Today, the Senate on Thursday confirmed Ashton B. Carter to be the next defense secretary by a vote of 93 to 5. The installation of the new Pentagon chief comes on the same day that the President has asked Congress for the authority to formally authorize (and increase) military action by the US against the Islamic State.
Carter, a former deputy defense secretary, and replaces Chuck Hagel in what has been a fairly swift confirmation process — the first hearings started in early February.
The Department of Education announced the maximum Pell grant levels for 2015-2016 today. The agency said the maximum award amount will be $5,775, which is an increase of $45 over the 2014-2015 award maximum.
The amount is affected by the Student Aid and Fiscal Responsibility Act (SAFRA), which was incorporated as part of Public Law 111-152. SAFRA provides for an automatic annual increase, based on changes in the Consumer Price Index—through award year 2017-2018—to the appropriated Federal Pell Grant maximum award. This change has resulted in a 2015-2016 maximum award of $5,775. The corresponding maximum Pell Grant eligible expected family contribution (EFC) for 2015-2016 will be 5198.
President Obama has officially dropped the proposal outlined in his recent State of the Union Address that would eliminate the tax advantage of 529 investment programs after facing severe push-back from lawmakers on both sides of the aisle and parents across the country.
Per the proposal, any money earned from future contributions to 529 college savings plans would have been subject to a tax. That revenue would have offset the cost of expanding the American Opportunity Tax Credit, which gives a tax break for higher-education expenses of up to $2,500 per student. Administration officials say the majority of families that would have lost a tax break on a 529 plan would have gained a break from the expansion of the AOTC tax credit. Critics warned the proposal would inequitably tax middle-class families at a time when college affordability is a significant issue.
The director of Washington State’s 529 program, called the Guaranteed Education Tuition plan (GET), shared concerns with Obama’s proposal in a Seattle Times article, which can be viewed here. The New York Times coverage of the Administration’s backpedaling can be read here.
Tonight at 9 pm Eastern, 6 pm Pacific, President Obama is scheduled to give his 6th State of the Union address to Congress. The White House has been previewing certain initiatives, such as two years of free community college and paid sick leave, in advance of the speech tonight.
Tonight, however, the crux of his speech is expected to center around his economic proposals to promote the middle class and make a case for increasing federal spending on education and technology priorities. It is unclear, however, how his proposal to handle the largest funding issue confronting this last two years in office, the return of the Sequester spending cuts, will be received. The President is expected to propose increasing federal spending above the Budget Control Act levels in part by increasing taxes for the rich – his starting position in negotiations with Republicans that will ultimately determine the size of the budget for FY16.
Obama is unlikely to call for specific increases in stringent sequesters spending caps that start again in 2016, but he could call for ways to re-direct funds within those caps or come up with new revenues. As a remedy for past sequesters, the President has suggested maintaining funding for his priorities by increasing corporate taxes mainly by closing loopholes. That plan now would almost certainly be a non-starter on Capitol Hill with Republicans controlling both chambers.
The President did preview his tax increase proposals over the weekend, which included imposing a fee on financial institutions, closing the capital gains tax loophole on inherited assets, and raising the top rate of capital gains and dividends back to the Reagan rate of 28% among others. Additionally, Obama will propose increased and streamlined tax credits for the middle class for child care, two-earner families, and retirement savings.
For higher education, the President will propose consolidating the six overlapping education provisions into just two, while improving the American Opportunity Tax Credit (AOTC) to provide more students up to $2,500 each year over five years as they work toward a college degree. This move would likley make the AOTC permanent, index it to inflation, increase refundability, and resolve a significant problem of coordination with Pell grants that disadvantages low-income students. However, it is unclear how the Lifetime Learning Credit would be handled and the impact on graduate students.
Read more about the President’s tax proposal here.
Watch the State of the Union at 9pm EST, 6 pm Pacific on most television stations tonight.
The House adjourned yesterday for the annual Republican retreat. But before they left, the House took steps to block major provisions of the president’s immigration policy announced in November of 2014. As an amendment to legislation funding the Department of Homeland Security (DHS) for FY15, the House passed a series of amendments effectively blocking Obama’s executive action to shield millions of undocumented immigrants from deportation.
The underlying DHS funding bill passed by a vote of 236-191. The House also voted on a series of amendments meant to roll back Obama’s executive actions on immigration, including a controversial measure by Rep. Marsha Blackburn (R-TN) that would kill the 2012 Deferred Action for Childhood Arrivals program. That amendment narrowly passed by a vote of 218-209.
At the conclusion of the 113th Congress, the House and Senate passed all FY15 appropriations bills but for the FY15 DHS appropriations bill in an effort to neutralize the President’s Executive Order. The FY15 DHS appropriations were put on a continuing resolution until February 28, 2015. The decision to not fully fund DHS is due in large part to the House attempted to respond in 2014, but the effort was not taken up by the Senate.
Earlier in the week, the White House had threatened to veto any legislation which negated his immigration policy, but the White House seems open to including some symbolic GOP immigration measure – although it’s unclear just how much they are willing to give.
Without new funding for the DHS, agencies such as FEMA would be prevented from distributing emergency grants to state and local governments in need in the case of a local, regional, or national disaster.
The package as passed by the House is unlikely to be taken up by the now Republican-controlled Senate. It is highly unlikely that the bill will get the 60 votes needed for cloture since the Republicans do not have a cloture-proof majority. The Senate Republicans are currently working on alternatives.
The Office of Federal Relations will continue to track this issue as it evolves.