Jon Fansmith: Hello, and welcome to dotEDU, the higher education policy podcast from the American Council on Education. I'm your host, Jon Fansmith, and I am joined by my co-host, Sarah Spreitzer for a dotEDU brief. I don't know if we have a special term for this, but this is where you and I just chat, right Sarah?
Sarah Spreitzer: Yes, yeah. And I actually have coffee, so maybe it's like our coffee chat.
Jon Fansmith: Oh, I like that. I do not have coffee. I already drank my coffee. But we are having this brief partly because things are happening in DC that we wanted to talk about, right?
Sarah Spreitzer: Yeah, and it's August! Why are things happening, Jon? It's supposed to be quiet.
Jon Fansmith: I don't want to say that I wield unlimited power in Washington, but I will note that when I left for vacation the infrastructure deal, everything was set to move over the next few days. As soon as I leave, it all falls apart. I return from vacation, they immediately announced there's a deal in place and things have now accelerated. So, I'm not saying absolutely there's a connection, but the numbers line up pretty close.
Sarah Spreitzer: Well, and maybe they were dragging it out while you were on vacation so you wouldn't have to actually report what was in the infrastructure bill and what was happening until you got back. So since you're now back from vacation, what's actually happening?
Jon Fansmith: So as I said, a lot's happening and actually as we record this, a lot has happened. Still more to come and we'll talk about that but what has happened is that the Senate passed the first of two parts of this big grand infrastructure plus plan. And the first part of that is infrastructure. It's a roughly $1.2 trillion bill. It doesn't spend that much new money. It actually recaptures a whole bunch of money that had previously been allocated to relief funding. But it's for hard infrastructure, basically bridges, roads, water treatment and broadband. That passed, and that passed with bipartisan support in the Senate. Republicans were supportive of this package. Democrats were supportive of this package. It went through on a standard traditional legislative process. But Democrats then took what to them is the second stage of this process in the face of Republican opposition, which is to do a budget resolution. And a budget resolution is a non-binding document. Essentially each year, each chamber of the House and the Senate are supposed to put forward a budget resolution that says, "We expect the government will take in this much in revenue under current policies. We expect that the government will spend this much under current policies, and here's the ways we would change that." It's a big 10 year forward-looking thing. It's usually pretty irrelevant to the legislative process, honestly, but it's the start of this spending process. We're now in August, the spending process has been underway.
Sarah Spreitzer: I checked the calendar, I thought we were already in the process of spending federal funds this year.
Jon Fansmith: In fact, the House passed all of their spending bills without having a budget resolution. They did that about a month ago. So we are well underway. What really the budget resolution, in this case, allows Democrats to do is unlock reconciliation, which is this budget process, special budget process, used to be relatively uncommon. It's been used a lot recently because of congressional deadlock. It allows you to pass... Yeah Sarah.
Sarah Spreitzer: Yeah. And I was going to say the key point, right, Jon is that you only need 50 votes in the Senate to pass reconciliation. Otherwise you usually need 60 votes to stop the debate.
Jon Fansmith: Yeah, so reconciliation is sort of this sneaky backdoor of law making. A budget resolution only requires a majority and it allows you to use reconciliation, which only requires a majority. And the Democrats have a three vote majority in the House and currently are tied 50/50 in the Senate with the vice president being the tie-breaking vote. So they have the slimmest of majorities but they hold the majority in both chambers. So doing a budget resolution gives them the chance to do reconciliation. The budget resolution itself was about 60 pages long, something like that. And it included the general budget resolution part, the kind of pro forma part I talked about earlier, and then the reconciliation instructions. And the trickiness of this is that doing the budget resolution doesn't actually let them spend $3.5 trillion. It has this very sort of congressional language that says each of the committees is now given a pool of money to deal with programs under their jurisdiction. So it can either be, you have to find a savings of $1 billion, which is what the revenue, the tax committee's got as instructions, or you have the authority to spend up in the Senate health education, labor committees jurisdiction about $730 billion. And so really what that does is it allows the committees to draft the actual bill tax that will let them spend out this big $3.5 trillion total when the reconciliation package is put together down the road.
Sarah Spreitzer: So it's a somewhat complicated process. And we're talking about the Senate right now, right? They're actually in town. The House left town. So how does this actually play out?
Jon Fansmith: Yeah. So the House also has to approve the Senate budget resolution. And the House will also have to do their own reconciliation bill. The two dates to keep in mind, both for the House and also for the Senate, August 23rd, the House is going to break their recess. They were actually not scheduled to have any votes until September 20th. And we're going to be out in recess until September. They're going to come back early to vote on the budget resolution. Again, this should be a pure party line vote. All the Democrats will support, likely all the Democrats will support. They can't really afford to lose more than two people. All the Republicans will oppose. They'll pass the budget resolution.
At that point, all the action moves to the committees, House and Senate. They will start likely collaborating across the chambers to put together bills that say, "Here's how we'll allocate this money we've been given under the reconciliation instructions." And those committees then have to draft the bill language and return it to technically the budget committee. But basically return that language by September 15th. That's what the budget resolution instructions tell them. So September 15th is when we should see all of the details of what that $3.5 trillion spending package looks like.
Sarah Spreitzer: And Jon, I know when we were digging through the reconciliation documents that were kind of put out by the Senate budget committee, they had a fairly detailed summary that kind of indicated what each committee was going to prioritize. So we don't know if that's going to be exactly what's in there, but do you want to say a bit about what's included in the summary for the Senate Health committee?
Jon Fansmith: Yeah. And I think that's actually a really interesting thing and it's a big conversation to get into because there's a lot, as it impacts higher ed. Before we do that, I might just touch sort of, we glossed over the infrastructure bill and truthfully, there's not a lot that's specific to higher ed in that. But there are a couple of things that are worth touching on before we move on. Again, this bill is bipartisan. This bill will pass the House with Republican votes. There's no problem. This will be enacted. And the House, they'll only do this infrastructure. They'll only bring it up when the big $3.5 trillion package is part... They're going to pair them together. But the infrastructure bill will pass, and one of the things in there is they... And part of the relief bills, they had created a program called the Emergency Broadband Benefit Program.
This is kind of similar to a program that exists for K-12 and libraries called the E-Rate Program, which essentially subsidies to low-income families, low-income school districts, things like that, that allows them to do internet connectivity. And the relief bills, they essentially created a comparable program that was eligible to college students and had bigger benefits for low income families. In the infrastructure bill they'll make that permanent. And they're keeping what's important to us, the fact that if you are eligible and you are receiving a Pell Grant, that makes you eligible to receive the bonus, the assistance. It's a slightly smaller amount of assistance. We went from $50 to $30 a month that a student or a family could get, but it's permanent. They've now made this a permanent program. So that is in many ways, the real victory, this support was very important to a lot of students who couldn't afford to either get reliable internet access or who needed help purchasing a device that they could use it for. So this is a great step forward. It's something very positive. There's a lot of other money in the broadband section. Some of it may ultimately benefit institutions. More likely we had been looking for something that was specific to higher education institutions to really address the digital divide, not just among students, but among institutions themselves with some institutions, having incredible broadband access and support, and others, not. Unfortunately, that didn't make it into the final version of the bill. There will be things that will improve connectivity, particularly for tribal areas, rural areas, underserved communities generally that may benefit institutions in those areas. But there is no specific support to those institutions. So something that may be helpful, but maybe not as directly targeted to higher ed as we would have liked. But you had asked about the reconciliation bill and that's the big one, right? That's $3.5 trillion. We had seen the proposals by the Biden administration.
Sarah Spreitzer: Yeah. And it's interesting that they're paired together. I think you mentioned that they have to move together in the House, because the infrastructure is those dollars for roads and bridges and things like that. The reconciliation is really, has the Biden administration's priorities that they've been talking about since they came into office., And that I think that the progressives have been waiting to see the Biden administration really move on. And so that's kind of why they need to move together. Right?
Jon Fansmith: Yeah. And when they did the rescue plan, that was very focused on the pandemic. And progressives I think publicly said they're disappointed at both the size of that package and that it didn't include a lot of these other things that they saw as interlinked with how people were handling the impact of the pandemic. And the Biden administration put forward two big plans, the American Jobs Plan and the American Families Plan. Parts of that jobs plan were rolled into the infrastructure bill. There's a lot of investments in the kind of hard infrastructure stuff we saw on that bill. But big portions, all of the sort of social side things were left out. And so this 3.5 trillion, it's still less than a lot of progressives would want. Senator Sanders when he put together his initial proposals, it was around 6 trillion. So you can see a much more massive scale. This is less than what they might've wanted, but it starts to cover the things that are important to them. And that's why they have said, we won't move the hard infrastructure bill through the House unless it's paired with this social infrastructure spending. And so that's why the two are linked. That's why the two will have to advance together. In terms of what's in there. Sarah, I would say I can go through the numbers. There's a lot of money, $3.5 trillion is a lot of money. There's a lot of money for higher ed. But particularly there was one thing that I think was somewhat surprising to us in your wheelhouse that we saw. And it goes back to that Senate Dem summary.
Sarah Spreitzer: One of the promises or one of the things that the administration has talked about is trying to move some sort of protection for our Dreamers or making a deferred action for childhood arrivals somewhat permanent through reconciliation. Again, because you only need those 50 votes. The Dream Act has always been bipartisan, but it's been difficult to try and move it in such a divided Congress. And so in that summary, in the instructions to the judiciary committee is that it will provide a pathway to citizenship for undocumented people who qualify. Now, there's not a lot of details beyond that. Does that capture beyond Dreamers? Does that capture essential workers, farm workers, parent arrivals. What are going to be the provisions that are actually included in there? And Jon, you and I have talked about this. One of the things that needs to happen in reconciliation is things need to abide by what's called the Byrd Rule, which means any policy that's included in there, any provisions have to have some sort of impact on the mandatory budget, it has to actually spend or cost money. And so can you get immigration legislation through under the Byrd Rule? And I think that the indication is that they're going to try for it. And obviously it will have to go through the parliamentarian, but I think that they believe that there will be some way to make this happen. And so that's very hopeful. We had a core case earlier this year that basically said folks could renew DACA, but that actually the Obama administration was wrong in the way that they created DACA, that that really needed to be done by Congress. And so this is really hopeful, I think, for our Dreamers that we might actually see some action around us.
Jon Fansmith: Yeah. And it would be kind of amazing actually, if 20 years into the introduction of the Dream Act That this is the pathway through which this finally gets achieved. It is an interesting point. The Byrd Rule is a real thing. The parliamentarian is sort of the rule keeper on that. And it's always sort of an amusing part of the reconciliation process because it's not like there are, as a clear handbook, of it always applies in this case, it would always... The parliamentarian uses essentially a combination of what the law says, what precedent determines, and then their own interpretation to come up with a decision. So, I think we are heartened by the fact that leadership in the Senate thinks that this can be included under reconciliation. It may be a little hard to see exactly how it is. They're going to have to be creative in how they do that. But hopefully it will be there. There's a bunch of other things in this bill too, that are a little bit more clear cut. That are less policy specific and really are more about spending money and much more likely to meet the Byrd Rule requirements.
Again, one of the things that's also sort of odd about this process, almost always when they do reconciliation, those instructions that are part of the budget resolution are really vague. They just say, "You have the authority to spend so much money, or you need to find so much in savings." They don't tell you how to do it or what to do or what it looks at. So the fact that the Senate Democrats put out this extensive memo detailing all the items they plan to include, it's kind of unusual. You usually don't have that much of a preview. And there's a lot of lobbying actually, once a reconciliation goes forward, about how the money will be spent and how much will be allocated.
We still don't know what the ultimate numbers will be. There's still a lot that's uncertain. The committees are going to sit down, there'll be negotiations, there'll be debates. They'll be fighting over what priorities are. But we know what the top line dollar is. Now we know, thanks to some Democrats, what they're going to put it at. For higher ed it's a huge pool of money. Again, $726 billion for all of education. Some of that is for things like universal pre-K for three and four year olds. Those will be expensive, but big ticket items, free community college, that is centerpiece of this proposal, centerpiece of the Biden plan. That will be in there. Tuition subsidies for HBCUs, TCUs, and MSIs, that was in the Biden plan. That will be in there increasing the Pell grant award. The Biden folks had proposed $1,400. You would think that's kind of the floor for what they might do in reconciliation. It might be more. We've heard indications that they're certainly looking at ways to maybe push that number up higher. And again, we're certainly hopeful that we do. We're looking to double Pell. $1400, doesn't get you there, but it certainly moves the needle. There's a lot of other things. Support for teacher preparation. The student support grants that, the Biden proposal funded $63 billion for grants to help schools get students into and through college and improve graduation completion. These are all big, big projects. I mean, $63 billion for student support funding, which there isn't a previously existing fund directly tied to that. These are things at a scale that we really haven't talked about. So lots still to be determined, but a lot on the table too. A very positive sign for higher ed. The number of things and the size of the things they're looking at addressing is in that proposal from the sentence, it's clearly front and center of what they want to put together.
Sarah Spreitzer: But you know, Jon, there were two big things that I thought were kind of surprising that weren't in there. The first was student loan forgiveness, and the second thing was raising the debt limit.
Jon Fansmith: Yeah. Those are big controversial ones too.
Sarah Spreitzer: Yeah. And this is the way to kind of get things done, right? Because you only need the 50 votes. Any thoughts on why those two big things weren't included?
Jon Fansmith: Yeah. The first one's probably easier to answer. I've had congressional staff who told me this. The reason they didn't want to put student loan forgiveness in reconciliation is student loan forgiven is one, very, very expensive. And two, they wholeheartedly believe the administration can do it without congressional action. So those two things combined, if you only have only $726 billion to spend and student loan forgiveness even at sort of a moderate scale will cost you say $400, $500 billion, you've used up the bulk of your money on just that one item. You haven't done this whole list of things, both K-12 and higher ed, that you want to address. And if you think the administration can do it without you having to spend a dime of your money, why would you possibly do that? So that made a lot of sense. I think there were certainly lots of people who were hopeful to see something like that included, but I think practically we didn't really expect to see that happen. The debt limit's way more interesting. And it's sort of hard to figure out. I think that was like a big shocker in Washington when the budget resolution came out without that in, because we are approaching the debt limit. If we hit the debt limit, I feel like we haven't talked about the debt limit in a while, but it could be potentially catastrophic for our economy if the federal government starts defaulting on its obligations. And the thought was, well, they'd put this in a budget... They don't need, Republicans might oppose doing a debt limit increase. This doesn't require Republican votes. You can do it that way. There's a couple procedural things that might have factored in here. You do deal with the debt limit in reconciliation in a way that they don't usually like to do it. They usually like to tie it to a certain date. You can't do that reconciliation.
The other thing is we're approaching the debt limit date. We mentioned earlier, the committees have to report back on September 15th. That begins a lot of the reconciliation process. They then still need to advance those bills, pass them, reconcile them. They're not going to get it done by September 20th, for instance. So we might hit the debt ceiling well before reconciliation can advance, at which point putting it in reconciliation does them no good. This being Washington, the fact that they haven't done this has spurred all sorts of theories. Probably the two most compelling ones or at least the two most popular ones, one is that this is political. It's brinkmanship. They want to force Republicans to vote on something that may harm the economy and make them take that vote a year in advance of an election. The other one is simply, it's that timing issue. Again, they have to do something. They have to do it on a faster timeframe than reconciliation will move. So they're going to try and do what they can do to get that done. So that I think is kind of what the theory is. What leadership actually thinks, I don't know. Maybe you know, Sarah. They don't talk to me as often as they talk to you.
Sarah Spreitzer: Yeah. I mean, I'm on the phone with them all the time. But I really think it's pushing everything until the fall to have more must pass bills, because we still have the appropriations bills hanging out there. We still have the National Defense Authorization Act hanging out there. We have a lot of things heading towards the late fall that are going to be must pass bills. And so I just think that they're going to have more opportunities to kind of address the debt limit and maybe they just wanted to move reconciliation independently.
Jon Fansmith: Yeah. And in a lot of ways that makes sense. For as much time as they've been in, working through the recess, a lot of these things will probably still wind up being pushed towards the end of the year like they have for the last few years, bundled up in packages. And they can always do extensions, short-term extensions to the debt limit. There's ways to get at that. I think you're totally right. I think what we're looking at is we're setting up a very, very busy fall and then a very impactful end of the year. So I guess wait and see.
Sarah Spreitzer: Yup. It's going to be an exciting fall.
Jon Fansmith: An exciting fall. And more importantly, we get no real breaks. So that's the key thing.
Sarah Spreitzer: That is. We already did vacation. We were on vacation last week.
Jon Fansmith: And the last time we did this brief, we talked about the fact that we were so excited about recess, and then they had to go and ruin that. So anyway, so that is what is happening here in Washington. We are going to try and sneak away and get some time away if Congress lets us. Doesn't look like they're going to. But thanks as always for listening. And we'll keep you updated as things happen.
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