Federal Legislative Update
December 2004

December 10, 2004
December 3, 2004

December 10, 2004

News from Capitol Hill...

A Good Day for Schools! 

E-Rate Dollars To Flow Again 

At the eleventh hour — just before the 108th Congress came to a close — the Senate unanimously approved legislation (H.R. 5419) to keep E-Rate funds flowing to schools and libraries.

The E-Rate program has wired 99 percent of schools and 92 percent of classrooms to the Internet and ensured that students have the benefits of modern technology. In early August, the flow of E-Rate funds came to a screeching halt due to a government-wide accounting rule change that was implemented without thought of its impact on this hugely successful program. H.R. 5419 corrects that glitch for the next 12 months.

NEA played an active role in an extraordinary coalition of education and library advocates, state and local governments, telecommunications companies, and community development advocates that brought about this important win for local schools, libraries and communities.

The E-Rate program is the fourth-largest source of federal funds to K-12 schools. Saving this program means dollars are freed up again from local school budgets for staff, textbooks and other meaningful tools for students.

NEA's active role in achieving this victory continues its longstanding commitment to the E-Rate program and to innovation in education. NEA will continue to work with this coalition to fix permanently the accounting rule that blocked the flow of funds so that the E-Rate program — and America's schools, libraries and local communities — never again face such a crisis.

The Year's End

The 108th Congress (2003-2004) is now officially adjourned. The new 109th Congress convenes on January 4, 2005.

This legislative update will be back with new content in the new year.

From All of Us to All of You

Best wishes for this holiday season and the new year. Thank you for what you do for public education every day.

December 3, 2004
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News from Capitol Hill...

The Omnibus Spending Bill

Congress cleared an Omnibus Spending Bill for Fiscal Year 2005 (H.R. 4818-H. Rept. 108-792) November 20, on the eve of adjournment. The legislation provides even less funding for key education programs than the original House and Senate bills.

Details on education funding will follow as analyses of the bill's 3,000-plus pages are completed. This report focuses on the legislation's impact on Pell Grants.

Pell Grants To Shrink

Some 1.2 million college students will have their financial aid reduced or eliminated under the 2005 omnibus spending bill.

Congress rejects the formula freeze

The legislation allows the Department of Education to change the way it calculates the family resources used to determine Pell Grant eligibility. In a significant change from the 2004 bill, Congress did not include a key provision to freeze the way the Department calculates student eligibility and thus prevent the Pell losses.

The eligibility formula

Families are allowed to deduct state and local taxes when calculating how much income they have available to pay tuition. The Department plans to update state tax tables, arguing that the reduction in state taxes since the last update leaves more money in a family's budget to pay for college costs.

The tax table change would make it appear that families have more money available to pay for tuition than they had previously and thus it would decrease the amount of federal student aid for which families are eligible. Some analysts say, however, that the way this tax burden is measured is flawed and does not reflect actual tax increases in the past few years.

The Advisory Committee on Student Financial Assistance, which advises Congress on financial aid matters, said that under the change, about 90,000 students will lose their Pell Grants and another 1.1 million students will receive awards reduced by an average amount of $300.

Less is not more

Representative John Boehner (R-OH), chairman of the House Education and Workforce Committee, said the change would help reduce the budget deficit for the Pell Grant program and free up money to increase the maximum award in future years. The deficit, however, results from the growing number of students eligible for help.

NEA opposes a distant promise of an increase in the Pell Grant maximum award based upon disqualifying needy students, and will continue to advocate for all students' access to postsecondary education.

Social Security Offsets

An Advisory for New Employees

NEA has long argued the need for the Social Security Administration and employers to advise employees in jobs not covered by Social Security of the impact of offsets on their Social Security benefit entitlement. Now employers in non-Social Security districts must alert new employees affected by Social Security offsets.

Section 419(c) of the Social Security Protection Act of 2004 (Public Law 108-203) requires state and local government employers to disclose the effect of the Windfall Elimination Provision and Government Pension Offset to employees hired on or after January 1, 2005 in jobs not covered by Social Security. These employees also must sign a statement that they are aware of a possible reduction in their future Social Security benefit entitlement.

Employers do not have to create the notice. The Social Security Administration has produced Form SSA-1945, Statement Concerning Your Employment in a Job Not Covered by Social Security, for new employees to sign. This form, along with instructions for its use, can be found at www.socialsecurity.gov/form1945.

At Issue: Intelligence Legislation

Congress returns on December 6 to consider intelligence legislation resulting from the 9-11 Commission report.