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Category: Grants

Three Week Deal…Some Ancillary Fixes

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As part of the three week deal signed into law on Saturday, the measure (H.J.Res. 28) would reopen the nine Cabinet departments and several independent agencies closed during the shutdown through February 15. Beyond funding these agencies, there were other significant items included in this agreement.

Back Pay

Federal employees will receive back pay as part of the agreement. Most employees should be expect to receive their two missed paychecks by the end of the week. Government contractors may or may not receive missed pay depending on the nature of their contract. States or grantees that helped fill the gap during the shutdown can expect to be reimbursed.

Conference Committee

As part of the agreement, the House and Senate will convene a conference committee to work out a deal on FY 2019 Homeland Security spending, including the fate of the Administration’s demand for $5.7 billion for border wall construction, which is spending Congressional Democrats have long opposed.

Pay-Go

Under the Pay-As-You-Go Act of 2010 (PL 111-139), the White House Office of Management and Budget (OMB)  is supposed to issue a report within 14 days after the end of a Congressional session outlining whether enacted laws added to the deficit over five or 10 years. If so, then the OMB has to implement across-the-board cuts to any programs not exempt from the statute, to eliminate the excess.

Routinely, since the 2010 law was enacted, Congress has simply decreed that certain pricey provisions will not be added. For example, Congress removed the impact of the $1.5 trillion, 10-year tax cuts from the OMB’s calculations as part the 2017 stopgap appropriations bill both were signed into law the same day.

The stopgap spending bill includes provisions delaying roughly $800 million in spending cuts, mainly (about 90 percent) impacting Medicare. Because Congress did not act in time, the OMB should have had to implement the cuts, but the shutdown delayed implementation.

That Pay-Go “debit” will pop up again next year unless Congress eliminates it once again on any FY 2019 final package. A House-passed, $271.8 billion package (HR 648) of six appropriations measures would have wipe out the scorecard’s existing debit, so only future legislation increasing deficits would count for the OMB’s calculations.

 

House Spending Bill Includes Helpful Language on F&A

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The House spending bill that would fund the National Institutes of Health (NIH) in FY2018 includes helpful language on the facilities and administrative (F&A) costs issue. The bill includes the following language on the issue:

In making Federal financial assistance, the NIH shall continue to apply the provisions relating to indirect costs in part 75 of title 45, Code of Federal Regulations, including with respect to the approval of deviations from negotiated rates, to the same extent and in the same manner as the NIH applied such provisions in the third quarter of fiscal year 2017. None of the funds appropriated by this Act may be used by the NIH to develop or implement a modified approach to such provisions, or to intentionally or substantially expand the fiscal effect of the approval of such deviations from negotiated rates beyond the proportional effect of such approvals in such quarter.

The measure is scheduled to be taken up by the House Labor-HHS-Education Appropriations Subcommittee this afternoon.  UW Federal Relations will provide additional updates.

 

Administration’s FY2018 Budget Would Restrict F&A, Contains Salary Cap

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Two provisions of note in the President’s Budget released Tuesday:

Within the NIH section of the Major Savings and Reforms provision, the Budget includes an indirect cost rate for NIH grants that will be capped at 10 percent of total research. This approach would be applied to all types of grants with a rate higher than 10 percent currently and will achieve significant savings in 2018. It would also bring NIH’s reimbursement rate for indirect costs more in line with the reimbursement rate used by private foundations, such as the Gates Foundation, for biomedical research conducted at U.S. universities. In addition, the Budget proposes that NIH will streamline select Federal research requirements for grantees through targeted approaches. In tandem, the Budget supports burden reduction measures that will further reduce grant award recipient costs associated with research.

In the Budget’s Appendix document (on page 480 under general provisions), Section 202 proposes to lower the NIH allowable salary cap from the current Executive level II (2) to Executive level V (5). If the this recommendation is enacted, the cap will drop to $151,700, which is a 21% cut in currently supported salary levels.

FY 2017 Omnibus Released

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At 2 am last night, House and Senate appropriators released the FY 2017 Omnibus, which  comprises the 11 unfinished FY 2017 appropriations bills, providing fresh spending instructions for nearly every corner of the federal government and formally appropriates more than $1 trillion in discretionary spending for FY 2017, in keeping with the spending limits agreed to last year. A high level overview is below.

Overall, the FY 2017 Omnibus provides an annualized total of $1.07 trillion in base spending for FY 2017, or $1.16 trillion including Overseas Contingency Operations (OCO) funding. Beyond the top line, and widely reported, the FY 2017 Omnibus includes a $2 billion increase to NIH or a 6.2 percent increase over current levels. The deal includes an extra $1.5 billion to enhance border security, but there is no money to begin construction of Trump’s wall along the Mexican border.  Additionally, appropriators absolutely rejected about $18 billion in cuts to domestic discretionary programs that Trump had suggested to avoid further expanding the deficit in his FY 2017 supplemental request. To boost funding for the military and border security, lawmakers increased by $15 billion the OCO spending, which does not count against statutory budget cap.

While the budget numbers will look big on paper, they will have less meaning in the real world because most of the money to be formally appropriated has already been spent, since there are only five months remaining in the current FY 2017, which runs through Sept. 30.

The most recent stopgap (H.J.Res. 99), enacted Friday, keeps the government open through May 5. The Omnibus legislation could see a House could vote as soon as Wednesday. Once the Omnibus passes the House, it will move on to the Senate.

The legislation did resolve a significant amount of big political sticking points, including:

  • provide a permanent fix for a depleted health fund needed by thousands of retired coal miners;
  • shore up Puerto Rico’s troubled Medicaid program with an extra $295 million;
  • provide $2 billion in disaster relief for California, West Virginia, Louisiana and North Carolina;
  • combat wildfires with an extra $407 million;
  • $68 million to reimburse local law enforcement agencies for the costs of protecting Trump and his family, predominantly in Manhattan;
  • provide $100 million to combat opioid abuse; and
  • preserve federal funding for Planned Parenthood.

 

 

Labor-H

                Health Provisions

  • NIH — $34.1 billion (+$2.0 million)
    • Fogarty Center receives $72,213,000 (+$1.7 million)
  • AHRQ received: $324,000,000 (Slight cut of ~$8 million)
  • SAMSHA — $3.6 billion (+ $130.5 million above the previous Administration’s budget request. Includes an increase of $150 million for treatment of opioid and heroin programs)
  • CDC – $7.3 billion (+ $22 million above the fiscal year 2016 enacted level. This includes $6.3 billion in appropriated funds, as well as $891 million in transfers from the Prevention and Public Health Fund.)
    • NIOSH– $335.2M (about + $4M)
  • ERC Program $29 million (+$500 thousand)
  • AFF Program $25.5 million (+$500 thousand)
    • Chronic Disease Prevention — $1.112 billion ($777.6 million in discretionary, $338.0 million in transfers)
  • Prevention research centers — $25.5 M
  • Worker Health will receive “not less than FY16 levels”
  • HRSA — $6.4 billion for HRSA (+ $77 million)
    • Health Professions Title VII – $301M (- , but language below in dentistry
    • Nursing Title VIII — $229 million (level)
  • National Institute of Nursing Research receives $150,273,000 for nursing research.

Report language of note:

NIH

“Funding from the 21st Century Cures Act was previously appropriated for fiscal year 2017 by section 194 of the Continuing Appropriations Act, 2017. Per the authorization, $300,000,000 is transferred to the National Cancer Institute for cancer research and $52,000,000 will be allocated from the NIH Innovation Fund, in this agreement reflected in the Office of the Director, for the Precision Medicine Initiative cohort ($40,000,000), the BRAIN Initiative ($10,000,000), and regenerative medicine research ($2,000,000).”

 

Education Provisions

  • IES — $605.267 million (- $13 million)
  • GEAR Up — $339.7 million (+$17 million)
  • TRIO — $950 million (+$50 million)
  • Pell
    •  Maximum award will be increased to $5,935, funded by a combination of discretionary and mandatory funds
    • Year-round Pell restored
    • $1.3 B in surplus reallocated
  • Title VI international– $72.2 million (flat)

 

Report language of note:

TRIO:

“There is concern that the Department has rejected and made ineligible for review several fiscal year 2017 grant applications based on minor formatting issues. The Department is strongly encouraged to provide flexibility to such applicants by permitting submission of a corrected application. The Department should include consistent formatting requirements across all TRIO competitions in the future.”

 

Defense

Research Accounts:

6.1:  $2.28 Billion (level)

6.2:  $5.30 billion (+$30 million)

 

USDA

AFRI — $375 million (+$25 million)

McIntire-Stennis — $33.9 million (level)

 

CJS

  • NSF– $7.4 overall
    • MREFC– $209.0 Million (+$8.7 million, $121.9 million for 3 research vessels)
  • NOAA
    •  Integrated Ocean Observing System– $30.7 million (+$1.2 million)
  • Adopts IOOS language from both bills (will need to go through again) and encourages use of HF radars
    • OAR CI’s– $60.0 M (level)
    • Sea Grant– $63.0 M (- $10.0 M)
  • NASA
    • Space Grant– $40.0 M (level)
    • Earth Science– $1.92 B (level)

E&W

  • EERE — $761 million (+$40 million)
    • Water Power Energy R&D $84 million (+$14 million)
  • ARPA-E — $276 million (+$15 million)
  • Office of Science – $5.4 billion (+$40 million)
    • Fusion — $330 million (+$7 million)

 

Interior

  • EPA Science and Technology — $91.9 million (-$9 million)
    The bill provides $713,823,000 to be partially offset by a $7,350,000 rescission for a net discretionary appropriation of$706,473,000. The bill transfers $15,496,000 from the Hazardous Substance Superfund account to this account.

    • Chemical safety and sustainability – $ 126.9 million (-$9 million)
    • National priorities — $4.1 million (-$10 million, but over the FY2017 request of $0)
    • Safe and sustainable water resources — $106.2 million (-$1.1 million)
    • Sustainable and healthy communities — $ 134.3 million (-$5.6 million)
  • USGS
    • CRU’s– $17.4 million (level)
    • Earthquake Early Warning– $10.2 M (+ $2 M)
  • NEH– $149.8 million (+$1.9 million)

 

 

OMB Director Mulvaney Pushing for Sanctuary City Language in FY2017

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OMB Director Mick Mulvaney is pushing House lawmakers to include language in the FY2017 omnibus appropriations bill to restrict federal funding grants for cities that do not enforce federal immigration policies. The goal is to bring the House Freedom Caucus on board with a government funding bill.

Such a provision, known as a rider, would put the already delicate negotiations under further strain, as Congressional Republicans already struggle to deal with the Administration’s supplemental request to begin building a border wall. A rider prohibiting federal funds from going to sanctuary cities would guarantee zero Democratic support.  

Despite recent changes to the Senate rules regarding confirming Supreme Court Justices, the Senate will need 60 votes to move forward with any appropriations bill and Senate Republicans are only 52 votes. 

When Congress returns on April 25th from its two-week recess for Passover and Easter, it will have 4 legislative days to pass some vehicle (an omnibus or another CR) for FY2017 funding or risk a shutdown.

Stay tuned.