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Category: 2015 UW Agenda

FY2015 Appropriations Season Underway

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House and Senate appropriators will begin their FY2015 work this week with the goal of moving all 12  annual spending bills through the legislative process before the end of the fiscal year on September 30th.

House and Senate appropriators are holding a trio of hearings this week ahead of next Tuesday’s White House budget release on two traditionally divisive domestic spending measures: Labor-HHS-Education and Financial Services. Two of the biggest budget questions have already been settled, with top-line discretionary spending locked in at $1.014 trillion and defense funding capped at $521.4 billion. The central question remaining is how members choose to divide the $492.5 billion reserved for domestic discretionary programs in the December budget agreement (PL 113-67) among priorities as varied as education, scientific research, health care, and financial regulation.

In other news, House Ways and Means Chairman Camp (R-MI) will unveil his tax overhaul plan on Wednesday that’s expected to lower top individual and corporate income tax rates while imposing a surtax on wealthy individuals and the biggest banks and insurers. Although Camp’s plan is aimed at being revenue neutral, it would redraw large parts of the tax code with far-reaching, high-stakes tax policy changes that will trigger a large battle between political and corporate interests. The details are part of an ambitious plan to rewrite the tax code from top to bottom that the Michigan Republican plans to offer to a Congress that appears uninterested in tackling anything that includes tough political choices.

But it is unclear as to whether Chairman Camp has support from GOP leadership to advance this sort of tax overhaul. Leaders in both chambers have all but dismissed the possibility of a tax overhaul this year since many are reluctant to take up a politically tricky tax overhaul in an election year.

Preview of President’s Budget Request for FY2015

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President Obama will release his FY2015 budget request next Tuesday. He is expected to seek a small increase in spending as called for by the December budget deal but he will avoid any “grand bargain” proposals for steep deficit cuts. Obama’s request will stick to the $1.014 billion discretionary spending caps for FY2015 set by the budget agreement (PL 113-67), which is about $2 billion more than FY2014 and would not require any across-the-board sequester cuts.

The good news for higher education and research is that the White House will also propose a $56 billion “Opportunity, Growth and Security Initiative” aimed at funding research, manufacturing, education, and other priorities. The plan, which the administration said would be paid for by closing tax loopholes and changing spending programs, aims to effectively replace the remaining FY2015 sequestration cuts for nondefense discretionary programs – the programs we care about the most. The initiative would split funding evenly between defense and domestic-focused efforts, and it would create 45 new manufacturing institutes, an efficiency program focused on modernizing the electric grid, and fresh ways to boost access to pre-kindergarten programs.

Obama will release his budget in two parts with the main budget volume, key proposals, summary tables, agency-level information due March 4th, and the historical tables and analytical perspectives volume will come the following week. Shortly after that, we will finalize the UW Federal Agenda for FY2015, which will likely focus on investing in research, access to federal student aid, reauthorization of science and higher education programs, and immigration and tax reforms.

The Week Ahead: Debt Ceiling and Military COLAs

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Both the House and Senate are in session this week. The Senate is expected to consider legislation to a repeal a cut in the cost-of-living adjustment for younger military retirees, while the House could consider debt ceiling legislation before adjourning Wednesday for a Democratic retreat. Both chamber will recess next week for the President’s Day week.

Treasury Secretary Lew told Congress on Friday that February 27th is the deadline for extending the nation’s debt limit, giving lawmakers less than three weeks to act before the government may default on payments. According to Lew, the 27th is the date when Treasury will exhaust the “extraordinary measures” it uses to stave off the need for new borrowing. While most believe that Congress will extend the nation’s debt limit without threat of government default, there is currently no agreement on how best to do that. House Republicans insist they want a policy concession from the White House to be attached to a debt limit extension, but they have not been able to agree among themselves on a provision. The suspension of the debt limit included in last December’s budget deal (PL 113-46) ended on Friday, leaving the Treasury Department to rely only on extraordinary measures to pay its bills.

White House Budget to be Released in Two Installments

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The White House has previously announced that they will submit their FY2015 budget proposal on March 4th, nearly a month later than required. Now we are hearing that they will release the budget request in two installments. The first on March 4th as previously announced, which will include top line numbers. The second and more important installment won’t be released until March 11th, and will include the budget appendix and justifications behind the top line numbers. The budget appendix is the thickest of the budget volumes, containing more detailed information on individual programs and appropriations accounts than any of the other budget documents.

The President’s budget request will be late this year due to the late work on the FY2014 appropriations, which culminated in an omnibus bill approved by Congress just last month. This delay will cause a delay in the finalizing the UW Federal Agenda as we generally wait to see what the President is requesting (or not requesting) before we make our final decisions.

This all means there is still time to weigh in on the UW’s agenda. Please get in touch with the Office of Federal Relations if there is something you would like to flag or have included in the FY2015 federal agenda.

Pell Grant Shortfall Delayed to FY2017

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Yesterday the Congressional Budget Office (CBO) released their Budget and Economic Outlook: 2014 to 2024. The deficit is expected to fall this year as the economy gains steam, but CBO also anticipates that increasing health care costs and higher payments on the national debt mean that those gains will not last. The deficit estimate sets the new baseline that CBO will use to assess the impact of legislative proposals this year. The agency now projects the cumulative deficit for 2014 to 2023 will total $7.3 trillion, which is about $1 trillion more than the $6.3 trillion estimate in May.

This new report provides a good analysis of Pell Grant funding. Last year we were all surprised to find a surplus in the Pell program after worrying that we would be facing a shortfall. The good news from the CBO report is that the surplus is still here and it’s trending larger. The CBO sees Pell Grant costs coming in about $1.7 billion lower than originally expected for fiscal year 2014. It also revised costs in future years lower than what it projected last year by about $1 billion a year. All of those figures assume that Congress keeps the current eligibility rules for the program, including the maximum grant, as they are today. Based on the CBO report, the Pell program may not see a shortfall until FY2017. EdCentral provides a great analysis of the Pell Grant surplus and what it means for future years.

This is good news for the Pell Grant program and the students who rely on it to fund their education. Closing the Pell shortfall has been a priority agenda item for UW for the past couple of years and we will continue to advocate for fund funding.