Discretionary Spending Option 19
Function 500 - Education, Training, Employment, and Social Services
Eliminate Federal Funding for National Community Service
CBO periodically issues a compendium of policy options (called Options for Reducing the Deficit) covering a broad range of issues, as well as separate reports that include options for changing federal tax and spending policies in particular areas. This option appears in one of those publications. The options are derived from many sources and reflect a range of possibilities. For each option, CBO presents an estimate of its effects on the budget but makes no recommendations. Inclusion or exclusion of any particular option does not imply an endorsement or rejection by CBO.
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This option would take effect in October 2017.
National community service programs provide financial and in-kind assistance to students, senior citizens, and others who volunteer in their communities in areas such as education, public safety, the environment, and health care. In 2016, funding for the programs of the Corporation for National and Community Service (CNCS), which include AmeriCorps and the Senior Corps, totaled $1.1 billion. Participants in those national community service programs receive one or more of the following types of compensation: wages, stipends for living expenses, training, and subsidies for health insurance and child care. In addition, upon completing their service, participants of certain CNCS programs can earn education awards, paid from the National Service Trust, in amounts tied to the maximum value of the Pell grant ($5,815 for the 2016–2017 academic year). In 2015, roughly 75,000 people participated in AmeriCorps and 270,000 people in the Senior Corps.
This option would eliminate federal funding for CNCS, reducing outlays by $9 billion from 2018 through 2026, the Congressional Budget Office estimates. (That estimate includes the savings in administrative costs associated with terminating the programs.)
An argument in favor of this option is that funding community service programs at the local level might be more efficient than funding them at the federal level because the benefits of such programs accrue more to the local community than to the nation as a whole. According to that argument, the local government, community, or organization that would receive the benefits of a given service project is better positioned than the federal government to decide whether that project is valuable enough to fund and to determine which service projects should receive the highest priority. Another rationale for eliminating student-focused national service programs and the education benefits associated with them is that unlike most other federal programs that provide financial aid to students, CNCS’s education benefits are not targeted at low-income students. Participants in AmeriCorps are selected without regard to their family income or assets, so funds do not necessarily go to the students with the greatest financial need.
An argument against eliminating CNCS is that the programs provide opportunities for participants of all socioeconomic backgrounds to engage in public service and develop skills that are valuable in the labor market. In addition, if other community service programs do not take CNCS’s place, this option could have adverse effects on the communities in which CNCS currently operates.