Government Relations

Government Relations Legislative Update

Government Relations Legislative Update

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

Tuesday, June 21, 2011

Federal Update for June 21, 2011

The U.S. Senate and House are in session this week.  On tap in the House:  patent reform legislation, Department of Defense FY12 appropriations bill, reauthorization of the Federal Aviation Administration and legislation dealing with the military action in Libya.  The Senate will resume consideration of the reauthorization of the Economic Development Act.  

The bipartisan group of lawmakers convened by Vice President Joe Biden to develop a short-term deficit reduction plan appears to have intensified its negotiations.  The members plan to meet three times each week, and participants say they hope to have an agreement to present to their respective caucuses by July 1, in advance of the July 4 recess.  The Treasury Department has set an August 2 deadline for raising the debt ceiling.

In the Senate, Budget Committee Chairman Kent Conrad (D-ND) continues to modify his FY12 budget resolution in order to gain support from committee Democrats.  He postponed consideration of a package in mid-May after committee Democrats, including Independent Bernard Sanders of Vermont, could not agree on a plan.  The chairman needs every Democratic vote to get the measure to the Senate floor because no Republicans on the committee are likely to support the package. reports that Senator Conrad's re-crafted proposal would still aim to reduce the deficit by $4 trillion over 10 years, but with an equal amount of spending cuts and tax increases.  The cuts would reduce funding for domestic and defense discretionary spending and mandatory spending, and the savings also include reduced interest payments on the debt resulting from the deficit-reduction measures.  The tax increases reportedly would come largely from reducing or eliminating tax loopholes. Among those that seem likely for targeting are tax breaks for the oil and gas industry.

An indication of the changing debate in Washington over tax benefits is the fact that the Senate last week approved an amendment to the Economic Development Act that would eliminate the tax credit for blending ethanol in gasoline that expires at the end of the year. Although the overall bill is not likely to pass, Politico reports that the vote opens up the discussion about reducing or eliminating other tax preferences.  "I think we're looking at everything now," said Senator Mike Johanns (R-NE). "Trying to figure out what to do with the budget has caused us all to come to grips with some things we've supported in the past, all of us."

Meanwhile, since the House passed its own FY12 budget resolution on April 15, the House is moving its FY12 funding bills based on that blueprint.  The full chamber last week approved the Military Construction-Veterans and Agriculture bills, which join the already-approved Homeland Security bill.  The Appropriations Committee also marked up the Defense and the Energy and Water appropriations bills last week.  

The Senate Appropriations Committee has held hearings on its FY12 spending bills but remains unable to move the legislation. Without a Senate-passed FY12 budget resolution, the panel lacks a top-line discretionary spending number that would allow it to allocate funding among its 12 subcommittees.  

The House Appropriations Committee on June 15 approved the FY12 Energy and Water funding bill.  The bill provides $4.8 billion for the Department of Energy (DOE) Office of Science and $100 million for the Advanced Research Projects Agency-Energy (ARPA-E).  Office of Science funding is cut by $42 million from the FY11 level and ARPA-E funding is cut by $80 million from the FY11 level.  

The bill would fund Basic Energy Sciences (BES) at $1.69 billion, an increase of $10 million from the FY11 level.  It would increase funding for Advanced Scientific Computing (up $5 million to $427 million); for Fusion (up $30.5 million to $406 million); and High Energy Physics (up $1.8 million to $797 million). However, the bill would cut Biological and Environmental Sciences by $64.7 million to $547 million, with the cut aimed at medical, climate, and atmospheric research.

The newly proposed energy innovation hubs for critical materials energy and battery and energy storage were funded at $20 million each, the same as the FY12 request.  Taking the biggest hit was Energy Efficiency and Renewable Energy (EERE), which was funded at $1.3 billion, a cut of $500 million from its FY11 level.
The FY12 Defense appropriations bill approved June 14 by the House Appropriations Committee would increase funding for Defense 6.1 basic research above both the FY11 level and the Administration's FY12 request.  

The measure would provide $2.099 billion for 6.1 basic research, which is $151.4 million, or 7.8 percent, above the FY11 estimated level of $1.947 billion, and $20 million, or 1.0 percent, above the Administration's request of about $2.079 billion.

For the broader Science & Technology (S&T) category, the bill would provide $12.195 billion, an increase of $255.4 million, or 2.1 percent, above the FY11 level of $11.939 billion, but $52.2 million, or 0.4 percent, below the Administration's request of $12.247 billion.  S&T programs include defense-wide and military service funding for 6.1 basic research, 6.2 applied research, and 6.3 advanced technology development.  

Within this total, applied research (6.2 programs) would receive $4.672 billion, a $218.8 million, or 4.9-percent, increase over the FY11 level of $4.453 billion, and $15.5 million, or 0.3 percent, below the Administration's request of $4.687 billion.  Advanced technology development (6.3 programs) would receive $5.425 billion, a $114.8 million, or 2.1-percent, cut from the FY11 level of $5.539 billion, and $56.7 million, or 1.0-percent, below the Administration's request of $5.481 billion.  

The breakout for 6.1 basic research and 6.2 applied research across the services is as follows:
Army 6.1: $456.9 million, a $53.6 million, or 13.3-percent, increase over FY11;
Army 6.2: $876.3 million, a $29.4 million, or 3.5-percent, increase over FY11;
Navy 6.1: $597.4 million, a $41.0 million, or 7.4-percent, increase over FY11;
Navy 6.2: $783.8 million, a $65.1 million, or 9.1-percent, increase over FY11;
Air Force 6.1: $518.8 million, a $18.3 million, or 3.7-percent, increase over FY11;
Air Force 6.2: $1.137 billion, a $60.7 million, or 5.1-percent, cut below FY11;
Defense-wide 6.1: $525.3 million, a $38.4 million, or 7.9-percent, increase over FY11;
Defense-wide 6.2: $3.198 billion, a $268.5 million, or 7.7-percent, cut below FY11.

The bill would fund the National Defense Education Program at $86.6 million, a cut of $7.7 million, or 8.2 percent, below FY11, and $15 million, or 14.8 percent, below the Administration's requested level of $101.6 million.

For the Defense Advanced Research Projects Agency (DARPA), neither the bill nor its report provides an overall funding figure.  The bill's accompanying report states:
 "…DARPA's mission is to maintain the technological superiority of the U.S. military and prevent technological surprise from harming our national security by sponsoring revolutionary, high-payoff research bridging the gap between fundamental discoveries and their military use…Corporate strategies have greatly improved the efficiency of DARPA's financial execution and ability to obligate funds. The Committee has determined that these efficiencies will result in cost reductions of $100,000,000 in fiscal year 2012. Therefore, the Director of DARPA shall provide to the congressional defense committees, not later than 60 days after enactment of this Act, a report detailing by program element and project the application of each detailed reduction."

Although House leaders had planned to take up patent reform (H.R. 1249) on the House floor this past week, consideration has been delayed until at least this week over the provision, Section 22, which would allow the U.S. Patent and Trademark Office (USPTO) to retain all of the patent fees it collects in a revolving fund.  The funding provision, aimed at reducing the USPTO's backlog of patent applications, is key to sustaining broad-based support for the reform bill, but House Budget Committee Chairman Paul Ryan (R-WI) and House appropriators have announced they oppose allowing the USPTO to retain its patent fees. reports that House Judiciary Committee Chairman Lamar Smith (R-TX) is working to craft a compromise "that ensures the patent office gets more money while respecting the authority of congressional appropriators."  But it is unclear if a compromise acceptable to House appropriators and Chairman Ryan would be acceptable to Senate leaders and to the broad patent reform community.

The House Education and the Workforce Committee approved legislation (H.R. 2117) on June 15 to repeal two Department of Education regulations that have proved problematic for colleges and universities.  The vote was 27 to 11, with 22 Republicans and five Democrats supporting the bill. reports that H.R. 2117 has not been scheduled for House floor action.  It adds, "If the chamber takes it up, it is likely to pass, but the legislation has less-certain prospects in the Democratic Senate."  

The bill, introduced by Rep. Virginia Foxx (R-NC), would repeal state authorization and credit hour provisions of the program integrity rules published by the Department of Education, which are scheduled to go into effect on July 1, 2011.  H.R. 2117 also would prohibit the Secretary of Education from promulgating or enforcing any regulation or rule that defines the term "credit hour" for any purpose under the Higher Education Act.

The two provisions have been strongly opposed by a majority of the higher education community as an unwarranted expansion of federal authority.  The state authorization provision is viewed as a significant intrusion into prerogatives properly reserved to the states.  The credit hour provision would establish a federal definition of credit hour, which institutions believe could open the door to federal interference in core academic decisions related to the curriculum.    

As reported previously, the UW System Office of Federal Relations has worked with the House Subcommittee on Education and Workforce Training and Wisconsin's Congressional Delegation to repeal the regulations.  Congressman Tom Petri (R-WI) is a cosponsor of the legislation.
(AAU and the UW System Office of Federal Relations contributed to this report.)