Federal Relations

February 26, 2009

President Obama Releases FY10 Budget Blueprint

Today, President Obama released a budget outline for fiscal year 2010. The full request will likely be presented to Congress in late April. The President’s Budget Request (PBR) will feature signficant increases in student aid including a boost to the Pell grant (increasing the student maximum to $5,500 for the 2010-11 academic year) and indexing the program to the CPI plus 1% in order to provide for ongoing increases. The proposal phases out the Federal Family Education Loan (FFEL) program, through which the government subsidizes and guarantees loans made by private lending institutions. As an alternative, the government will provide all loans through the direct lending program. Elimination of the FFEL program is likely to face some pushback in Congress, as some lawmakers do not like the idea of the government increasing its role in the student loan business. The budget outline calls for a $500 million/year fund to provide grants to states to improve college graduation rates for low-income students. The budget would also make the $2,500 American Opportunity Tax Credit (provided in the Recovery Act of 2009) permanent.

Some research agencies will fair well if related PBR provisions are ultimately enacted. The National Science Foundation (NSF), for example, would receive a 16% increase in FY10 (compared to its FY08 level). The agency would receive $7 billion under the budget plan for fiscal year 2010, as compared to an estimated $6.49 billion in the pending omnibus and $6.1 billion in FY08. In FY10, NSF will focus significant resources on graduate fellowships, early career scientists, high-rish high-reward research, climate change, and education. The National Aeronautics and Space Administration would also be given an increase (5.1%) over its projected FY09 level. No specific funding details are provided regarding investments in the Department of Energy Office of Science.   Few details were provided on the National Institutes of Health, except for a recommendation that cancer research funding be increased by $6 billion.

Education has been cited by President Obama, both in his speech this week to Congress and in his budget outline, as a top priority. The FY10 budget process will play out over the course of several months, as Congress considers the President’s proposal and its own priorities. The Office of Federal Relations will provide regular updates throughout the budget process.

Office of Management and Budget FY10 Budget Request Outline