Research & Commentary: Sequestration Impact on Education

Published October 8, 2012

In the 2011 federal budget deal to raise the nation’s debt ceiling, Congress set up automatic cuts to federal spending that would kick in if they could not agree on how to cut each department specifically. They couldn’t reach a deal, so the automatic cuts, called “sequestration,” are set to kick in on January 2, 2013.

The federal government distributes approximately 10 percent of the nation’s nearly $600 billion in K-12 education spending. Several recent reports estimate sequestration will mean about an 8 percent cut in federal education spending.

Defenders of the status quo public education system tend to view with alarm this and any other reductions in taxpayer education spending. No state or local school district wants its income reduced any more than individuals do. They make sure Congress and the public hear about all the services that will supposedly end if the country spends less on education. Education Secretary Arne Duncan said sequestration will mean firing teachers, reducing programs for poor and disabled students, and limiting after-school programs.

School reform advocates typically respond with two central facts: the past 50 years’ dramatic increase in federal education spending has failed to improve student learning, and the United States is on the verge of bankruptcy. Though no one likes to live within a tight budget, not only has the country’s education system not done so for decades, taxpayers are tapped out and there are myriad ways schools can do more with less. Schools have just not had to do so before because they could almost universally depend on increased access to taxpayer wallets.

Also, since education is primarily a state and local responsibility and federal spending forms a small portion of most school budgets, education is a prime area to find some of the savings the country must if it is to avoid economic disaster.

The following documents offer more information about sequestration’s effects on education spending from both status quo and pro-reform perspectives.


White House Outlines Impact of Looming Sequestration Cuts
The White House and Democrats are out beating the bushes for those who receive federal subsidies to support indefinitely extending and expanding them despite mandated cuts through sequestration, according to Education Week. The White House’s Office of Management and Budget has released a report estimating just what programs would be cut in each department and how much, following a similar report from Sen. Tom Harkin (D) earlier in 2012. The largest cuts would be in federal disabled and poor student programs, because that’s where the federal government spends most of its education money.

Under Threat: Sequestration’s Impact on Nondefense Jobs and Services
This estimate from Sen. Tom Harkin’s office details possible amounts of federal cuts to education, labor, and health programs, state by state. Harkin reiterates his desire that Congress reach another agreement over cutting federal spending.

OMB Report Pursuant to the Sequestration Transparency Act of 2012
This report from the Office of Management and Budget estimates how much in cuts each federal department would have to make under sequestration, the last-minute budget deal Congress passed in 2011. It estimates 8.2 percent in cuts to the U.S. Department of Education should sequestration take effect as mandated.

Note to Education Reporter: GDP Is HUGE, Just like Education Spending
Federal education spending has ballooned for decades while achievement for 17-year-olds—our schools’ “final products”—hasn’t budged, notes Neal McCluskey for the Cato Institute. Here he shows sequestration would impact only 0.84 percent of school spending after recent years’ massive increase in federal education spending.

Education Spending Doesn’t Deliver
Though spending more usually means you get something better, Washington spends huge amounts in the name of education but gets almost no improvement in return, explains Neal McCluskey in the Chattanooga Times-Free Press. This is because of a basic truth: If you give people $100 more to buy something, sellers will raise their prices $100. The buyers are no worse off, the sellers are better off, and the only losers are the people who furnished the money. In federal education spending, McCluskey says, we call these losers “taxpayers.”

FACT CHECK: Secretary Arne Duncan on Education Cuts
The Heritage Foundation’s Lindsey Burke counters Education Secretary Arne Duncan’s claims that cuts to the federal education budget would result in fewer teachers, diminished resources for poor and disabled students, and cuts to after-school programs. Even if federal education spending were to be cut 20 percent, she argues, it would only reverse a federal spending binge that has not translated into better education. “Schools would get far more bang for their bucks with flexibility than by continuing to filter money through 150 bureaucratic federal education programs,” she concludes.

Sequestration Needed for Federal Education Programs
Cuts such as those possible to federal education programs through sequestration are both necessary and overdue, the Cato Institute’s Neal McCluskey testified before Congress. Not only does the federal government have no constitutional authority to fund and administer education programs, he notes, but the past 40-plus years of federal involvement in education provide a clear demonstration of futility. He goes on to demonstrate how federal dollars and ineffectiveness plague federal education programs. Significant cuts can almost certainly be made to discretionary spending, including education, without adversely affecting the activities that federal money is supposed to advance, he concludes.


Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this and other topics, visit the School Reform News Web site at, The Heartland Institute’s Web site at, and PolicyBot, Heartland’s free online research database, at

If you have any questions about this issue or The Heartland Institute, contact Heartland education policy research fellow Joy Pullmann, at 312/377-4000 or [email protected].