Legislators in our nation’s Capitol recently spent the New Year holiday hammering out a deal to avoid the fiscal cliff. Although major education cuts were avoided for now, what are the long-term impacts and what progress was actually made?
According to a recent article from Inside Higher Ed (http://www.insidehighered.com/news/2013/01/02/fiscal-cliff-deal-averts-across-board-spending-cuts), the agreement gives congress two months to cut approximately $6 billion from the federal budget. The current bill averts tax hikes for all but the wealthiest Americans as the Bush-era tax cuts expire. The deal also extends the American Opportunity Tax Credit, a partially refundable $2,500 tax credit for college tuition, for five years. The credit was initially part of the 2009 stimulus bill, and Obama promised during the campaign that he would make the tax credit permanent.
However, many educators are anxious over what the future may hold for their institutions. Is this anxiety founded? To attempt to answer this question we have put together a list of the potential cuts and what they could mean.
While some concern is clearly warranted, given the widespread nature of these cuts, it is important to note that the fiscal cliff is somewhat of a misnomer. The imagery of naming these spending cuts and tax hikes a cliff suggests a sudden and extreme implementation of the effects discussed above. Rather, the spending cuts are due to take effect over the course of the year, not to be fully implemented until fall of 2013. Even if no consensus is reached in the remainder of 2013, there is still time for lawmakers to agree upon a method of approach that would severely limit the scope of the budget reduction measures. We at ProctorU certainly hope that this will be achieved.