With a victory over Republican Mitt Romney, President Obama will begin to gear up for a second term that may see both continuity and change in his education policies.
In a legislative landscape similar to his first term, Obama again will face a divided Congress as well as fiscal challenges. But the president will need a bipartisan agreement to deal with some of the most pressing issues, including the so-called “fiscal cliff” that could bring painful education program cuts and tax increases as early as January.
This “fiscal cliff” is a combination of fiscal issues converging at once: the expiration of George W. Bush-era tax cuts plus payroll tax reductions and education deductions enacted under Obama, the need for another increase in the federal debt ceiling and looming across-the-board budget cuts that trigger if Congress and the president fail to agree on a larger debt-reduction plan.
The across-the-board cuts, known as a sequester, would affect both domestic and defense spending. Most analysts say federal education programs would lose about 8 percent of funding with the prospect of additional cuts in future years.
“A budget sequester in January would have a terrible short- and long-term impact on the nation’s investments in scientific research and education,” said Hunter Rawlings, president of the Association of American Universities.
A report recently published by Senate Democrats said the sequester could cut $2.7 billion from Head Start, special education and Title I programs at the local level. In higher education, a projected $66 million reduction in federal TRIO programs could eliminate services for 61,000 low-income students, while a $24 million cut for GEAR UP would affect 57,000 low-income youth. Pell grants are exempt from these automatic cuts in 2013.
In his Oct. 22 debate with Romney, Obama said the sequester “will not happen,” although both parties face a tight deadline to reach agreement and avoid the January 2013 cuts.
Along with the tax breaks, another program set to expire is the American Opportunity Tax Credit through which low- and middle-income families can deduct up to $2,500 of college tuition expenses annually. <Read more.>