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Category: Higher Education

President Obama’s American Jobs Act Would Carry Slight Impact for UW

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The American Jobs Act introduced by President Obama last week and delivered to congress in full bill form this week, looks like it may carry some tax implications for UW.

  • If passed, the bill would expand and extend the existing payroll tax reduction for employees from the already reduced rate of 4.2% to 3.1%.
  • Would reduce the payroll tax cut for employers to 3.1% – half of what it is now – for the first $5 Million of payroll. This applies to institutions of higher education, but is designed to primarily benefit small businesses – it will have a minimal impact on UW.
  • A couple of tax credits for hiring veterans and long-term unemployed workers may carry a small financial benefit for UW.
  • $30 billion for state aid, which would not apply to institutions of higher education, but the provision does contain a Maintenance of Effort provision designed to protect higher ed funding at the state level.

Portions of the bill have already drawn opposition from both parties, and it is unlikely that it will pass completely in its current form. We are more likely to see the tax credits enacted, while the state aid will be more contentious.

Senate Holds Hearing on Department of Ed FY12 Budget

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The Senate Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies held a hearing yesterday on the Department of Education’s FY12 budget. Secretary Duncan was the witness.

In his opening remarks, Duncan expressed concern that America has gone from being a world leader in education to now being “middle of the pack”.  He also emphasized that demand on the Pell program has increased from 6 million to 9 million students in 2 years and that the Department is focused on closing the Pell shortfall – currently $11 billion – through increased efficiencies and more resources. The Pell program accounts for a third of the Department’s total $77 billion FY12 request. The Secretary cites the increasing number of lower income families and more families without jobs as the reason for the increased demand for the grants. Earlier this week, both Reid’s and Boehner’s debt ceiling deals contained an elimination of the in-school interest subsidy for graduate students, with the money saved by doing this going back into the Pell program to help shore up the shortfall for the next two years. Although this will have a negative effect on students, out of the many rumored changes to Pell that have been floating around during the past few weeks and the negotiation process, this is the best possible outcome for the university community. Pell and changes to the program will continue to be an issue as we head towards Fall and finishing up the FY12 process.

The Committee also brought up the concern that 89% of first-generation college students do not complete their degree. The Secretary stated that this was one of the Department’s FY12 priorities, and they are trying to solve this problem in three ways: 1) Fighting to maintain access to Pell. 2) Investing in community colleges and partnerships with the private sector to leverage funding. 3)  Investing in programs such as i3 and the proposed “First in the World Competition”. The First in the World Competition would provide “venture capital” to encourage innovation approaches to improving college completion (particularly low-income and minority students), research support to build the evidence of effectiveness needed to identify successful strategies, and resources to scale up and disseminate strategies we already know are successful.

The Labor-HHS-Ed Appropriations bills have not yet been drafted in the House or the Senate and we don’t expect to see them until after the August recess.

NSF & USAID Launch PEER

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The National Science Foundation(NSF) and the United States Agency for International Development(USAID) launched a new collaborative program called PEER (Partnership for Enhanced Engagement and Research) last week. PEER is a new international, interagency joint initiative which will address environmental challenges that affect both the United States and the developing world by reinforcing existing relationships and creating new connections. It will unite NSF’s competitively-awarded scientific investments in U.S. institutions with similarly awarded USAID funding to solve global challenges.

More information can be found here.

ED Launches New Round of Promise Neighborhood Grants

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On July 6, the Department released the application for the next phase of the Promise Neighborhoods program, including a second round of planning grants and new implementation grants, totaling $30 million.  Institutions of higher education are eligible to apply for funds to develop or execute plans that will improve educational and developmental outcomes for students in distressed neighborhoods.  The Department expects to award four to six implementation grants with an estimated grant award of $4 million to $6 million.  Grantees will receive annual grants over a period of three to five years, with total awards ranging from $12 million to $30 million.  Remaining 2011 funding will go toward 10 new one-year planning grants with an estimated grant award of $500,000. 

More info can be found here

Patent Reform Bill Remains Stalled in Senate

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The Senate has been unable to quickly vote on the House-passed version of Patent Reform, and it now looks increasingly likely that votes will have to be allowed on a couple of controversial amendments to the bill which could cause further problems.

One of the House adopted amendments would recalculate the filing period for patent term extension applications for drug products and other patents covered by the Hatch-Waxman Act. This has raised concern among certain Senators because it would essentially only benefit one biotech firm which filed its application for extension of patent protection on day late.

The other amendment which has already proven to be an obstacle is the issue of patent office funding. While the House version of the bill included language that directed revenue to be continued to be handled through the appropriations process, a larger group of Senators continue to push for allowing USPTO to keep all of the revenue it generates from fees.

It is expected that the House would likely accept changes to the former amendment, but would refuse any alteration to the latter. Also holding up the process is the refusal by many in both chambers to refuse to discuss any other issues until the debt ceiling debate is resolved.