Federal Relations

June 30, 2011

Progress This Week

Congressional Schedule:  The House is in recess this week and the Senate is scheduled for recess next week (week of July 4th).  The House has another recess scheduled for the week of July 18th, and both chambers have recess scheduled for the month on August (August 8th through September 6th).

Debt Negotiations Continue:  Yesterday, President Obama used a White House news conference to urge lawmakers to “do their job” and make the “tough choices” needed to get the nation’s fiscal house in order as the August 2nd deadline for raising the debt ceiling approaches.  He said those choices might include a Medicare overhaul, cuts in defense spending, and increasing taxes.  Calling the early August date a “hard deadline,” Obama said lawmakers should scrap any recesses until they hammer out a budget deal.  The House has been in recess this week and has another recess schedule for the week of July 18th.  The Senate is scheduled to be in recess next week.

Appropriations Update:  The Senate Appropriations Committee will hold its first markup of FY12 spending legislation today, starting with the least controversial of the 12 annual bills — the measure funding veterans’ programs and military construction.   The House passed its FY12 Military Construction-VA bill on June 14th.  Additionally, the House has already approved FY12 bills for Agriculture and Homeland Security, and the Defense and Financial Services bills have been approved by committee and are ready for floor action. 

Pell Grant Program Vulnerable:  Amid a political climate in congress where virtually every corner of federal spending is in jeopardy, the Administration says it wants to protect Pell grants for low-income college students.   But the quasi-entitlement program faces a huge funding shortfall for FY12 and has become a tempting target for Republican budget hawks, who say that it is a prime example of overspending and “promises we can’t keep.”  Those close to talks on a debt reduction deal are saying little about which programs are likely to be on the chopping block, but education experts say the large increases required to sustain the Pell grant program make it particularly vulnerable.

The Pell grant program is one of the federal government’s largest education initiatives, and has been one of President’s top priorities.  The program faces a shortfall each year because it is partially funded through discretionary spending, not just mandatory dollars that would sustain it automatically.  With the economic difficulties of the past few years, more people are qualifying for the grant and more people are going back to school to earn degrees, leaving the program strapped for cash.  Program costs have more than doubled since 2008, from $16 billion to an estimated $35 billion in FY12.  In order to maintain the current $5,550 maximum award, lawmakers must make up for an estimated $11 billion shortfall.  Lawmakers in both parties are looking at proposals to restructure the Pell grant program to reduce costs, but those decisions are unlikely to be made until after the White House and congressional leaders negotiate a deficit reduction plan.

Bipartisan Support for Tax Reform:  Leaders of the Senate Finance Committee sounded a rare bipartisan note Wednesday on a tax issue.  They called for scrapping the current code and replacing it with a far simpler one that would help increase federal revenue.  Lawmakers said making it easier for individuals and businesses to pay taxes would go a long way toward closing the $300 billion gap between taxes actually owed and those that are paid.  The remarks came at the latest in a series of Senate Finance hearings on rewriting the tax code.

Congressional Pay Freeze:  Lawmakers in both the House and Senate have introduced nearly 20 pieces of legislation this year to try and slash or freeze their own paychecks for 2013.  Attacks on their six-figure salaries have become increasingly popular in recent years, as members face the wrath of constituents dissatisfied with the state of the economy and often plagued by personal financial challenges themselves.  With heated discussions under way on whether to raise the debt ceiling by August 2nd, several lawmakers have introduced bills that would nix any congressional increase in pay for every year that the government runs a deficit.  The last pay increase members received was in 2009, when they got a 2.8 percent raise.  The House and Senate have frozen their salaries for 2011 and 2012 at $174,000.  But pay raises for 2013 are still in order.  Members of Congress, under current law, automatically receive a cost-of-living pay adjustment each year unless they vote against it, as they’ve done each year since 2010. 

Immigration Reform Legislation Begins to Emerge:  On June 22 Senator Menendez (D-NJ) reintroduced the Comprehensive Immigration Reform Act of 2011 (S 1258).  As in past years, his legislation focuses primarily on issues such as border security and guest worker visas, but it also includes language that would exempt individuals with an “advanced degree” in a science, math, or engineering field from visa caps.  Meanwhile, on June 14 Congresswoman Lofgren (D-CA) introduced the Immigration Driving Entrepreneurship in America (IDEA) Act of 2011 (HR 2161), which would ease green-card applications for non-immigrants with advanced STEM degrees, but would also protect fair wages.  The primary legislative driver, however, for comprehensive immigration reform in the Congress is the Development, Relief, and Education for Alien Minors Act of 2011, also known as the DREAM Act of 2011, which does not address foreign nationals studying in a STEM field.  The DREAM Act has been reintroduced in both the House (HR 1842) and the Senate (S 952).

DOE Offers $120 Million to Support Innovative Manufacturing Processes:  As part the Advanced Manufacturing Partnership launched June 24th by President Obama, the Department of Energy is offering an investment of up to $120 million over three years to develop transformational manufacturing technologies and innovative materials.  The Advanced Manufacturing Partnership is a national effort bringing together industry, universities, and the federal government to invest in emerging technologies that will create high-quality manufacturing jobs and enhance US competitiveness.  For more information, see the funding opportunity announcement and the DOE press release.

Navy Increases Support for STEM EducationSecretary of the Navy Ray Mabus announced the Navy’s commitment to improve science, technology, engineering, and math (STEM) education.  The Navy will increase funding for STEM education initiatives from $54 million in 2010 to over $100 million by 2015. The Navy views this as an investment in its future workforce.