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Category: 2014 UW Federal Agenda

And We’re Back… To Fiscal Issues

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What a difference a couple of days makes here in the nation’s capitol. On Monday, President Obama and Congress were still projecting a vote to take military action in Syria. But this morning it appears that the pause button has been pushed on that topic and lawmakers are once again turning to fiscal issues.

Late yesterday, House Republican leadership proposed a $986.3 billion short-term, stopgap spending bill (H J Res 59) that would fund federal government into FY14 at current funding levels. The proposed continuing resolution (CR) would avoid a government shut down as we quickly approach the end of the fiscal year on September 30th and would fund government through December 15th – giving lawmakers plenty of time to come to an agreement on how best to fund government for FY14.

The CR contains a handful of provisions to allow limited funding flexibility for some agencies. For example, the Customs and Border Protection and Immigration and Customs Enforcement agencies would be able to maintain current staffing levels to ensure border security operations and immigration activities continue. The CR also allows some additional funding for the Department of Interior and the Forest Service for wildfire suppression efforts, the Veterans Benefits Administration for disability claims processing, and some flexibility for federal weather satellite programs.

But it is not yet clear as to when the House will vote on the proposed CR. The House Republican caucus is divided over leaders’ plan to pair the CR with a separate resolution withdrawing funding for implementation of the Affordable Care Act in fiscal 2014. But House conservatives are not happy with the plan that they say would create yet another symbolic vote against the health care law while allowing implementation to move forward. Conservatives want the CR to block all health overhaul funding and some have also called for adding a provision banning lawmakers and staff from receiving government contributions towards their health care premiums.

Using the fiscal 2013 spending level of about $988 billion would mark a compromise, as some House conservatives want to see spending in the CR set to the $967 billion level dictated for fiscal 2014 by the Budget Control Act (PL 112-25). Senate Democrats say they are ready to move forward with a plan that runs into December, even if it is based on a simple extension of spending at the annual level used in FY13.

Meanwhile, the Bipartisan Policy Center announced yesterday that the federal government could default as early as October 18th. This matches the administration’s projection. President Barack Obama has asked Congress to raise the debt limit without any conditions and ruled out any negotiations over it after a protracted debt limit fight two years ago.

Welcome Back Congress!

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Congress returns to work today after a long summer break. When they left town five weeks ago, it looked like the legislative fall schedule would focus on domestic issues: the budget and debt limit, immigration, health care reform, and maybe even education or higher education issues. Now it appears that most of the nine working days in September (that’s right, just nine working days!) will be focused on foreign policy as Congress decides how best to handle the crisis in Syria.

This change in agenda is not all bad. Because of the Syria issue, Congress will likely approve a continuing resolution – for 60 or 90 days – without much of the anticipated drama about government shutdown as the federal fiscal year comes to a close on September 30th. The CR is expected to continue discretionary spending into FY14, likely at the current rate of roughly $988 billion annually (level funded). The stopgap is not expected to contain any controversial policy riders, but could carry some technical provisions and reauthorize some expiring programs.

Movement on the CR effectively ends any chance lawmakers had of sending stand-alone FY14 spending bills to the President’s desk for signature. While most of the annual spending bills have been approved by both the House and Senate appropriations committees, none have cleared Congress. The best hope for individual spending bills clearing is that they could be bundled together in a year-end omnibus funding measure later this year. A possible complication is the need for Congress to increase the federal debt limit to enable further borrowing and prevent defaulting on loans. That needs to happen by early to mid-October according to recent Administration comments. Given that the CR will likely run through November or December, it looks like the big domestic fiscal debate will come in October or November instead of September – barring any further foreign policy snafus.

CR and Syria

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Congress will return to the US Capitol on Monday after a long August recess period. And in the nine working days they have scheduled for September, the focus will be on the instability in Syria and on-going fiscal issues.

The House is likely to take up a short-term, stopgap funding measure – continuing resolution (CR) – next week that will fund federal government beyond into the new fiscal year beginning on October 1st. This action is necessary to avoid a government shutdown at the end of the month as Congress has been unable to come to any agreement on FY14 budget and appropriations bills. Action on a CR will delay fiscal fights until Congress decides whether to grant President Obama authority to launch a military strike against Syria.

The CR is expected to contain few, if any, controversial riders and is not expected to last more than two to three months. It’s likely to continue discretionary spending into FY14 at the current rate of roughly $988 billion – or level funding. Both parties are looking at the CR and delay in FY14 appropriations as a negotiating tool to force action to modify the sequester and increase the nation’s borrowing limit by mid-October.

Obama’s Plan for College Affordability

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Last Thursday and Friday, President Obama toured several colleges and universities touting a new plan for higher education access and affordability. The Offices of Planning & Budgeting and Federal Relations prepared a brief with additional information about this plan.

White House Releases Higher Education Proposals

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As part of the college road show President Obama is undertaking starting today, the White House has released a fact sheet on a series of proposals that the Administration will be promoting on higher education. Some of these proposals require legislative action by Congress, while some can be instituted by the Administration. Other proposals by the Administration urge colleges to take action. The set of proposals focuses on three main areas:

Using Outcome Measures to Guide Student Aid Awards and Funding to Colleges

This area encompasses several proposals, most of which are built off of expanding the Administration’s reporting under their college scorecard:

  • Expands the current college scorecard by the 2015 school year to include things like the percentage of student receiving Pell Grants, average tuition, loan debt of students, graduation and transfer rates and earnings of graduates. The fact sheet implies the Department of Education can take these steps unilaterally but the collection of some data by the Department such as graduate earnings could be problematic given current restrictions on student level data collection in the Higher Education Act. 
  • Seeks, by 2018, to tie the rating system to student aid awards by providing students attending high performing colleges with larger Pell Grants and “more affordable student loans.” The 2018 element of this proposal would require legislative action by Congress.
  • Reiterates the call for the Administration’s College Race to the Top proposal, first made as part of their 2014 budget, and calls for bonuses to be paid to colleges based on the number of Pell recipients they enroll. This would require legislative changes.
  • Requires students to complete a certain percentage of classes before receiving their full student aid (Pell Grants and loans) allocation – there is not a great amount of detail on this, but it seems to imply that Pell Grants and loans may be available for schools to draw down in some sort of installments based on completion of classes by students. This would require legislative action by Congress.

Challenging Colleges to Further Innovate

This area largely seems focused on encouraging colleges and others to do what some are already doing by calling for a greater focus on competency-based education, expansion of Massive Open Online Courses (MOOCs), expanding e-advising and other student services and encouraging dual enrollment. The Administration reiterates its support for its First in the World proposal (from its last few budgets) and the last installment of the Trade Adjustment Assistance Community College funding. The Administration also focuses on the experimental sites authority saying they will encourage “high-quality, low-cost innovations” including offering Pell Grants to high school students taking college courses and credit for prior learning. Other than seeking funding for the First in the World initiative, none of this would seem to require legislative action by Congress and some of it is just calling on actions by schools and others.

Addressing Student Debt

The Administration reiterates its proposal to expand Income-Based Repayment (IBR) to all students (regardless of when they might have first borrowed) to cap loan payments for borrowers under the program to 10 percent of their monthly income. This proposal was also made by the Administration as part of their solution to the recently enacted student loan interest rate issues. The Department of Education will also take on an outreach effort to educate borrowers about IBR. The expansion of IBR would require legislative changes.

Sources: White House, Penn Hill Group