Government Relations

Government Relations Legislative Update

Government Relations Legislative Update

Updates on state and federal issues relating to the UW System.

Thursday, April 7, 2011

Federal Update for Thursday, April 7, 2011

Negotiations on the FY11 continuing resolution (CR) needed to fund the government for the remaining six months of the fiscal year continue.  Failure to reach agreement would lead to a government shutdown at midnight Friday, when the current CR expires.  The President said earlier this week he would not sign another short-term CR without a deal on the final FY11 funding bill.  The President's stance, along with the Speaker's latest proposal for an additional $7 billion in cuts, sets the stage for an intense period before government funding runs out Friday.

Meanwhile, House Republicans have offered a one-week CR that includes another $12 billion in discretionary spending cuts and full-year funding for the Pentagon. Senate Democrats and the President appear unlikely to support it.  

According to AAU and AASCU, so far, no information from federal research and education agencies have been received about what procedures they would follow if there is a government shutdown.  Information will be provided if, and when, it becomes available.  

The House Budget Committee began consideration today of the draft FY12 budget resolution introduced Tuesday by Committee Chairman Paul Ryan (R-WI). Although Democrats are offering amendments to increase funding for specific programs—such as an amendment by Debbie Wasserman-Schultz (D-FL) to retain current funding for NIH—the Committee is expected to approve the plan largely as is.  The package will be considered on the House floor by next week.

Chairman Ryan's budget plan proposes to save about $6 trillion over the next 10 years through a combination of discretionary spending cuts and, most controversially, significant changes to Medicare and Medicaid.  The plan also calls for simplifying the tax system and reducing tax rates, but does not endorse higher tax revenues.

Senate Budget Committee Chairman Kent Conrad (D-ND) criticized the plan for not cutting defense spending or calling for higher tax revenues, expressing support for a plan closer to the recommendations of the National Commission on Fiscal Responsibility and Reform, on which both he and Rep. Ryan served.  The commission plan calls for a combination of spending cuts, a simplified tax system that brings in added revenue, and more modest alterations in entitlement programs, for total savings over 10 years of $4 trillion.

For non-security discretionary spending, Chairman Ryan's plan would cut FY12 spending below FY08 levels, where they would be held for five years, with inflation increases thereafter.  The proposal accepts the President's FY12 plan for defense, cutting a net $78 billion in FY12 and then limiting growth to inflation.  It would not cut spending in the Departments of Homeland Security and Veterans Affairs.

Pell Grants have been singled out in the plan for cuts, with a call for reducing funding to "pre-stimulus levels."  It is not clear if this means reducing the maximum award back to the FY08 level of $4,731 (the maximum award currently is $5,550) or by bringing total spending in the program back to the FY08 level of $16.3 billion.  By comparison, the Administration requested $41 billion for Pell Grants in FY12 in order to maintain the maximum grant.

While it contains significant discretionary spending cuts overall, Rep. Ryan's budget appears to be silent on NIH and other research funding, except for energy research, where it differentiates between basic and applied research.  The document says, "This budget would continue funding essential government missions, including energy security and basic research and development, while paring back spending in areas of duplication or non-core functions, such as applied and commercial research or development projects best left to the private sector."

UW System President Kevin Reilly has joined his colleagues in signing a letter to Commerce Secretary Gary Locke expressing university leaders' commitment to advancing regional and national economic development.  
(AAU and the UW System Office of Federal Relations contributed to this report.)