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What Does the Fiscal Cliff Mean for CTE?


December 21, 2012


What Does the Fiscal Cliff Mean for CTE?

With only days to go before the country reaches the end-of-the-year fiscal cliff, there are some signs of hope that a deal might be within reach. Speaker John Boehner (R-OH) announced that the House of Representatives will be called back into session on Sunday—both President Obama and the Senate have already returned to Washington—for a last ditch effort to reach a deal in the final hours of 2012. Additionally, President Obama will meet with Republican and Democratic leaders in Congress on Friday to try to further the negotiations with congressional Republicans that have started and stalled in recent weeks.

While we do not know how this urgent situation will be resolved, it is important to know what is at stake for CTE. The looming “fiscal cliff” is comprised of both automatic tax increases and automatic, across-the-board cuts in federal funding, known as sequestration. Both the tax hikes and sequestration are scheduled to go into effect at the beginning of January if Congress and the White House do nothing.

The sequestration portion of the fiscal cliff will have the most direct impact on CTE. Under sequestration, $109 billion would be cut from both defense and non-defense discretionary funding—the part of the budget that includes Perkins funding—in 2013 alone. Because the cut would be applied across the board, it is estimated that almost every domestic program could be subject to an 8.2 percent cut. This means that CTE stands to lose $92 million in Perkins funding!

How exactly would this work for CTE? The federal government distributes Perkins funds to states (who then allocate funds to local CTE programs) twice a year in July and October. The White House Office of Management and Budget has said that Perkins, and most other education programs, would see the cut applied to the July allocation. While CTE programs may not feel an immediate impact on January 2, the cut would create a $92 million shortfall in funding for the 2013-14 school year!

Though the situation is certainly dire; it does not have to be inevitable. Tell Congress that there is still time to find a balanced approach to prevent a devastating cut to Perkins!

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