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July Federal Update

FY14 APPROPRIATIONS

The path to enacting FY14 appropriations measures is paved with legislative friction as Congress is showing no signs of undoing the sequester and the House and Senate chambers are working on vastly different overall budget numbers. At this point, there are three budgets — House, Senate, and White House — all of which assume no sequestration, but include different ways to account for the cuts in later years.

The House is advancing its FY14 appropriations bills at a $967 billion overall spending cap, while the Senate is working with a $1.058 trillion cap, which does not take into account the sequester. Ironically, both the House and Senate plans would trigger a new round of across-the-board spending reductions under sequestration because they violate the caps set by the 2011 Budget Control Act (PL 111-25). But the House GOP plan busts the caps in defense and other security measures while the Senate is expected to bust the caps in both defense and non-defense (domestic) bills. All of this is leading to a big fight on spending, which will certainly culminate in a continuing resolution (CR) before the federal fiscal year ends September 30th. Continue reading “July Federal Update”

Student Loans: Cloture Vote Fails but Senate Makes Possible Deal

The Senate failed to invoke cloture and move forward S 1238, the Keep Student Loans Affordable Act, which is a measure that would keep the Stafford subsidized interest rate at 3.4 percent for another year.

The vote was 51-49 and 60 votes are needed to invoke cloture, which would end debate on the measure.

However, later Wednesday evening, a bipartisan group of Senators, including Majority Whip Dick Durbin, announced a long-term student loan agreement.

Continue reading “Student Loans: Cloture Vote Fails but Senate Makes Possible Deal”

Senate to Try and Pass Student Loan Interest Bill (again)

Senator Majority Leader Harry Reid has scheduled a cloture vote on S. 1238, the Keep Student Loans Affordable Act, which is a measure that would keep the Stafford subsidized interest rate at 3.4 percent for another year. Over 43 Democratic Senators has sponsored the legislation including Senators Murray and Cantwell.

The vote is a cloture vote, which would end the Senate’s debate on the measure and allow the bill a straight up or down vote. A cloture vote requires 60 Senators to agree to end debate, and the legislation is not expected to get the 60 votes needed to invoke cloture.

Despite the anticipated failure of the cloture movement, Senators remain hopeful that some agreement to extend the 3.4 percent interest rate can be reached.

Senate Proposes Increase for NIH

Earlier today the Senate Labor, Health and Human Services, Education (L-HHS-ED) Appropriations Subcommittee approved by voice vote an FY14 bill that provides $164.33 billion in discretionary funding for programs under its jurisdiction, $7.8 billion higher than FY13 and above the budget caps established in the Budget Control Act.  No amendments were offered during the subcommittee markup. As you know, the House is advancing its appropriations bills at a $967 billion overall spending cap, while the Senate is working with a $1.058 trillion cap, which does not take into account the sequester. The House allocation for their Labor-HHS bill is much less than the Senate allocation, at only $121.8 billion.

A summary of the bill is up on the Senate Appropriations committee website. A few funding levels highlighted by the subcommittee include:

National Institutes of Health: The bill provides $30.955 billion, an increase of $307 million, to fund biomedical research at the 27 Institutes and Centers that comprise NIH. This level will allow NIH to allocate $40 million for the new Brain Research through Application of Innovative Neurotechnologies (BRAIN) Initiative. Other relevant NIH sections include:

  • Alzheimer’s Disease: The bill includes an $84 million increase for the National Institute on Aging, the NIH Institute with the primary responsibility for preventing, treating, and curing Alzheimer’s disease. The bill also includes $20 million for a new Alzheimer’s Disease Initiative that will strengthen dementia-capable long-term services and supports, assist caregivers of individuals with Alzheimer’s disease, and train healthcare providers on how to recognize the signs and symptoms of Alzheimer’s and manage the disease.
  • Public Access to Federally Funded Research: Four years ago, Congress required NIH to improve the public’s ability to access taxpayer-funded research by means of an online NIH repository. This effort has been highly successful. The bill includes a new provision that extends the requirement to other agencies funded in the bill.
  • Accelerating Cures: The bill includes $50 million, five times the FY13 level, for the Cures Acceleration Network, an NIH initiative intended to help speed the translation and application of discoveries that have shown signs of success at the laboratory level but have not advanced far enough to attract significant investments from the private sector.

Centers for Disease Control: The bill includes a program level of $7.023 billion, $475.6 million above FY13. The bill includes $5.8 billion in Budget Authority. Within the CDC appropriation, $20 million is included for the Advanced Molecular Detection and Response to Infectious Disease Outbreak initiative. The Education and Research Centers/AFF Program (NIOSH) is funded at $24.226 million, the same as the FY13 level. We have not seen the report accompanying the bill yet, but understand that the AFF Program is also funded at the FY13 enacted level.

Pell Grants:  The bill maintains the discretionary portion of the maximum Pell grant award level at $4,860 for the 2014/2015 school year but combined with the mandatory funding the maximum award will rise by $140 to $5,785.

Because the House of Representatives has yet to mark up its L-HHS-ED bill, it is impossible to provide a direct comparison. However, the House allocation is $121.8 billion, or 25.9 percent lower than the Senate level. The full Senate Appropriations Committee will consider the L-HHS-ED bill on Thursday morning. We will pass along additional information about what is included in the bill once it is available.

Sequester: DoD to Start Civilian Furloughs

Today, the Department of Defense (DoD) will begin implementing civilian furloughs to 650,000 civilian employees at installations across the country. The furloughs amount to a 20 percent cut in pay over the next three months. This means most furloughed employees face one day without pay for each week through the end of September.

Initially, the Pentagon projected that civilian employees would need to take 22 furlough days to meet its sequester targets. However, Secretary of Defense Hagel announced in May that the number would be reduced to 11 days.

Many federal agencies have managed to avoid furloughs and layoffs, but the DoD decided it could not meet the mandated cuts without them. The furloughs are projected to save approximately $1.8 billion

While furloughed, workers are prohibited from performing any work-related assignments while away from their jobs.

The furloughs could bolster the arguments of workers and lawmakers who oppose sequestration, tipping the scales against the automatic cuts. Or they could roll out with a whimper, further solidifying the cuts as a long-term fiscal reality for the Pentagon.

In other defense news, the Senate is beginning to focus on how the department will proceed in the next fiscal year.

Continue reading “Sequester: DoD to Start Civilian Furloughs”