The credit rating agency Standard and Poor’s last week warned that “the United States is at risk of having its pristine credit rating lowered if politicians in Washington cannot agree on a plan to bring down the nation’s deficits over the long term.” This, of course, set off a predictable hue and cry from Congressional Republicans (despite S&P;’s abysmal record leading up to the financial crisis).
“Today’s announcement makes clear that the debt limit increase proposed by the Obama Administration must be accompanied by meaningful fiscal reforms that immediately reduce federal spending and stop our nation from digging itself further into debt,” claimed House Majority Leader Eric Cantor (R-VA). House Education Committee Chairman John Kline (R-MN) even opined that one of the things Congress should cut to reassure the ratings agencies and global investors that the U.S. is serious about tackling its deficits is Pell Grants, which help low-income students pay for higher education:
U.S. Rep John Kline, R-Minn., said federal dollars being spent on the Pell Grant program have skyrocketed in recent years. Funding has increased from $16 billion in 2008 to $41 billion in the president’s 2012 budget proposal. Kline said lawmakers must act swiftly to scale back federal spending, referencing Standard & Poor’s recent decision to revise its forecast of the U.S. debt from stable to negative.
“The country is facing very, very serious problems — huge deficits, mountains of debt,” Kline said. “Markets globally are worried about what is happening in the United States. You have to take strong affirmative action to get us back on track.”…“When you are borrowing 42 cents of every dollar that the federal government spends, it’s pretty hard to justify a program that has tripled in costs in just a couple of years,” Kline said.
While the Obama administration has increased the maximum amount of aid available under the Pell Grant program, about 40 percent of the program’s growth in in the last few years is due to increased demand amidst the Great Recession. Reducing Pell Grants is also a pound-foolish way to cut the budget, as doing so hinders the country’s long-term economic competitiveness. America is now 12th worldwide in percentage of 25-to-34-year-olds with a college degree, and by 2025, according to estimates by the Lumina Foundation, our nation will be short 16 million college-educated workers.
If Kline and other Republican lawmakers were truly interested in a way to get the U.S. deficit under control they could look at CAP’s budget plan or the Congressional Progressive Caucus’ budget, which, according to the Economic Policy Institute, achieves a surplus almost two decades before the House Republican budget. Instead, they’re using Standard and Poor’s warning to advocate cutting aid for those who need it most.