Federal Update for May 10

The Senate will continue work on the financial regulatory bill, which Democrats hope to have passed by next week. CQToday reports that legislation extending several tax and benefit programs is likely to be next up on the legislative agenda. Along with extension of financial and health insurance benefits for the unemployed, the final bill is expected to extend several tax benefits that expired at the end of 2009, including the tuition tax deduction, the research and development tax credit, and the IRA charitable rollover. It also is expected to prevent a scheduled cut in the Sustainable Growth Rate, which affects physicians' Medicare reimbursement rates, and provide as much as $80 billion for Medicaid assistance to the states.

The House will take up the reauthorization of the America COMPETES Act (H.R. 5116), which sets policy and funding levels over the next five years for the National Science Foundation, the Department of Energy Office of Science, and the National Institute of Standards and Technology. This bill is important to the 26 institutions of the UW System and our 178,000 students in building capacity for research, educating students for the knowledge economy, and spurring the innovation pipeline. Swift congressional passage of the bill is urged.

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Senator Tom Harkin (D-IA) last month introduced legislation to provide $23 billion in emergency funding to prevent layoffs at public schools and public institutions of higher education in the wake of states' crippling budget shortfalls. The Keep Our Educators Working Act (S. 3206) would support compensation, benefits, and other expenses needed to retain existing employees and hire new ones at public educational institutions.

Senate Majority Leader Harry Reid (D-NV) has told Senator Harkin there will be an opportunity for the Senate to consider the measure, which currently has 26 cosponsors.

S. 3206 is modeled on the State Fiscal Stabilization Fund that was established under the American Recovery and Reinvestment Act. The bulk of funds would be awarded to states through a formula that considers each state's share of individuals age five through 24 and each state's share of the nation's total population.

States would be required to use the funds to restore the reductions in state funding for elementary and secondary education and for public institutions of higher education that remain for FY10 and FY11, after including the funds they received for such reductions under the American Recovery and Reinvestment Act of 2009. The $23-billion cost is the same as the level the House approved in its December 2009 jobs legislation. Both the Senate and House bills include maintenance of effort provisions.

(AAU and the UW System Office of Federal Relations contributed to this report.)