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Letter to the Budget Conference Committee on Final FY14 Budget Agreement

October 29, 2013

Dear Member of Congress:

On behalf of the three million members of the National Education Association (NEA) and the students they serve, we offer our views as the Budget Conference Committee begins work on a final FY14 budget agreement and attempts to end the devastating sequester cuts.  

Washington's budget battles of the past few years have resulted in deep, damaging cuts that have fallen hard on America's children and most vulnerable families. Despite numerous bi-partisan calls for a balanced approach to reducing long-term deficits, Congress has taken a different route – embracing an austerity path that has hindered job growth and placed far too much burden on those least able to afford it: working families, students and seniors. If the sequester approach continues, 79 percent of policy or deficit savings will come from budget cuts, with just 21 percent from revenue. The United States cannot cut its way to long-term prosperity. To that end, we strongly urge the Conference Committee and Congress to strive for an agreement that meets these principles:

End Sequester-Level Cuts

We should be investing in our students’ education, not cutting it year after year.  It is long past time for Congress to reverse course from the austerity approach that included slashing education across-the-board by 5 percent in FY13 - the equivalent of cutting nearly all education programs and Head Start by roughly $3 billion. The cuts of the past few years have already taken federal education funding back to pre-2004 levels while our nation's schools are serving nearly 6 million more students since that time. 

A disproportionate share of sequester cuts have impacted higher-poverty communities and students most in need - 57,000 children have already lost critical seats in Head Start classes, schools served by Impact Aid have seen drastic reductions in funding, and additional harmful impacts are being felt in classrooms nationwide. 

The budget cuts have been harmful not only to students but more broadly to Non-Defense Discretionary (NDD) programs that play a vital role in the health and well-being of communities nationwide. Besides depriving children of needed educational opportunities, the cuts have prevented low-income seniors from receiving meals and hindered scientific and medical research. NDD programs have been cut dramatically and disproportionately in recent years, with funding poised to be nearly 18 percent below 2010 levels, adjusted for inflation, as a result of cuts beginning in 2011, the Budget Control Act and sequester. 

It is long past time to end the indiscriminate sequester cuts and to take a balanced, reasonable approach to addressing our nation’s fiscal challenges.  If Congress chooses to cancel sequester cuts to Defense, the same dollar-for-dollar protection should be provided to NDD. 

Close Costly Corporate Tax Loopholes

Congress could go a long way toward replacing the sequester with additional revenue, including closing corporate tax loopholes and making the wealthy pay their fair share.  The cost to taxpayers of offshore tax-avoidance by corporations is estimated to be nearly $100 billion a year, according to academic experts; all told, U.S. companies have almost $2 trillion in profits offshore. Tax loopholes and budget cuts are inextricably linked, and sometimes the trade-offs can be startlingly clear. Eliminating the "carried interest" tax break given to hedge fund managers, which allows them to cut their tax rate in half, could save $1.7 billion - which would account for more than half of the cuts to education in FY13.  Restoring the 57,000 students’ seats lost in Head Start because of the sequester would cost roughly $400 million, nearly all of which ($370 million) could be raised by ending the special tax treatment enjoyed by the owners of private jets, for example.

Protect Medicaid, Medicare and Social Security

Educators strongly believe that cuts to Medicaid, Medicare and Social Security benefits should not occur, and health care costs should not be shifted to beneficiaries.  Currently, Medicaid coverage is used by 31 million children, and serves half of the nation’s low income children.  As the epidemic of child poverty spreads in our country, it is the responsibility of Congress to ensure these disadvantaged children are not left more vulnerable by cutting Medicaid.  In addition, Congress should avoid any changes to Medicaid which would shift more costs to states.

The same goes for those relying on Medicare and Social Security.  Social Security is the cornerstone of economic security for nearly 54 million Americans.  It belongs to the people who have worked hard all their lives, contributed to the program, and relied on the promise that they and their family will have a safety net when they need it. Even though the benefits are modest – averaging $14,000 a year – they represent more than half the income for six out of ten recipients.  Likewise, to ensure the economic security of seniors, Congress must avoid any cost shift to Medicare beneficiaries that would cause their health care costs to rise.  

We urge you to keep these principles in mind as you work toward a final FY14 budget agreement. To date, far too much in budget savings has come from cutting critical investments that grow our economy and help everyday Americans.  It is time to put politics aside, do what is right for our nation, and chart a responsible fiscal path, that includes investments in our future, including education. We look forward to working with you in this endeavor.  


Mary Kusler
Director, Government Relations