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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National community service programs provide financial and in-kind assistance to students, seniors, and others who volunteer in their communities in areas such as education, public safety, the environment, and health care. In 2018, federal funding for the Corporation for National and Community Service (CNCS), which operates the AmeriCorps and Senior Corps programs, totaled $1.1 billion. Participants in CNCS 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 in certain programs can earn education awards, paid from the National Service Trust (NST), in amounts tied to the maximum value of the Pell grant ($6,095 for the 2018-2019 academic year). In 2018, roughly 75,000 people participated in AmeriCorps, and 222,000 people participated in Senior Corps.
This option would eliminate all federal funding for CNCS except for funding for the National Service Trust. Currently, programs such as AmeriCorps and Senior Corps are funded through a mix of public and private resources. Each year, private businesses and foundations contribute more than $1.2 billion to CNCS's programs. In the absence of federal funding, the volunteer programs could continue to operate, but only to the extent that state and local governments and private entities chose to fund them.
Effects on the Budget
This option would reduce budget authority by $11 billion from 2020 through 2028, the Congressional Budget Office estimates. That estimate includes not only the savings in operational costs associated with terminating the volunteer programs, but also the savings in CNCS's administrative costs. Under this option, CNCS would curtail its operations in 2019 and redirect its budget authority toward shutting down. Budget authority from 2020 through 2028 would be substantially smaller than in CBO's baseline projection, but it would not be eliminated entirely because of the ongoing claiming of education awards. Former volunteers generally have up to seven years (or longer if an extension is granted) to claim those awards after completing their service. Accordingly, CBO projects continued budget authority through 2028 to fund the administration of the NST.
Provided that federal appropriations were reduced accordingly, this option would decrease outlays by $9 billion from 2020 through 2028, CBO estimates. Savings would be lower in 2020 and 2021 than in subsequent years because of the onetime costs of shutting down the agency, such as paying accrued annual leave and incurring penalties for canceling leases for office space. Drawing on budget authority provided before 2020, CNCS's outlays would decrease gradually over the period but would not be eliminated in full because of continued disbursements from the NST. If the amount of education awards owed to former participants ever exceeded the legislated budget authority, the difference would be paid for by mandatory spending, not new budget authority.
Uncertainty in this estimate comes mainly from NST's future disbursements. The amounts that would be paid out through 2028 depend on the number of current volunteers who would ultimately qualify for an education award, the share of eligible individuals who would claim an award, and the timing of those claims.
From 2022 through 2028, a funding cut of less than 100 percent would have an effect on outlays that was roughly proportional to the size of the cut. For example, if funding was cut in half rather than in full, savings over that period would be approximately half the agency's baseline funding level. In 2020 and 2021, however, a funding cut of less than 100 percent would have a proportionately larger effect on outlays. That is because costs to shut down CNCS would only occur in those early years if the option eliminated all funding for the agency. If funding was cut in half rather than in full, savings in 2020 and 2021 would be greater than half of the agency's baseline funding level.
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 received the benefits of a given service project would be better positioned than the federal government to decide whether that project was valuable enough to fund and to determine which service projects should receive the highest priority. Another argument 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 families' 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 federal funding was not replaced by other sources, this option could have adverse effects on the communities in which CNCS operates.