Government Relations

Government Relations Legislative Update

Government Relations Legislative Update

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

Wednesday, March 21, 2012

Federal Update for March 21, 2012

The ambitious FY13 budget introduced yesterday by House Budget Committee Chairman Paul Ryan (R-WI) proposes to cut spending significantly on a wide variety of domestic discretionary and entitlement programs, while protecting defense spending. The measure, which was being marked up in the House Budget Committee today, also calls for revamping Medicare and Medicaid, repealing health care reform, and overhauling the tax code.

As expected, the budget resolution introduced by Chairman Ryan would set FY13 discretionary spending about $19 billion below the $1.047 trillion level approved with bipartisan support in last year's Budget Control Act (BCA), with added funding for defense and cuts in domestic spending. The Department of Defense and others are advocating on behalf of their priorities and looking for an exemption from across the board cuts. If this happens, it could mean that domestic discretionary cuts will likely be further impacted. This could translate into cuts in education and research programs.

Reported by, the budget plan would set defense discretionary spending at $554 billion, or about $8 billion above the BCA level. Domestic discretionary spending would be set at $474 billion, or about $27 billion below the BCA level, says the publication.

House Appropriations Committee Chairman Hal Rogers (R-KY) told The Hill that he had hoped the discretionary spending level in the House budget resolution would be higher, but he added, "It's a workable number. We'll make it work."

Meanwhile, Senate Democratic leaders say they will stick with the agreed-to discretionary spending level of $1.047 trillion. They expect to move a budget deeming resolution soon that would enable Senate appropriators to begin moving their FY13 bills.

Regarding Pell Grants, language in a summary of the budget is unclear. The document says that the budget would place Pell on a sustainable path by limiting growth of financial aid and focusing it on low-income students who need it most. Also unclear is what the budget document means by saying the budget would consolidate job-training programs into career scholarships.

With regard to energy, the energy section of the budget summary says:

"This budget would continue funding essential government missions, including energy security and basic research and development, while paring back duplicative spending and non-core functions, such as applied and commercial research or development projects best left to the private sector."

The Department of Health and Human Services (HHS) has published the final rules on student health plans under the Affordable Care Act, the health care reform bill signed into law in 2010. The Department issued the final rules on March 16 and published them in the Federal Register today.

As reported by the American Council on Education, major provisions include:

  • Benefit caps can be no lower than $100,000 in the 2012-13 academic year and $500,000 in the 2013-14 academic year. After 2013-14, the cap will be eliminated completely.

  • The medical loss ratio (the percentage of premiums that must be spent on health care programs and quality improvement) must be at least 70 percent in 2013 and 80 percent thereafter.

  • The final rule notes that self-funded student health plans cannot be included in this regulation without a change in law. Additionally, the final rule clarifies that the student health plans of nonprofit religious institutions of higher education qualify for a one-year transition to the new contraceptive coverage requirement, similar to nonprofit employers.

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