BUDGET MEASURE TEMPORARILY LIFTS DEBT CEILING - TENSION ON EDUCATION CUTS - Friday, November 15, 1985

Sep 28, 2026

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Friday, November 15, 1985 coverage explains how Congress approved a one-month extension to the federal debt ceiling, easing immediate default risk while shaping the outlook for education funding cuts. It describes negotiations between House and Senate plans tied to the Gramm-Rudman-Hollings amendment, including projections for deficit reduction and the timing and depth of potential program reductions. Education leaders warn that Pell Grants and Guaranteed Student Loans could face significant losses under Gramm-Rudman, even as the House plan is seen as more technically acceptable. The article also notes related stopgap spending affecting the Education Department.

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BUDGET MEASURE TEMPORARILY LIFTS DEBT CEILING, TENSION ON EDUCATION CUTS

Debt ceiling extension and timing

Gramm-Rudman-Hollings amendment impact on education

Pell Grants and Guaranteed Student Loans risks

VA PROPOSES REGULATIONS TO UPDATE GI BILL

New GI Bill rules and retroactivity

Education funding formula and service requirement

Program contacts and sources

COLLEGE STUDENTS' EARNINGS MAKE UP AID GAP

Vo1。13,No。223 Friday,November 15,1985 # BUDGET MEASURE TEMPORARILY LIFTS DEBT CEILING,TENSION ON EDUCATION CUTS Educators wary of how a controversial plan to balance the federal budget mightaffect them earned a temporary reprieve from their fears yesterday when Con-gress approved a one-month extension of the government's debt ceiling. In an early morning session,the House by voice vote approved modificationsmade by the Senate to a House plan adopted late Wednesday that would stop thegovernment from defaulting today by temporarily lifting the debt ceiling. Buys More TimeH.R.3721,the $80 billion extension agreed on by bothhouses,would stretch the government's borrowing power until Dec.6.It alsobuys congressional leaders more time to reach a compromise on the Gramm-Rudman-Hollings amendment,which has held up passage of H.J.Res.372,a bill thatwould raise the federal debt celling from $1.8 trillion to $2.079 trillion. The amendment,introduced by Sens.Phil Gramm,R-Texas,Warren Rudman,R-N.H.,and Ernest Hollings,D-S.C.,would decrease the current deficit of $180 billionby $36 billion a year until a balanced budget is reached in 1991.A workinggroup of Senate and House conferees has been meeting to iron out differencesbetween the Senate's plan,approved Oct.8,and a House alternative passedNov.1,which would require heavier defense cuts,protect certain povertyprograms and begin cuts a year earlier to a achieve a balanced budget by 1990. Susan Frost,executive director of the Committee on Education Funding,calledthe House plan "technically"more acceptable to educators because it gives theadministration less discretion in sequestering funds if Congress does not meetits deficit reduction targets.But because that plan sets a lower deficitceiling,it would begin slicing programs earlier and require deeper cuts thanGramm-Rudman,said Frost,who predicted both plans would "devastate"education. Backed Off In the wake of a recent interpretation of Gramm-Rudman offeredby Education Secretary William Bennett in a letter to House Education and LaborCommittee Chairman Augustus Hawkins,Frost's committee has backed off on ear-lier estimates that the plan initially would cause severe cuts in most educa-tion programs(HED,Nov.13). But the committee maintains Pell Grants and Guaranteed Student Loans(GSLs)could suffer significant losses under Gramm-Rudman. Frost said the 50 percent of Pell Grant funds not obligated until the grantsare disbursed could be cut if a presidential sequester order were issued underGramm-Rudman. She said Pell Grants would fare better under the House plan,asit exempts from cuts funds that are committed but not obligated.(more) November 15,1985 BUDGET MEASURE TEMPORARILY LIFTS DEBT CEILING,TENSION ON EDUCATION CUTS And because the Senate plan gives the administration broader discretion to re-fashion GSLs in the event of a sequester,"banks could take one look at whatthey did and say 'we're not giving any more loans,'"Frost said. The American Council on Education(ACE)has called Bennett's interpretation ofGramm-Rudman “a gross distortion which evades the primary federal responsibi-lity for gupport of student financial aid and for basic research." Bennett's letter said Pell Grants "would not be disproportionately affected"bythe sequestration process"under Gramm-Rudman. In a recent letter to Hawkins,Charles Saunders,ACE vice president for govern-mental relations,said even a 3 percent cut in student aid outlays would“im-pose devastating restrictions of educational opportunities for needy students." The debt extension measure passed yesterday takes the pressure off educators,"but not for long enough,"Frost said."I hope the collision course betweenthe two houses remains a collision course."Had the temporary debt ceilingextension not passed,the U.S.Treasury would have run out of cash today,hampering government agencies on the eve of President Reagan's departure for aU.S.-Soviet summit on arms control. Mean

FAQs

What did Congress approve regarding the federal debt ceiling on November 15, 1985?

Congress approved a one-month extension of the federal debt ceiling, providing temporary relief and preventing an immediate default.

How do the House and Senate deficit plans differ in their effects on education funding?

The coverage states that the House plan is more technically acceptable to educators but may require earlier and deeper slicing because it sets a lower deficit ceiling.

What are the concerns about Pell Grants and Guaranteed Student Loans under Gramm-Rudman?

The article reports that Pell Grants could be cut through sequestration effects and that Guaranteed Student Loans could face significant losses if sequestration orders are issued.

Sep 28, 2026

Uploaded by Grenda