Today, President Obama released a $3.73 trillion budget request for FY12. The White House estimates that the request and projections for spending in the out-years would reduce the deficit by more than $1 trillion over the next decade. Despite reductions in overall spending, the request contains significant increases for research and development as well as some education programs.

National Institutes of Health- $31.8 billion, an increase of 3.3% over the FY10 level of $30.8 billion

White House/Office of Management and Budget HHS FY12 Budget Summary

National Science Foundation- $7.77 billion, an increase of 13% over the FY10 level of $6.87 billion –keeping the agency on track for a 10-year (FY08-FY17) doubling that is authorized in last year’s America COMPETES Act

NSF FY12 Budget Materials

Department of Energy, Office of Science- $5.4 billion, an increase of 10.2% over the FY10 level of $4.9 billion –keeping the agency on track for a 10-year (FY08-FY17) doubling that is authorized in last year’s America COMPETES Act. $550 million is also included for the Advanced Research Projects Agency-Energy (ARPA-E) to continue support for the promising early-stage research projects that could deliver game-changing clean energy technologies.

DoE FY12 Budget Materials

Department of Defense, Science and Technology- $12.2 billion for science and technology programs, which includes a 2% real growth in basic research

National Oceanic and Atmospheric Agency- $5.5 billion, an increase of 14.3% over the FY10 level of $4.85 billion

White House/Office of Management and Budget Department of Commerce FY12 Budget Summary

Department of Education-

• Continues support for a $5,550 maximum Pell Grant award, $819 above the level in 2008, largely paid for by eliminating the year-round Pell Grant and the in-school interest subsidy for graduate and professional student loans
• Invests $26.8 billion, an increase of 6.9 percent, in a reformed Elementary and Secondary Education Act (ESEA) focused on raising standards, encouraging innovation, and rewarding success, while allowing States and districts more flexibility to invest resources where they will have the greatest impact. The new ESEA directs funds to reform-oriented competitive initiatives, consolidates dozens of programs, and cuts programs that do not demand results.
• Provides $1.4 billion for new competitions, modeled on the Race to the Top initiative, to strengthen and reform early childhood education, improve district performance in elementary and secondary education, and improve outcomes in higher education

Department of Education FY12 Budget Materials

National Endowment for the Humanities- $146 million, a decrease of 13% from the FY10 level of $168 million

NEH FY12 Budget Summary

Additional information on President Obama’s FY12 budget request will be posted as it becomes available. The release of the President’s Budget Request (PBR) is the first step in appropriations process for the coming year. After Congress and the President settle on a path forward for FY11 — which began on October 1, 2010 — the FY12 process will begin to move forward.

The leadership of the House of Representatives has come forward with a second version of proposed cuts for fiscal year 2011. The new continuing resolution (CR) proposal is in response to criticism from deficit hawks within the Republican caucus who seek to fulfill a 2010 promise to reduce federal spending by $100 billion from what the President has put forward. The proposed CR cuts would be particularly significant, given that they would be spread over the remaining 7 months of FY11 as opposed to over an entire fiscal year. The House proposal cuts nearly all federal research agencies including: NIH, NSF, and DoE Office of Science. Additionally, Pell Grant levels would see a reduction of approximately 15%.

Details on select agencies/programs within House FY11 proposal:

National Institutes of Health- NIH would be cut by $1.63 billion, or 5.3%, below the FY10 level of $31.01 billion.

National Science Foundation-  NSF would be cut by $359.5 million, or 5.2%, below the FY10 level of $6.87 billion.  The proposal appropriates $5.4 billion for Research and Related Activities, which is $150 million, or 2.7%, below the FY 10 level.  For Education and Human Resources, the bill appropriates $725.7 million, which is $147 million, or 16.4%, below the FY 10 funding level.  For Major Research Equipment and Facilities Construction (MREFC), the CR appropriates $54 million, which is $63 million, or 53%, below the FY10 level. The MREFC account funds the Ocean Observatories Initiative (OOI) that UW partners on. OOI represents the largest single federal award to the UW.

Department of Energy-  DOE’s Office of Science would be funded at $4.02 billion, representing a cut of $886 million, or 18%, from the FY10 funding level of $4.90 billion. $50 million is included to sustain the new Advanced Research Projects Agency -Energy.

National Institute of Standards and Technology-  NIST would see a reduction in its overall budget of $159.5 million, or 19%, from its FY 2010 funding level of $856.6 million. The university facilities construction account within NIST is eliminated.

National Aeronautics and Space Administration-  NASA would be cut by $578.7 million, or 3.1%, below the FY10 amount of $18.7 billion.  However, NASA Science would receive $4.4 billion, Aeronautics $501 million, and Education $182 million – all the same as FY10. 

Department of Education-  Funding is not included in the House proposal to fill the Pell Grant shortfall, which means a cut of $845 from the discretionary maximum grant of $4,860 down to $4,015. With the mandatory funding, the maximum grant would total $4,705, compared to the current maximum grant for the academic year 2011-12 of $5,550. The proposal cuts funding for TRIO and GEAR UP by $24.9 million and $19.8 million, respectively, to below their FY08 levels. In addition, the Federal Supplemental Educational Opportunity Grant (FSEOG) program for undergraduates with exceptional financial need was proposed for elimination, as was the Leveraging Educational Assistance Partnership (LEAP) Program that establishes a federal-state partnership to provide financial assistance in the form of grants to students who have demonstrated financial need.

National Endowment for the Humanities- NEH would be cut by $22 million, from its FY10 level of $167 million to $145 million, a reduction of 13.2%.

A vigorous defense of investments in these programs is taking place in Washington, DC. The Senate and President are expected to challenge the House proposal. Meanwhile, today, President Obama released his FY12 budget request. Although the request makes cuts to federal spending, increases to several research agencies are included within the proposal as well as well as a reorganization of the Pell Grant program that would keep the current maximum award level of $5,550. The President’s budget request largely assumes level funding for FY11, which at this juncture, is probably a best case scenario. Additional details on the FY12 budget request will be provided shortly.

The U.S. Department of Education has determined that it can establish the Pell Grant maximum for the 2011-12 academic year at $5,550 based on the Dec. 22, 2010, Continuing Resolution (CR) that expires on March 4. The agency plans to issue the 2011-12 Pell Grant Payment and Disbursement Schedules using the $5,550 maximum Pell (same level as current year) by February 1. If Congress extends the current CR without altering spending levels, the maximum Pell award would be $5,550 and the Pell Schedules issued before Feb. 1 would stand. If Congress alters Pell spending after the current CR expires, the maximum Pell award could change and Pell Schedules could need to be revised.

Senator Lamar Alexander (R-TN) (former Secretary of Education under President George H.W. Bush) is quoted in today’s Congressional Quarterly as stating that cuts to the Pell Grant program, along with the rest of the domestic discretionary budget, are on the table as Congress now attempts to reduce spending through the FY11 and FY12 appropriations processes.

In December 2010, the former Congress passed a temporary spending measure intended to keep the government running while lawmakers try to agree on a permanent budget for the current fiscal year. The spending measure included $5.7 billion to plug a deficit in the Pell program, created by expanded student eligibility. The funding seemingly stabilized Pell for the coming 2011-12 academic year. However, Congress can undo much of that as they finalize fiscal year 2011 appropriations. Support for Pell will be at the forefront of UW advocacy efforts in the coming weeks.

On Friday Congress passed an altered version of the existing Post 9/11 GI Bill, which is designed to address issues that arose with the previous legislation. The updated bill will:

 -  provide full tuition for those attending a public school in their home state and up to $17,500 in tuition payments for those attending private schools (this number will rise annually, based on the avg. cost of tuition).

- allow funds to be used for vocational schools, distance education programs, and on-the-job training

- cover 90,000 National Guardsmen and Reserves who were previously ineligible to apply for the benefit.

- Ensure that students who are taking classes online will be awarded a portion of the housing stipend, which can total more than $2000/month

-  Allow a 10 year restriction for taking advantage of the benefit may be waived for spouses and dependents if they had to delay attending college in order to take care of a wounded service member

These changes will take affect in August and the VA is working to get their payment process streamlined by then to avoid any delay of these tuition payments – a problem that arose with the passage of the original legislation.

**12/9 Update A year-long CR passed the House on 12/8. The legislation includes $5.7 billion to close a shortfall in the Pell Grant program. The process now continues in the Senate. CR Summary**

The House of Representatives is preparing two options for a closeout of the FY11 appropriations process. One option is a year-long continuing resolution (CR) that would fund most government operations at FY10 levels. The CR would generally be a negative outcome for the research agencies and programs that UW depends on. If an amendment to the CR now under consideration in the House is successful, at least one positive outcome is possible for the higher education community. The amendment contains exceptions to level funding, including $5.7 billion to fill a shortfall in the Pell Grant program. Inclusion of the Pell exception in a CR would prevent an estimated 15% cut in award levels for the 2011-12 academic year. The second – more desirable – option for concluding the FY11 process is completion of the spending measures that Congress has been working on this year through a packaging of the bills. The package, known as an omnibus, would allow for increases to agencies of interest such as NIH and NSF. Some reports from the Hill indicate that NIH stands to receive a $750 million increase in an omnibus package. Additionally, the Pell shortfall could also be addressed through an omnibus. The ultimate decision rests with the Senate and will likely be known by December 18th when the current temporary CR expires.

A recently released CR Fact Sheet captures the Pell provision: Read more

Members of Congress returned to DC last week for a lame-duck session intended to address pressing issues, namely the need to finish the fiscal year 2011 appropriations process as well as to extend various tax cut provisions that expire at the end of the calendar year. Members spent the first week of the session largely in party caucuses, electings leaders of the Congress that will be seated in January 2011. Very little was accomplished on any of the substantive issues identified by the current leadership as under consideration. Congress will return from a week-long Thanksgiving recess on November 29th. Given the many issues to address and the intense political maneuvering underway, it is now expected that the lame-duck session will last well into December.

The federal government is currently funded through a continuing resolution (CR) that expires on December 3rd. A CR was required when Congress failed to pass a new budget in time for the beginng of fiscal year 2011 back on October 1st. The CR provides Congress additional time to produce a budget, and temporarily funds agencies/programs at last year’s levels. After the holiday, it appears that Congress will need to pass either a second short-term CR that temporarily continues government operations and rests the final outcome with the new Congress, or pass a year-long CR that essentially ends the FY11 appropriations process. The latter scenario would result in lost opportunities for research agencies (e.g. NIH, NSF) expecting increases over last year’s allocation. Further, a longterm CR would likely provide another setback to attempts to plug a $5.7 billion shortfall in the Pell Grant program. A year-long  CR would also result in the removal of all congressionally directed appropriations from the spending bills. Completion of the FY11 appropriations process through an omnibus spending bill remains a remote possibility.

The extension of Bush era tax cuts seems to be one area drawing some consensus on Capitol Hill. However, the details of a so called “tax extenders” bill remain uncertain. Several provisions of interest to the higher education community are part of the tax debate, though generally less controversial. The items include an extension of the research and development tax credit, IRA charitable rollover that would facilitate giving to our institutions, and the above the line tuition and fees deduction.

At present, Congress also seems likely to pass another fix on physician Medicare reimbursements. On November 18th, the Senate approved an extension of current reimbursement rates through December, which would provide more time to approve a longer-term solution. 

Majority Leader Reid (D-NV) is pushing to fulfill a campaign promise to bring the DREAM Act to a vote. The legislation would provide a path to citizenship for some individuals who entered the country illegally with their parents. Despite support from a majority in the current Senate, and broad backing by the higher education community, the legislation is not likely to garner the 60 votes necessary to break an expected fillibuster.

The mid-term congressional elections that took place on Tuesday, resulting in a Republican House majority and diminished Democratic Senate majority, will have a significant impact on issues of concern to the higher education community (FY11 appropriations, DREAM Act, COMPETES Act, tax policy) that were previously slated for consideration during the coming “lame-duck” session. The current Democratic leadership on Capitol Hill may decide, or be forced, to punt many legislative items to the new Congress. It is expected that the new Congress will increase efforts to constrain federal spending. How deeply those efforts impact research and student aid remains to be seen.

The Office of Federal Relations is gathering information on the likely leadership structure of the incoming 112th Congress, as well as on prospects for legislation of interest. A Federal Report will be produced and available on this website during the week of November 7th.

On November 15th, it is expected that Members of Congress will return to DC to address unfinished legislation before adjourning for the year. Several items of note are likely to considered, including additional funding to fill a shortfall in the Pell grant program. The anticipated $5.7 billion shortfall was created by increased student eligibility for the program. Without funds to close the shortfall, 9 million Pell recipients could see a 15% reduction in their awards at the beginning of next school year. However, the popularity of the Pell grant program has many on the Hill expecting the shortfall to be addressed before cuts to student awards are necessitated. What remains uncertain is exactly how and when the problem will be dealt with. Several efforts to fill the hole in the Pell grant program, by attaching provisions to larger pieces of legislation, have come up short this past year.

Aides to the current congressional leadership have indicated a desire to address the Pell grant shortfall during the post-election “lame duck” session. The session is likely to be devoted largely to completing the spending bills for FY11, of which Pell is a component. However, it’s possible that the spending bills could be tabled until a new Congress is seated in January. The House and Senate that begin work in January are likely to be significantly more inclined to hold or reduce spending levels, so the endgame for the FY11 appropriations process and Pell remain far from clear at this time.

With fiscal year 2011 set to begin on Friday October 1st and none of the 12 spending bills yet signed into law, Congress will need to pass a continuing resolution (CR) in order to keep the government functioning. A CR typically funds government operations on a temporary basis, at the previous year’s spending levels, in order to give Congress and the President additional time to complete the process.

Today, the Senate voted to advance its CR in the legislative process. During the past week, speculation circulated that Congress might add language to the CR that would fill a shortfall in the Pell Grant program. However, early indications from the Senate Appropriations Committee are that funding for Pell will not be included in the CR. The $5.7 billion Pell shortfall was created largely by increased student eligibility for the program during the economic downturn. If Congress does not address the Pell shortfall, it would result in significant decreases in student award amounts for next academic year. However, most higher education observers believe that it is not a question of whether Congress will address the shortfall, but rather through which legislative vehicle. The Pell Grant program generally enjoys wildespread support, so a significant cut in award levels seems unlikely at this point.

A summary of the special provisions added to the Senate’s CR is available below. Read more

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