Government Relations

Government Relations Legislative Update

Government Relations Legislative Update

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

Monday, December 19, 2011

Federal Update for Monday, December 19, 2011

President Obama is expected to sign into law this week a $915 billion "megabus," a negotiated package of spending cuts and policy riders that won largely bipartisan support in Congress last week.

The Senate cleared the conference report for the spending agreement on the heels of the House adopting it Friday. Both chambers also cleared a stopgap funding measure to continue current funding through December 23, and Obama signed it into law over the weekend. The final package completes the work on the fiscal 2012 appropriations bills. (In November, a minibus containing three annual spending bills was enacted.)

Of interest to colleges and universities:

The House summary says that the final Labor-HHS-Education section of the omnibus bill would provide a total of $156.3 billion, which is a cut of $1.1 billion, or 0.7 percent, from the FY11 level. This section of the conference agreement (Division F) includes a 0.189 percent across-the-board cut in discretionary spending, except Pell Grants.

National Institutes of Health (NIH):
The conference agreement says NIH would receive $30.69 billion in FY12, an increase of $1.7 million over FY11. However, the actual total for the agency is about $30.64 billion, an increase of about $240 million over FY11. The difference is that the FY12 bill does NOT include the usual transfer of $300 million from NIH to the Global HIV/AIDS program (that funding is included in the State-Foreign Operations portion of the omnibus), but the total is affected by the across-the-board cut in the bill, which reduces NIH spending by $60 million.

The Association of American Medical Colleges reports that the agreement includes language to create the National Center for Advancing Translational Sciences (NCATS) and eliminate the National Center for Research Resources (NCRR), transferring the various NCCR programs to other institutes and centers. The conferees also provide NCATS with up to $10 million for the Cures Acceleration Network. Additionally, the agreement reduces the salary cap on extramural grants from Executive Level I ($199,700 in 2011) to Executive Level II ($179,700).

Student Aid and Higher Education Programs:
The conference agreement maintains the maximum discretionary Pell Grant award at $4,860 (total maximum award, including mandatory funding, remains at $5,550). The agreement also level funds the Supplemental Educational Opportunity Grant program at $735 million, Federal Work-Study at $978.5 million, GEAR UP at $302.8 million, and Graduate Assistance in Areas of National Need (GAANN) at $30.9 million. Title VI International Education programs are cut by $1.55 million to $74.2 million ($66.7 million for domestic programs; $7.5 million for overseas programs). TRIO receives $841.5 million, an increase of $15 million. (NOTE: These totals do NOT reflect the 0.189 percent across-the-board cut.)

To help address the shortfall in the Pell Grant program, the agreement, beginning July 1, 2012, makes the following changes:
  • Limits Pell Grant eligibility to the equivalent of six years or 12 semesters of full-time enrollment. The current limit is nine years or 18 semesters. The change applies to students already receiving Pell Grants. There is no grandfather clause. For example, if a student has received 11 semesters of Pell as of July 1, 2012, the student will be eligible for only one more semester.)
  • Lowers the family income level at which a student automatically receives the maximum Pell Grant award from the current $32,000 down to $23,000.
  • Raises the minimum eligibility level from five percent to 10 percent of the maximum Pell Grant award. In the past, students who qualified for a minimum Pell Grant award were eligible to receive five percent of the maximum award (i.e. five percent of $5,550 or $277). Recent law changed the formula so that all students who are eligible to receive between five percent and 10 percent of the maximum award automatically receive the minimum award of 10 percent (or $550). The conference agreement eliminates that bump, so only students who are eligible to receive at least 10 percent of the maximum award will receive a Pell Grant.
  • Amends requirements related to the ability to benefit so that students without a high school degree or GED are only eligible for a Pell Grant if they have completed secondary school in a home-setting. Students enrolled prior to July 1, 2012, remain eligible for aid.
  • Suspends for two years the federal government's practice of paying the interest on subsidized loans during a six-month grace period after a student stops attending school.
In addition, the conference agreement:

Eliminates the Javits Fellowship program, merging it into the GAANN program; and

Changes the index rate for special allowance payments on outstanding loans held by student loan lenders from the Commercial Paper (CP) Rate to the London Interbank Offered Rate (LIBOR) index. Currently, lenders (who still hold loans originated under the Federal Family Education Loan program) earn a market rate based on a statutorily set formula pegged to the CP rate. However, the LIBOR index is the global market index upon which the majority of student loans are financed.

National Endowment for the Humanities (NEH):

NEH is funded at $146.26 million, which is a cut of $9 million, or about six percent, from the FY11 level. The final FY12 total is essentially a split between the Senate mark of $155 million and the House mark of $135 million. The conference agreement urges NEH to provide no less than 40 percent of program funds "to support critical work of state humanities councils," provides $3 million for the We the People initiative, and encourages NEH to work more closely with Native American communities.

Department of Energy (DOE):

The DOE Office of Science receives $4.89 billion, a $50 million, or one-percent, increase above the FY11 level of $4.84 billion. ARPA-E receives $275 million, a $95 million, or 53-percent, increase over the FY11 level.

Department of Defense (DOD):
Funding for DOD 6.1 basic research is significantly increased to $2.117 billion. This is $169.4 million, or 8.7 percent, above the estimated FY11 level of $1.947 billion, and $38.0 million, or 1.8 percent, above the Administration's request of about $2.078 billion.

For the broader Science & Technology (S&T) category, the conference agreement provides $12.428 billion, an increase of $488.8 million, or 4.1 percent, from the estimated FY11 level of $11.939 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) receives $4.748 billion, a $295.4 million, or 6.6-percent, increase from the estimated FY11 level of $4.453 billion. Advanced technology development (6.3 programs) receives $5.563 billion, a $24.0 million, or 0.4-percent, increase above the estimated FY11 level of $5.539 billion.

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