Home AdvocacyPolicyWashington Notes2005 June

June, 2005 Contents

• House to Weigh in on Appropriations
• E-Rate Update
• DO IT Gains Traction in Congress
• Assistant Secretary Nominees Named at Department of Education

House to Weigh in on Appropriations

The Fiscal Year 2006 education appropriations process enters a crucial phase in June with the House Appropriations Subcommittee on Labor, Health and Human Services and Education set to approve its version of FY06 education spending legislation on June 9th and vote on the Subcommittee passed version on June 15th. The Senate has not yet initiated any action on its version of education spending for FY06 and is unlikely to do so until at least July.

In this year's appropriations process, the Enhancing Education Through Technology program (EETT), proposed for elimination in the Administration's FY06 budget, finds itself struggling against other worthwhile programs, including Medicaid, vocational education, and adult literacy programs, for a finite pot of federal funds. For example, the FY06 funding allocation to the House Appropriations Subcommittee on Labor, HHS and Education is $163 million less than last year, and included in this year's allocation is funding for new programs, such as the Medicare Prescription Drug program. House Appropriations Subcommittee Chairman Ralph Regula (R-OH) has not indicated what the funding levels for education technology will be, though the overall limited available funds bode ill for the restoration of EETT funding.

Despite the bleak funding outlook for EETT, there is some promise that members of Congress will support increased funding for the program, as demonstrated through the broad bipartisan sign-on to two Dear Colleague letters in the House and Senate. In late April, Representatives Ron Kind (D-WI) and Judy Biggert (R-IL) penned a letter to Chairman Regula and Ranking Member David Obey (D-WI) requesting support for an appropriation of $496 million for EETT for FY06, the same amount that it received last year. Representatives Biggert and Kind were joined by 52 members in support of EETT, including 17 Republicans. The full list is below (two members names were not available at the time of publication):

Additionally, in mid-May, Senators Orrin Hatch (R-UT) and Conrad Burns (R-MT) authored a letter to Chairman Arlen Specter (R-PA) and Ranking Member Tom Harkin (D-IA) of the Senate Appropriations Subcommittee on Labor, Health and Human Services and Education, calling for the restoration of EETT funding to the FY04 allocation level of $692 million. Eighteen Senators - eight Republicans and ten Democrats - signed the letter. The full list is below:

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E-Rate Update

Activity on the E-Rate program has ratcheted up significantly over the past few weeks, both in Congress and at the Federal Communications Commission (FCC). The FCC is set to launch a major new rulemaking proceeding on the program by mid-June, and will likely seek comment on significant structural changes to the program. Meanwhile, in Congress, Rep. Barbara Cubin (R-WY) and Rep. Charles Gonzalez (D-TX) have introduced legislation, H.R. 2533, to permanently exempt the E-Rate and all of universal service from a provision in the Anti-Deficiency Act (ADA) that bars federal agencies from obligating funds without sufficient cash on hand to cover those obligations. Already co-sponsored by a bipartisan group of nine other House members, H.R. 2355 aims to avoid problems similar to those caused by the FCC's decision last summer to apply the ADA provision to the E-Rate program.

In August 2004, the program's administrator shut down the E-Rate program for three months, thereby delaying E-Rate funding commitments to thousands of applicants. Their reasoning was that the program's funding commitment decision letters (FCDLs) constituted "obligations" under the ADA, and that mailing out letters would violate ADA because it had insufficient funds in its accounts to cover any further obligations. This situation was resolved, albeit temporarily, when Congress passed and the President signed in December 2004 legislation that exempted E-Rate and universal service from the ADA provision for twelve months. This exemption is set to expire in December of this year.

The House bill serves as companion legislation to S. 241, a bill introduced by Senators Olympia Snowe (R-ME) and Jay Rockefeller (D-WV) that would also make permanent the ADA exemption for universal service and the E-Rate. Over the past month, the number of cosponsors for S. 241 has swelled to 37, with many conservative Republican senators signing-on to the bill, including Senators Craig Thomas (R-WY), Mike Crapo (R-ID) and Mike Enzi (R-WY). While there are no immediate plans to move this bill soon, action is likely before the end of this year.

Also noteworthy on the Congressional front is what has not yet happened - the introduction of major E-Rate reform legislation. Despite harsh criticism for the program from House Energy and Commerce Committee Chair Joe Barton (R-TX), no legislation to alter the program significantly has yet been introduced. While there have been discussions about preparing a bill that would crack down on waste, fraud and abuse and streamline the application process, the introduction of such legislation may wait until after August.

Meanwhile, the FCC appears poised to launch a broad-based rulemaking that will likely focus not only on deterring waste, fraud and abuse and streamlining the application process, but also on improving the administration of the program. While details of what is contained in the rulemaking remain unavailable, it is possible that the rulemaking will seek responses to a proposal to change the current application driven program to a formula grant program. While a "block grant" approach could make receiving E-Rate funds easier, such a structure could disadvantage rural public school applicants, make it more difficult to track waste, fraud and abuse, and lead to running E-Rate funds through the federal appropriations process. This FCC rulemaking will likely be released by mid-June and the public comment period is likely to run through the summer.

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DO IT Gains Traction in Congress

After stalling in Congress last year, the Digital Opportunity Investment Trust (DO IT) finally appears to be making significant headway in Congress, with bipartisan support for two DOIT bills just introduced in the House and the Senate. DO IT would funnel revenue from spectrum auctions into a trust fund to be used for a variety of education technology initiatives, including the development of software-based learning models to enhance learning, the digitization of library materials, and research and development for new learning resources. The House version, H.R. 2512, is co-sponsored by Reps. Ralph Regula (R-OH), Ed Markey (D-MA), and Paul Gillmor (R-OH). The House support is particularly important given Rep. Regula's position as Chair of the House Appropriations Subcommittee on Labor HHS, and Education, and Rep. Markey's position as Ranking Member of the Energy and Commerce Subcommittee on Telecommunications and the Internet. Meanwhile, the Senate version, S. 1023, is co-sponsored by Sens. Chris Dodd (D-CT), Conrad Burns (R-MT), Olympia Snowe (R-ME), and Minority Whip Richard Durbin (D-IL).

While both versions of the DO IT bill set out the structure and requirements of the proposed Trust—including a board of directors, allowable uses for funds and annual reporting requirements—the bills differ slightly in their level of specificity of spectrum auction allocations. In particular, the House version does not contain a fixed allocation percentage, while the Senate version requires that the Treasury allocate exactly 30% of funds from all auctions of the publicly owned electro-magnetic spectrum. Other smaller differences in the respective bills also exist, but those issues would likely be easily resolved in the Conference Committee, should the bills pass.

In addition to the introduction of the respective bills in Congress, DO IT has also received significant press coverage in recent weeks, in particular with an editorial to the New York Times on May 4th, authored by former U.S. senators Gary Hart and Warren Rudman. Press coverage has focused mainly on the need to address the widening gap between America and the rest of the world with regard to scientific research and education, and the bill's ability to address those concerns by subsidizing educational and research efforts.

Despite the initial broad support for DO IT, however, the legislation will likely face significant hurdles during the 109th Congress. Of particular concern to Commerce committee members in both chambers is the fact that DO IT would authorize the use of federal funds, which will be especially difficult to accomplish given this difficult fiscal year and the bleak outlook for FY07. At this stage, however, the bills' supporters are focused on expanding the list of co-sponsors and pressing for a hearing on the House side to discuss the issue and raise awareness.

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Assistant Secretary Nominees Named at Department of Education

On May 20th, President Bush announced that he intends to nominate two education leaders for Assistant Secretary positions within the Department of Education. Henry Johnson is expected to be nominated for Assistant Secretary for Elementary and Secondary Education and Tom Luce for Assistant Secretary for Planning, Evaluation, and Policy Development. Johnson currently serves as State Superintendent of Education for Mississippi and Luce served as chairman of Just for the Kids and the National Center for Educational Accountability until late last month, when he resigned to accept his nomination.

The nominations reflect Secretary Spellings' reorganization and consolidation of several Department of Education offices. If confirmed, Johnson would head the Office of Elementary and Secondary Education, which is a consolidation of all K–12 initiatives, including the President's proposed High School Initiative. Luce would oversee the Office of Planning, Evaluation, and Policy Development, which administers the functions of the Budget Service, Office of Educational Technology, Policy and Program Studies Service, and Strategic Accountability Service. If confirmed, Luce would therefore oversee Susan Patrick, who is the Director of the Office of Educational Technology and would be responsible for education technology programs, including EETT. The press releases announcing the upcoming nominations can be found at http://www.ed.gov/news/pressreleases/2005/06/06012005b.html and http://www.ed.gov/news/pressreleases/2005/05/05202005.html.

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