2001 Labor-HHS-ED Appropriations
On December 21st, 2000, President Clinton signed the last fiscal year 2001 spending bill (H.R. 4577). Included in that bill was the Labor-HHS-ED Appropriations bill (H.R. 5656), which provided $108.9 billion of funding to several key labor, education, and health programs. The Department of Education's budget will increase to $44.5 billion, a $6.5 billion (18 percent) increase from last year.
Included in the bill was the largest ever increase in the maximum Pell Grant award, bringing the total to $3,750 from $3,300 in last year's budget. The legislation also included over $1 billion in funding for the Work Study Program, $295 million for GEAR UP, $100 million for Perkins Loan capital contributions, $60 million for Perkins Loans cancellations, and $730 million for TRIO, the second largest ever increase in the program.
Also included was a provision from the House-passed Higher Education Technical Amendments bill, which extends for two years an exemption that allows some historically black colleges and universities (HBCUs) with high student-loan default rates to remain eligible for federal student-aid programs. Under the Higher Education Amendments of 1998, HBCUs with default rates higher than 25 percent for three years in a row are supposed to incur penalties; however, the education secretary can waive those penalties if the institutions produce acceptable plans to cut their rates by July 1, 2002. The provisions included in the appropriations bill will extend the deadline to July 1, 2004.
Bankruptcy Reform
President Clinton issued a "pocket veto" for the bankruptcy reform legislation (S. 3186). By waiting until the lame-duck congressional session adjourned before vetoing the bill, the President deprived lawmakers of the ability to override the veto. The bill, which the House passed the measure by a voice vote and the Senate approved by a 70-28 vote, contained a private loan amendment to provide for the non-dischargeability of certain educational loans. Another campaign for bankruptcy reform legislation will be a priority in the 107th Congress.
Digital Signatures
The E-Signature law (Pub. L. No. 106-229) took effect on October 1, 2000. The law makes online contracts and transactions legally enforceable and requires consumers to "opt in" to such electronic transactions. In addition, it provides a special one-exemption for Federal student loans from certain consumer disclosures of up to one year or until the Department of Education approves a new promissory note containing the new consumer information. The Department of Education and higher education groups have been discussing the changes that will be made to the new promissory note.
HEA Technical Amendments
Although the House passed the Higher Education Technical Amendments of 2000 bill (H.R. 4504) on June 12th, the Senate did not pass the bill before the 106th Congress adjourned.
Fraud Audit of Department of Education
Although the 106th House passed a bill on the issue of financial mismanagement at the Department of Education, the Senate did not vote on legislation requiring an audit of the Department. The House passed a measure (H.R. 4079) to mandate a fraud audit of the Department of Education and require a report within six months of the bill's enactment. Similarly, Senator Tim Hutchinson (R-AR) introduced a bill (S. 2829), which was approved by the Health, Education, Labor and Pensions Committee and was a substitute for the House bill, that requires an audit of the Department of Education. The Senate, however, did not pass the bill before the 106th Congress adjourned.
H-1B Visas
On October 17th, the President signed the H-1B Visas bill into law (Pub. L. No. 106-313). The legislation allows the Immigration and Naturalization Service to issue up to 195,000 six-year temporary visas annually for the next three years to skilled foreign workers. The bill would also exempt from the cap foreign graduates of U.S. master's or doctoral programs or foreign workers at U.S. colleges. As a result, the legislation would provide almost 600,000 new visas over the next three years to foreign workers sought out by the high-tech industry.
Privacy and Identity Protection Act of 2000
Although the House Ways and Means Committee approved the Privacy and Identity Protection Act of 2000 (H.R. 4857), neither the House nor the Senate voted on the legislation. The bill, which was introduced by Congressman E. Clay Shaw, Jr. (R-FL), would have limited the use of social security numbers by the government and private sector, specifically includes social security number account information as part of the definition of a "consumer report."
Higher Education Tax Provisions
The Education Savings and School Excellence Act of 2000 (H.R. 7), which would expand the amount that may be set aside annually to Education Savings Accounts (ESAs) from $500 to $2,000, allow ESAs to be used for elementary and secondary expenses, and remove the current 60-month limit on the deductibility of student loan interest, was not voted on during the 106th Congress. Although there was some speculation that some or all of these items would be included in a tax relief package considered by the 106th Congress, none of the proposals were incorporated into the final tax bill.