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Fiscal Fight Continues

Congresses has a lot on its “to do” list next week before they break for the month-long August recess. The most pressing issue relates to the budget: lawmakers are trying to determine if they can make a deal on the overall budget numbers since they will only have nine working days when they return to work in September and before the end of the federal fiscal year. There is concern that they will not have enough time to reach an agreement on how to keep the government running into FY14.  While most Republicans are focused on keeping the lower spending levels dictated by the 2011 Budget Control Act, Democrats want a broader deal that would replace the sequester.

House and Senate Republicans want a continuing resolution (CR) that to reflect annual discretionary spending of $967 billion, the sequester level dictated by the Budget Control Act of 2011 (PL 112-25). Democrats in both chambers, meanwhile, are hoping to use the CR debate to broker a budget deal that would replace the sequester ahead of the start of FY14 October 1st that would restore the pre-sequester spending cap of $1.058 trillion for discretionary programs.

Unfortunately, it appears that the different sides have spoken to the each other about the potential terms for a CR, and that is what is causing angst with the short work period between now and the end of the fiscal year.

The Office of Federal Relations continues to advocate for preserving funding for research and student aid, as well as a balanced approach for any further deficit reduction efforts.

Continuing Resolution Looking Likely

House Republican leadership is beginning to discuss the possibility of a stopgap spending measure – or continuing resolution (CR) – to keep the government running past the end of the federal fiscal year on September 30th. Discussions are beginning earlier than usual this year due to disagreements between the House and Senate are so large that neither side is optimistic that they can reach a resolution before then.

At this point, it is unclear as to whether the GOP will push for a simple extension at the FY13 level of roughly $988 billion for discretionary spending or try to draw up a stopgap bill at the roughly $967 billion level now written into federal law. Also unclear is how long the CR will last to keep the government funded. One thing is for sure: House Republicans will not work with the $1.058 trillion level for discretionary spending advocated by Senate Democrats.

In the midst of all this, House and Senate Appropriators continue to move bills forward in their respective chambers. The House Appropriations Committee is on track to end this week with 10 of its 12 FY14 bills approved. In addition to the work on the Labor-HHS-Education bill, the Interior-Environment panel marks up its draft on Tuesday and the full committee acts Wednesday on the State-Foreign Operations bill.

Senate leadership will attempt to bring their first FY14 spending bill – Transportation-HUD – to the Senate floor for consideration Tuesday. Senate appropriators are slated to approve this week the Financial Services and State-Foreign Operations measures, the ninth and 10th annual measures to move through the committee. The Senate Defense bill is expected to be marked up next week, the last work week before the August recess.

This Week in Congress

An overview of relevant House and Senate committee hearings and markups on the schedule this week:

TUESDAY, July 23rd

Senate Homeland Security and Governmental Affairs
Education for Military and Veterans
Full Committee Hearing
10:30 am, 342 Dirksen

House Appropriations
Fiscal 2014 Appropriations: Interior and Environment
Subcommittee Markup
10 am, B-308 Rayburn

WEDNESDAY, July 24th

House Education and the Workforce
Supporting Academic Freedom Through Regulatory Relief Act
Full Committee Markup
10 am, 2175 Rayburn

Bipartisan Agreement Reached on Student Loan Rates

A bipartisan group of senators appear to have reached a deal that would provide a long-term fix to student loan rates, allowing them to increase up to a ceiling of 8.25 percent. Lawmakers on both sides of the aisle are supporting the compromise, which also would bring both subsidized and unsubsidized Stafford loans under the same interest rate for the first time. The rate on unsubsidized loans doubled on July 1st from 3.4 percent to 6.8 percent.

Under the new compromise plan, the rates for all undergraduate student loans would be harmonized. Currently, unsubsidized Stafford loans carry a higher rate than subsidized loans, which are available to lower-income borrowers. Under the bill, all undergraduate students would take out loans equal to the 10-year Treasury bond plus 2.05 percent — a deal that would bring student borrowing rates back down to 3.86 percent in 2013.

Graduate students, and loans taken out by parents on behalf of their children, would also get have their rates tied to Treasury bonds, and receive caps of 9.25 percent and 10.5 percent, respectively. Graduate loans would be set to Treasury bond rates plus 3.6 percent, and the so-called PLUS loans for parents would be equal to that rate plus 4.6 percent.

Senate Majority Leader Harry Reid (D-NV) said that he hoped to move the bill quickly, before Congress breaks for the August recess – and before students and parents have to sign loan documents for the 2013-14 academic year.

This Week in Congress

An overview of relevant House and Senate committee hearings and markups on the schedule this week:

TUESDAY, July 16th

Senate Appropriations
Fiscal 2014 Appropriations: Commerce, Justice, and Science
Subcommittee Markup
10 am, 192 Dirksen

Senate Appropriations
Fiscal 2014 Appropriations: Homeland Security
Subcommittee Markup
10:30 am, 138 Dirksen

House Energy & Commerce
Energy and Commerce Bills
Full Committee Markup
4:30 pm, 2123 Rayburn

WEDNESDAY, July 17th

Senate Appropriations
Fiscal 2014 Appropriations: Defense
Subcommittee Hearing
9 am, 192 Dirksen

THURSDAY, July 18th

Senate Appropriations
Fiscal 2014 Appropriations: Commerce, Justice, Science
Full Committee Markup
10 am, 106 Dirksen

Senate Appropriations
Fiscal 2014 Appropriations: Homeland Security
Full Committee Markup
10 am, 106 Dirksen

House Appropriations
Fiscal 2014 Appropriations: Commerce, Justice, Science
Full Committee Markup
10 am, 2359 Rayburn

House Science, Space, & Technology
NASA Authorization Act
Full Committee Markup
9:15 am, 2318 Rayburn