly intended to lay the groundwork for—and create the political expectation that there will be—a staggering increase in federal higher-education spending. By shifting more money and power to Washington, the bill would leave taxpayers on the hook for higher taxes, and colleges and universities would find themselves increasingly micromanaged by Washington.

Rather than rubber-stamping this legislation, the Senate should strongly question its cost, its creation of 50 new programs, and its attempt to tell states how much to spend on higher education. Above all, lawmakers must accept the budgetary reality that taxpayers cannot afford these persistent, large bud­get increases across the federal government.

Brian M. Riedl is Grover M. Hermann Fellow in Federal Budgetary Affairs in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation. Heritage Foundation intern Maren Gardiner contributed to the research for this report.