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Letter to Selected Members of Congress on Economic Recovery Package

December 03, 2008


On behalf of the National Education Association's (NEA) 3.2 million members, we would like to offer our views as you craft an economic recovery package, either during an upcoming lame duck session or for consideration by the Obama Administration early next year.

As educators, NEA members are witnessing the impacts of the economic crisis firsthand. Schools are seeing record numbers of students who are homeless or poor enough to qualify for free school meals and record numbers of students needing donated backpacks and school supplies because their families cannot afford to buy them. Some states have already been forced to layoff school staff.

According to the Center on Budget and Policy Priorities, at least 41 states faced or are facing shortfalls in their budgets for this year and/or next year. Over half the states had already cut spending, used reserves, or raised revenues in order to adopt a balanced budget for the current fiscal year. Now, their budgets have fallen out of balance again. New gaps have opened up in the budgets of at least 31 states plus the District of Columbia just four months after they struggled to close the largest budget shortfalls seen since the recession of 2001. And these problems are expected to continue into next year. At least 16 states are cutting or proposing to cut K-12 and early education; several of them are also reducing access to child care and early education, and at least 17 states have implemented or proposed cuts to public colleges and universities.

To address these urgent needs, we strongly encourage you to craft a package that includes:

  • A temporary increase in the federal Medicaid match (FMAP). According to the National Governors Association, 17 states have experienced FMAP declines over their federal FY 2008 FMAPs. Twelve of these states had also experienced FMAP declines in the previous fiscal year. Fourteen states are projected to have FMAP decreases in federal FY 2010. A temporary FMAP increase is a proven, effective way to provide relief to states and protect the health care of millions of Americans. In fact, Congress used this same approach to help states during the 2001?02 recession, when states facing high unemployment and weak tax revenues, combined with unexpected Medicaid growth, were forced to seek serious cutbacks in Medicaid costs.

  • Job creation through investments in infrastructure, including school construction. The Economic Policy Institute (EPI) has pointed to more than $100 billion in needed repairs to U.S. public schools - well-defined projects that can be quickly implemented. EPI estimates that $20 billion in such infrastructure repairs would create 280,000 jobs.

  • An increase in the federal share of the costs of educating students with disabilities. The federal funding shortfall for the Individuals with Disabilities Education Act is straining state and school budgets and diverting resources from other critical programs. According to the National Governors Association, as a result of the subprime meltdown, the steady decline in housing values, and the rising costs of health care, state and local education budgets are under siege to cover basic operation costs, such as teacher salaries, transportation, and educational programming. Proposals to create a new glide path to attain the 40 percent federal commitment for special education cost about $19 billion over two years. This funding would go a long way to protecting elementary and secondary education from planned cuts over the next two years.

  • Funding to close the Pell Grant shortfall. The credit crisis has made it more difficult for families to qualify for student loans and access higher education. At the same time, a large and growing number of people are going back to school as a way to increase their skills and earning potential. More than 786,000 applicants used the Pell Grant program than at the same point last year. As a result, the estimated Pell Grant shortfall is $3.5 billion in FY09, even after Congress provided $2.5 billion in the Continuing Resolution. At the current rate of increase, there will be 1.2 million more Pell Grant students. Congress could fund the Pell Grant shortfall and ensure adequate federal resources are available for all eligible students.

  • Initiatives to help boost pre-k education, including a limited-time program of federal matching funds designed to help states maintain pre-k services, while creating incentives for them to maintain existing investment levels. We also suggest funding programs to ensure that job training and assistance programs provide displaced workers who want to become early educators-particularly those who already have college degrees-access to the education they need to teach PK-3 students.

  • Increases in food stamp benefits and other nutrition assistance for families struggling to survive in the face of rapidly rising food prices. According to the Center on Budget and Policy Priorities, food stamp caseloads have increased dramatically in recent months, rising by 2.6 million people or 9.6 percent between August 2007 and August 2008, the latest month for which data are available. In 25 states, at least one in every five children is receiving food stamps.

  • An extension of unemployment assistance to those who have exhausted their benefits.

Thank you for your consideration of our views on these most important matters.


Dennis Van Roekel, President