The Education Funding Trap

The debt-limit deal punted on questions surrounding education funding (and funding in general for that matter) — a disappointment to many Republicans. But this is preferable to the Trump administration’s slash-and-burn approach to the issue if the goal is actually to enact lasting, conservative education reform.

Conservatives have always been quick to point out the liberal fallacy that more education spending necessarily equates to better outcomes. On this, the evidence is clear: From 1970 to the early 2000s, spending per student on K–12 education doubled, but achievement scores remained flat. The U.S. now spends close to $12,000 per student, or $700 billion a year, on K–12 — far more than most countries — and yet ranked 27th on mathematics, 20th in science, and 17th on 2012’s international PISA tests. There are certain circumstances where higher spending can help, particularly for low-income students, but more money does not automatically improve student learning.

It doesn’t follow from this, however, that cutting education spending should be conservatives’ first priority. That seemed lost on the Trump administration, which spearheaded its education-reform efforts this spring by proposing deep budget cuts. The White House budget called for a 13.6 percent reduction in the Department of Education’s budget, or $9.2 billion in cuts. Funding for college work-study programs, student-loan forgiveness, after-school programs, teacher training, and literacy programs were on the chopping block.

This approach misses the point for three reasons.

First, spending cuts in and of themselves do not improve school quality or student outcomes. To be sure, the cuts may be to unnecessary, duplicative, and wasteful programs. American Enterprise Institute education scholar Frederick Hess recently called the student-loan-forgiveness program “ridiculously ill-conceived”; it has grown to cover Ivy League graduate students working for Uncle Sam with debts in the six figures. Ridiculous indeed. But these loans’ absence — however welcome — would do little to improve the life of a middle-school student in Mississippi or the trajectory of U.S. education more broadly.

Second, the administration’s spending cuts would poison the well for necessary and transformational education reforms, such as expanding school choice. School choice is an explicit priority of the Trump White House and of Education Secretary Betsy DeVos, perhaps more so than was the case in any previous administration, setting the stage for a massive education breakthrough. But by pairing cuts to the Department of Education with investment in a new federal program promoting school choice, the administration hung an albatross around the latter. One needs to look no further than the headlines for the administration’s budget for evidence of this. The main takeaway was how the administration wanted to cut education spending, causing liberals and moderates to focus on the cuts rather than engaging on the benefits of school choice, the impact of which is well-documented and robust.

This was unnecessary and unfortunate. School choice is primarily a state and local affair; it doesn’t require extensive federal investments that would need to be offset by cuts. The federal government’s main role is one of a bully pulpit, promoting and educating the public on the many benefits of putting choice back into the hands of students and families and providing data so that students and families can better compare schools and hold them accountable. The administration and leadership in Congress share this vision, but it would be easier to accomplish if funding levels remained unchanged, at least until the administration had built up political capital to show that its real intent is helping students, not slashing budgets.  

Third, cutting education spending does little to balance the federal budget. Education represents approximately $2 for every $100 in taxpayer receipts, and it is in no way driving up the federal debt, which is increasing almost exclusively because of growing entitlement and interest spending. That is where significant cuts must be made if the goal is to return the U.S. to a sustainable debt trajectory — a goal that I fully support and believe should be prioritized. Interestingly, the administration has shown no appetite for this type of reform, revealing that serious fiscal responsibility is not the endgame.

The U.S. federal government spends roughly $7 on the elderly for every $1 spent on children, and today’s children are set to inherit the aforementioned budgetary mess.

Lastly, an uncomfortable reminder: The U.S. federal government spends roughly $7 on the elderly for every $1 spent on children, and today’s children are set to inherit the aforementioned budgetary mess. If anything, the U.S. should consider shifting a bigger share of its resources toward programs that benefit children, not a smaller one. This is not to say that we should double down on ineffective programs or spend more for spending’s sake. But there’s plenty of evidence that the greatest returns on investment in human capital occur early on in life. Republicans should be leading the charge to reprioritize existing funding in a way that maximizes taxpayers’ return on investment and thinking through how to creatively invest in the future generation.

The White House and congressional leaders support rethinking how we do education and putting choice back into the hands of students and parents. That’s the good news. But it will be a shame if this opportunity takes a back seat to short-term, red-meat politics that prioritize spending cuts over reform when budgetary conversations resume this December.

— Abby M. McCloskey is an economist and founder of McCloskey Policy LLC. She has advised numerous Republican presidential campaigns.