Federal Relations Updates
December 22, 2016
Wrap-up of 114th Congress
A Second Continuing Resolution for FY17
Congress wrapped up the lame-duck session, approving an FY17 continuing resolution (CR) that freezes most discretionary spending through April 28, 2017.
The CR fully funds the FY17 NIH Innovation Fund in the 21st Century Cures Act, which Congress approved December 7 (see item below). The measure provides $352 million for the NIH Innovation Fund, as well as $20 million for the Food and Drug Administration Innovation Account and $500 million for state grants to respond to the opioid crisis.
The NIH funding comprises:
- $40 million for the Precision Medicine Initiative;
- $10 million for the BRAIN Initiative;
- $300 million for cancer research; and
- $2 million for clinical research in regenerative medicine (with a one-to-one match of federal and non-federal funding).
21st Century Cures Act
Congress successfully passed the 21st Century Cures Act, which contains $4.8 billion in medical research funding over 10 years, as well as $1 billion over 2 years to fight opioid abuse and $500 million over 10 years for the Food and Drug Administration. The Cures Act funding is fully offset and does not count toward the budget caps, but Congress must appropriate the funds each year.
The Cures Act also creates a "Next Generation of Researchers Initiative" in the NIH Director's office to improve opportunities for new researchers, includes language establishing a new Research Policy Group, and directs federal agencies to reduce the research regulatory burden without weakening oversight in such areas as animal welfare, sub-recipient grant monitoring, and financial conflict of interest reporting.
American Innovation and Competitiveness Act
Congress also passed the American Innovation and Competitiveness Act (AICA), formerly known as COMPETES. The legislation reauthorizes the National Science Foundation, reaffirms the agency's merit review process, and seeks to reduce the administrative burden on academic researchers.
Progress on the Research Regulatory Front
Congress approved three bills in the past month with provisions aimed at reducing the regulatory burden on academic institutions and their research faculty: the AICA, the 21st Century Cures Act, and the National Defense Authorization Act. AAU has compiled a list with the details.
On to the 115th Congress and the Trump Administration
The new Congress will be sworn in on Tuesday, January 3, and is scheduled to begin work immediately. The only change in the Minnesota Congressional delegation is the election of Representative-elect Jason Lewis to replace retiring Chairman John Kline in the Second Congressional District.
President-elect Trump will be sworn-in on Friday, January 20. The president-elect traditionally addresses the nation on Inauguration Day, but does not deliver a State of the Union address until the following January.
Thank you for reading. Feel free to contact our office if you have any questions.
May 25, 2016
Bottom line: FY17 discretionary spending is largely frozen at the FY16 level.
The Senate recently approved the FY17 Energy and Water funding bill--its first of the year--setting the stage for consideration on the floor of a combined FY17 appropriations package of Transportation-Housing and Military Construction-Veterans Affairs.
In the House, we expect to see a handful of appropriations bills moving through the process, beginning with Military Construction-Veterans Affairs. Subcommittees are wrestling with Defense and Commerce-Justice-Science appropriations bills, both of which fund important research programs.
The fact that Congress is moving appropriations bills is a positive development: negotiated funding bills are generally better for University of Minnesota priorities than extensions of previous funding through a continuing resolution (CR). But the slow start and small number of remaining days in session point to a CR at least through the election, possibly followed by an omnibus appropriations package before the end of December.
Department of Labor Overtime Rules
The Obama administration released its final rule on overtime. The rule raises the salary overtime threshold from $23,660 to $47,476, with an automatic inflation increase every three years. The rule takes effect December 1, 2016.
The University's Human Resources team is analyzing the new rule and will communicate its impact to the University and our employees.
On Campus/In Washington
Congressman Tom Emmer visited the Carlson School to meet with faculty and students in Management 3010: An Introduction to Global Entrepreneurship. The class traveled to Cuba over spring break to study entrepreneurism. Rep. Emmer traveled to Cuba with President Obama and is the author of a bill in the U.S. House of Representatives to lift the embargo.
Erin Carlson, professor of chemistry in the College of Science and Engineering, received the President's Early Career Award in Science and Engineering. She attended the award ceremony at the White House and participated in a Science Coalition media event on the importance of federal investment in research.
Senators Amy Klobuchar and Al Franken held a media roundtable with Mike Osterholm (Center for Infectious Disease Research and Policy), Katie Anderson (Department of Medicine-Internal Medicine), and William Stauffer (Department of Medicine-Infectious Disease) to discuss the Zika virus.
The DC and Minnesota staff of Representative Keith Ellison visited Saint Anthony Falls Lab.
Senator Klobuchar visited the driving simulator at the Center for Transportation Studies and held a news conference with stakeholders to highlight the dangers of distracted driving.
Senator Klobuchar organized a panel of college leaders, students, and business people for a Millennials Forums at the Humphrey School with the chair of the White House Council of Economic Advisors.
Senators Klobuchar and Franken authored a Senate Resolution in honor of the national champion Golden Gopher Women's Hockey Team.
Senator Klobuchar opened a panel discussion at the Humphrey School on foreign policy challenges facing the next U.S. President with China, Russia, the Middle East, and around the world.
December 22, 2015
We have a FY2016 federal budget!
An agreement on the top-line budget number was reached in late October, and Congress finalized and passed the FY2016 budget on Friday, December 18. President Obama signed the bill later that day. A few highlights:
Education/student aid programs
- Raises the maximum Pell grant by $140, to $5,915, in the 2016-17 academic year
- Increases TRIO by $60 million (7.1%)
- Increases GEARUP by $21 million (7%)
- Increases funding for NIH by $2 billion (6.5%), the largest single increase for the agency in over a decade
- Increases funding for the Agriculture and Food Research Initiative by $25 million (7.7%)
- Increases funding for the Department of Energy Office of Science by $279 million (5.5%)
- Increases funding for the National Science Foundation by $119 million (1.6%)
Vice President of Research Brian Herman issued a press release praising Congress's investment in research.
Important programs that were cut in either House or Senate bills or both earlier this year were restored. For example, the Graduate Assistance in Areas of National Need, the Supplemental Educational Opportunity Grant, the Institute of Education Sciences, Title VI International Education, and Health Resources Services Administration Health Professions were restored to FY2015 levels. Unfortunately, the First in the World Program did not receive any funding.
Tax bill benefits students
A tax bill also passed last week that makes permanent some tax benefits for students and universities that were set to expire. For example:
- The American Opportunity Tax Credit, which provides low and middle-income families with an annual tax credit of up to $2,500 per student for college expenses
- The IRA charitable rollover tax deduction
- The R&D tax credit, which benefits U.S. industries seeking to conduct research
Further, the legislation extends the tuition and expenses deduction through 2016.
Perkins Loan Extension
Congress also passed legislation to extend the Perkins Loan program for two years. Authorization for this campus-based student aid program expired at the end of September. The details of the extension bill are not ideal, as it limits graduate student participation and mandates that new Perkins recipients exhaust unsubsidized Stafford loans before taking Perkins. However, enactment keeps the program alive and will allow Congress to more thoroughly consider the program in the context of the larger Higher Education Act.
State of the Union
President Obama delivers his last State of the Union on January 12 and will set the framework of the FY2017 budget and his final year in office.
December 3, 2015
FY 2016 Federal Budget: What Now?
Speaker John Boehner (R-OH) ended his last week in Congress by working with Senate leadership to hammer out a two-year budget deal. The agreement covers federal FY2016 and FY2017. It sets the top-line budget numbers, lifts the budget caps, and removes the threat of sequestration (automatic budget cuts).
The federal government is operating under a continuing resolution until Friday, December 11. Congress must act on appropriations bills and reallocate the new funding levels by that date.
Congressional negotiators are working through the details and must resolve not only specific funding issues but also if the final legislation will include such policy riders as those defunding Planned Parenthood and blocking the immigration of Syrian refugees. A government shutdown seems unlikely when the continuing resolution expires on December 11, but there is a possibility of one or more funding extensions before a final deal is worked out. Let's optimistically hope for a resolution before the end of the calendar year.
Taxes: Another To Do before the End of the Year
It is unclear whether Congress will approve a one-year across-the-board extension or a longer-term deal that makes permanent some tax breaks, such as the research tax credit, the above-the-line-deduction for qualified tuition, and the individual retirement account charitable rollover. All of these provisions are set to expire on December 31.
Perkins Loan Program
University of Minnesota students receive more than $5 million in Perkins loans-federal low interest loans. The program is set to expire if Congress doesn't act. The U.S. House of Representatives voted to extend the program, but the Senate did not. President Kaler participated in a Big Ten presidents letter to Senate leadership advocating for the extension of this loan program. Minnesota Senators Franken and Klobuchar are supportive of extending Perkins.
Visiting a Federal Facility?
REAL ID is a federal law passed post-9/11 that requires states to adopt a more stringent process for issuing driver's licenses. The Minnesota legislature has not adopted the new standards.
While it is unclear when this law will go into effect, faculty and staff traveling by air or visiting federal agencies should carry a federally recognized form of identification-an enhanced driver's license or passport-after January 1, 2016.
HHS Secretary Burwell and Sen. Klobuchar
The Center for Magnetic Resonance and Research (CMRR) hosted Health and Human Services secretary Sylvia Burwell and Senator Amy Klobuchar for a tour and a public roundtable, "Cutting Edge Medical Technology and Innovation." CMRR director Kâmil Uğurbil, pharmacy dean Marilyn Speedie, and Tucker LeBien, head of research in the Academic Health Center, participated in the roundtable. Senator Klobuchar followed up with an editorial in the Rochester newspaper.
Rep. Emmer at Carlson for Cuba Conversation
Congressman Tom Emmer visited campus for "A Conversation on Cuban Travel, Trade and Investment Prospects for Minnesota Businesses." The event was part of the Carlson School's Global Matters series. Congressman Emmer was introduced by Dean Sri Zaheer and joined by experts from Sun Country Airlines, Cargill, and Medtronic, as well as by Carlson professor Paul Vaaler.
Rep. Ellison on Campus
Earlier this month, Congressman Keith Ellison participated in a conference at the Humphrey School on global maternal and child health. He also met with University faculty to talk about the importance of funding federal research to our institution. And he addressed the multicultural student leadership conference.
Rep. Paulsen to Miromatrix
Congressman Erik Paulsen visited Miromatrix, a University of Minnesota start-up company in Eden Prairie.
The 114th Congress has begun with a burst of activity on funding proposals for the National Institute of Health and other health-related agencies. Here’s a quick look at some of the proposals.
President Obama’s Budget Proposal: Precision Medicine Initiative
President Obama's FY16 budget proposes a new precision medicine initiative with funding for a $215 million investment in the National Institutes of Health (NIH), the Food and Drug Administration (FDA), and the Office of the National Coordinator for Health Information Technology (ONC). The proposal includes:
- $130 million to NIH for development of a national research cohort of 1 million+ volunteers to propel our understanding of health and disease, and to set the foundation for a new way of doing research through engaged participants and data sharing.
- $70 million to the National Cancer Institute to scale up efforts to identify genomic drivers in cancer and apply that knowledge in the development of more effective treatments.
- $10 million to FDA to acquire additional expertise and advance the development of databases to support the regulatory structure needed to advance innovation in precision medicine and protect public health.
- $5 million to ONC to support the development of interoperability standards and requirements that address privacy and ensure the secure exchange of data across systems.
United for Medical Research
United for Medical Research, a coalition of research institutions, patient and health advocates, and private industry, issued a report, Health Funding: Ensuring a Growing and Predictable Budget for the National Institutes of Health, focused on alternative approaches to securing predictable NIH funding. The report offers three suggestions: 1) Adjust spending caps to favor NIH funding increases; 2) Implement multi-year budgeting and appropriations for NIH to increase year-to-year stability and predictability; 3) Examine changes in mandatory programs, trust funds, and dedicated funding streams to increase both funding amounts and stability for biomedical research.
Accelerating Biomedical Research Act (S.318, H.531)
This legislation would allow Congress to restore the purchasing power of NIH’s budget to what it would have been if it had kept up with inflation since 2003. The bill would allow appropriations to increase NIH funding by 10 percent for the first two years and about 6 percent each year thereafter through 2021.
American Cures Act (S.289)
The American Cures Act would provide a steady growth rate in federal appropriations for biomedical research conducted at NIH, the Centers for Disease Control, the Department of Defense Health Program, and the Veterans Medical and Prosthetics Research Program. Each year, the bill would increase funding for each agency and program at a rate of GDP-indexed inflation plus 5 percent.
Minnesota senators Klobuchar and Franken are the original cosponsors of the bill.
The Medical Innovation Act (S.320. H.744)
This legislation would require pharmaceutical companies that break the law and settle with the federal government to reinvest a percentage of their profits into NIH.
Permanent Investment in Health Research Act (H.777)
This bill would make NIH funding mandatory instead of subjecting the agency to the annual discretionary appropriations process.
21st Century Cures
The House Energy and Commerce and the Senate Health, Education, Labor, and Pensions (HELP) Committees released draft documents seeking public comment on plans to accelerate the delivery of drugs and devices to patients.
The House committee released a discussion draft outlining specific legislative proposals arising from the 21st Century Cures initiative, which included five white papers and eight hearings, and a number of roundtable discussions convened in Washington and across the country.
The draft focuses heavily on the FDA, but contains proposals related to NIH, including:
- Establishing a program at NIH to help young emerging scientists.
- Requiring NIH to support projects that pursue innovative approaches to major challenges in biomedical research that are high-risk but have the potential to lead to breakthroughs.
- Establishing a working group composed of NIH and stakeholders to provide recommendations on how to streamline the grant process for researchers.
- Requiring the Secretary of Health and Human Services to develop a plan to carry out a longitudinal study designed to improve the outcomes of patients with chronic disease.
- Streamlining the Institutional Review Board process, particularly for clinical trials conducted at multiple sites.
- Clarifying that peer-reviewed journals, journal reprints, journal supplements, and medical textbooks are excluded from the reporting requirement under the Sunshine Act.
In the Senate, the HELP Committee released a report on the challenges of getting safe treatments, devices, and cures to patients more quickly and effectively, and examining what is working and what is not at FDA and NIH.
The senators are soliciting feedback on their report as they also begin a major initiative in the Senate HELP Committee—including a bipartisan working group and a series of hearings—to examine the time and cost currently involved with the drug and medical device discovery and development process, and how to better align public policies to support medical innovation.
“I want to work with Congress to replace mindless austerity with smart investments that strengthen America.” President Obama
President Obama kicked off the budget season on Monday, February 2, with the launch of his proposed FY16 budget of $4 trillion, which:
- Increases taxes on the wealthiest individuals and corporations (taxing overseas profits).
- Cancels sequestration (automatic spending cuts) for defense and non-defense spending.
- Flattens the rate of growth of the deficit and the national debt.
Overall the president’s budget boosts research funding at the federal agencies and funding for student financial aid. His proposal for funding for two years of community college is also part of his FY16 budget.
Federal Budget Process
A quick review of the lengthy, and partisan, federal budget process:
- The president’s budget is announced the first Monday in February.
- Budget Resolution: Congressional budget committees set their own budget numbers and priorities. This results in a nonbinding budget blueprint that does not go the president for signature.
- Budget Reconciliation: This acts on suggestions in the Budget Resolution around spending and savings. It only needs a simple majority for passage, but must then be signed by the president.
- Appropriations committees consider and pass 12 appropriations bills.
- Each of the 12 appropriations bills are expected to be passed on the floor and sent to the president for signature by September 30.
The last time Congress passed all 12 appropriations bills by September 30 was 1997. The last federal government shutdown was 2013 (16 days).
We’ll continue to gather details on the president’s budget proposal as they become available.
FY15 Final Budget
The U.S. Congress passed funding for FY15 in a "CRomnibus" (part Continuing Resolution, part Omnibus) over the weekend to avoid 1) a federal government shut-down and 2) tossing the decision-making to the new Congress. Remarkably, there was little controversy about the spending levels themselves that form the heart of the bill.
The bill covers the remaining nine-months of FY15 and has bottom line of $1.1 trillion--essentially flat-funding the federal government. The Minnesota delegation overwhelmingly opposed the bill: NAY votes from Senators Klobuchar and Franken as well as Reps. Walz, McCollum, Ellison, Bachmann, Peterson and Nolan; YEA votes from Reps. Kline and Paulsen.
The measure includes full-year appropriations for 11 out of the 12 appropriations bills and a continuing resolution (CR) through February for the Department of Homeland Security (DHS). The CR for DHS will allow next year's Republican-led Congress to address President Obama's immigration executive order.
National Institutes of Health: NIH is funded at $30.1 billion, an increase of $150 million. The agency will also receive $238 million from the $5.4 billion emergency package to fight Ebola, which will be used for clinical trials to evaluate potential vaccines and therapies.
National Science Foundation: NSF will receive $7.3 billion, an increase of $172 million. Within that increase, Research and Related Activities will increase by $124 million to $5.933 billion and Education and Human Resources by $19.5 million to $866 million. Major Research Equipment and Facilities Construction will receive a modest increase of $760,000 to $200.7 million.
Department of Energy (DOE) Office of Science: The Office will be level-funded at $5.071 billion, as will ARPA-E at $280 million.
Department of Agriculture: Research accounts are flat-funded except for the Agricultural and Food Research Institute which received an increase of $9 million.
Pell Grants: The measure provides $22.5 billion for Pell Grants and allows the maximum award to increase by $100 to $5,830 in the next academic year because of an automatic mandatory increase in funding. The bill does not include Senator Tom Harkin's (D-IA) proposal to reallocate $2 billion of the Pell Grant surplus to other programs.
Federal Work-Study will be increased by $15 million, TRIO programs by $1.5 million, and the Department of Education's Office for Civil Rights by $1.6 million. Funding for both Gear-Up and Supplemental Educational Opportunity Grants is frozen. The First in the World program is cut by $15 million. There is no funding for the Administration's proposed college rating system.
Before leaving Washington in mid September, Congress passed a Continuing Resolution (CR) to fund the federal government through December 11, 2014, at the current annual cap of $1.012 trillion, with an across-the-board cut of 0.0554% from FY14 levels.
The CR also included:
- Authorization for the U.S. to train and equip vetted Syrian opposition to fight the Islamic State in Iraq and Syria.
- Funding of $88 million to manage the Ebola outbreak—$30 million to the Centers for Disease
- Control to track the spread of the disease and $58 million to the Health and Human Services’ Biomedical Advanced Research and Development Authority to accelerate the production of drugs to fight Ebola.
When Congress returns after the election for a lame duck session, they may:
- Pass a yearlong CR through September 30, 2015.
- Pass another short-term CR and let the new Congress deal with FY15 next calendar year.
- Pass any or all of the FY15 appropriations bills currently in various stages of consideration in Congress.
What’s Left on the Table for November…or Next Year?
- Reauthorization of the Higher Education Act: Retiring chairman of the senate education committee, Senator Tom Harkin (D-IA), has a comprehensive draft bill. House education chairman John Kline (R-MN) has successfully moved a number of smaller, less controversial bills through his committee and the House floor.
- Reauthorization of the America COMPETES Act: Authorizes additional funding levels for the National Science Foundation, the Department of Energy, and the National Institute of Standards and Technology.
- Sexual Assault: Senate and House members, with the support of the White House, recently introduced bills to tackle sexual assault on campus.
- Immigration Reform: Legislation passed the Senate early in this Congress. The House has not been able to tackle the issue.
Golden Goose Awards
Eight researchers whose work might have sounded odd or impractical at the time it was conducted, but which led to major human and economic benefits, were honored at the Golden Goose ceremony in September in Washington, D.C.
The awardees stressed their concern that tight federal research funding has made university researchers and agency program staff risk-averse, and is prompting many young scientists and engineers to forego the difficulties of academic research careers. They questioned whether their own research would have been funded if the current environment had prevailed at that time.
The award was created and jointly launched by the Science Coalition, the American Association of Universities, the Association of Public and Land-grant Universities, and others associations.
United States Department of Agriculture (USDA) secretary Tom Vilsack held a press conference on the St. Paul campus to unveil a new program to better help farmers manage risk. Extension dean Bev Durgan hosted the event. Senators Amy Klobuchar and Al Franken and Representatives Collin Peterson and Tim Walz participated.
Representative Peterson attended the groundbreaking for Crookston’s new Wellness Center.
The University’s Office of Government Relations hosted 40 federal and state legislative staffers on the east bank of the Twin Cities campus to visit and learn about the Medical Devices Center, the Visible Heart Lab, the Academic Health Center Simulation Center, the active learning classrooms in STSS, and TCF Bank Stadium. The group also heard from One Stop student services staff about streamlining and simplifying registration, financial aid, student records, and veterans’ benefits.
The Center for Transportation Studies and the Humphrey School held a Legislative Staff Day for federal staffers to take a closer look at transportation research at the U.
Dr. Gregory Parham, the USDA assistant secretary for administration, visited the University’s Department of Homeland Security Center of Excellence for Food Protection and Defense.
Senator Franken and challenger Mike McFadden participated in Voterpalooza—a get-out-the-vote effort let by the Minnesota Student Association.
Senator Klobuchar and Representative Keith Ellison held a press conference at St. Anthony Falls Laboratory to discuss the passage of federal legislation to close lock #1 on the Mississippi River to prevent the spread of invasive aquatic species. They also toured the SAFL renovations funded by both federal and state funds.
President Eric Kaler testified before the Senate Health Education Labor and Pensions Committee hearing on “The Role of the State in Higher Education.”
Humphrey School dean Eric Schwartz testified before U.S. Senate Foreign Relations Committee on "The State of Religious Freedom in East Asia and the Effects on U.S. Foreign Policy in the Region."
Extension educator Jill Sackett testified before the U.S. House Subcommittee on Conservation on soil health in the region.
Katie Eichle (Aurora Center) participated in a roundtable hosted by Senator Claire McCaskill (D-MO) on “Campus Sexual Assault: The Role of Title IX.”
Mike Osterholm (Center for Infectious Disease Research and Policy) participated in a congressional roundtable hosted by the Aspen Institute on the Ebola crisis.
Joelle Stangler, student body president, participated in the White House’s launch of the “It’s All up to Us” campaign against sexual assault.
FY15 Budget Outlook
In December 2013, Congress set the spending caps for both FY14 ($1.0122 trillion) and FY15 ($1.0136 trillion). As a result, Congress is currently further along in the appropriations process than in previous years. The FY15 budget deadline is September 30.
Basic scientific research funding is faring comparatively well, despite very tight budget allocations and many competing priorities.
- The House and Senate bills that fund the National Science Foundation (NSF) and NASA would increase funding for both agencies.
- For basic energy research, the House FY15 Energy and Water appropriations bill would level fund the Department of Energy’s Office of Science and APRA-E at the FY14 level.
- The Senate FY15 Labor-HHS-Education appropriations bill would provide $30.5 billion for the National Institutes of Health (NIH), an increase of $606 million. Within that total, the bill would provide $100 million for the second year of the multi-agency Brain Research through Application of Innovative Neurotechnologies (BRAIN) initiative, an increase of $60 million.
The Senate Appropriations Committee held a hearing in May on “Driving Innovation through Federal Investments,” which explored the impact of federal budget cuts on the nation’s standing as a world innovation leader. Committee chair Barbara Mikulski (D-MD) has said that the committee held the hearing because appropriators are concerned not only about the federal budget deficit but also about the “innovation deficit.” The hearing featured President Obama’s science adviser, as well as the heads of the NIH, the NSF, the Department of Energy, and DARPA, discussing how federal investments in research drive innovation.
National Science Foundation and Social Behavioral Economic (SBE) Research
The House recently approved the FY15 Commerce-Justice-Science Appropriations bill, which funds the NSF and NASA. The House largely sustained the overall funding increases approved in committee for each agency. Unfortunately, some House Republicans used the floor debate to criticize the NSF for its grant-making system, singling out specific SBE research grants for ridicule.
House Science Committee chair Lamar Smith (R-TX) and Majority Leader Eric Cantor (R-VA) offered an amendment that would have had no impact on NSF research funding, but gave Chairman Smith and other members the opportunity to express their concerns about the agency’s funding policies and call for reduced support for SBE research. In response, Reps. Chaka Fattah (D-PA), David Price (D-NC), and Rush Holt (D-NJ) defended NSF-funded SBE research and gave specific examples of how such research has improved the nation’s health, policymaking, and national security.
Minnesota’s Senators Klobuchar and Franken both sit on the Senate Judiciary Committee, which has jurisdiction for patent issues. The University’s Office of Technology Commercialization (OTC), Office of the General Counsel, and President Kaler have worked closely with our Senators on the hammering out the impact of the provisions to the University and the importance of the patent system to driving discovery on the U’s campuses.
Jay Schrankler (OTC) sent a letter to both senators with our concerns about certain proposed changes to patent law. The Judiciary’s patent debate was recently tabled due to the inability to find compromise language, although we anticipate further action after the November election.
Frontiers in Research, Science, and Technology (FIRST) Legislation
Despite continued strong opposition from the University and the scientific and business communities, the House Science Committee approved Chairman Smith’s FIRST Act (H.R. 4186), legislation to reauthorize programs in NSF and the National Institutes of Standards and Technology, as well as STEM education programs. The bill was approved on a party-line vote. It remains unclear if and when the measure will go to the House floor.
The bill would cap overall funding for NSF below the level of inflation, impose new conditions on the agency’s grants system, and target the Social, Behavioral, and Economic Sciences (SBE) and the Geosciences directorates for significant cuts in authorized funding. During committee consideration, the panel approved an additional $50 million cut in authorized funding for SBE, on top of the $56 million cut in the underlying bill.
The committee made one important improvement in the bill, regarding public access to the published results of federally funded research. Panel members approved an amendment to lower the embargo period for public access from 24 months to 12 months.
Higher Education Act (HEA)
Both House and Senate committees have been holding hearings over the past year on various elements of higher education in preparation for reauthorizing the HEA. We do not know if either body will release an HEA bill this Congress.
In the meantime, more than 45 bills have been introduced that tackle issues in higher education. View AAU’s list of these bills.
In April the chair of the House Ways and Means Committee, David Camp (R-MI) introduced a discussion draft of proposals for tax reform. Shortly after the document became public, Chairman Camp announced his retirement from Congress. So while this particular set of ideas is unlikely to see action this year, the proposals are the framework for discussion. The National Association of College and University Business Officers developed a matrix of tax issues of importance to universities—from repeal of the charitable IRA rollover to the repeal of the tax deductibility of seat license fees. Please let us or Kelly Farmer (University Tax Management) know if you have any particular concerns as this debate continues.
In May, President Obama signed into law the Digital Accountability and Transparency Act, which not only will provide greater financial transparency in federal grants and contracts spending but will also take important steps toward streamlining the reporting process. The goal is to eliminate duplicative financial reporting requirements and reduce compliance costs.
Senator Klobuchar and Representative Ellison held a media briefing at St. Anthony Falls Laboratory to discuss their efforts to prevent the spread of aquatic invasive species by closing Mississippi river lock #1.
Senator Klobuchar held a press conference in junction with the White House report on protecting college students from sexual assault. President Kaler participated, as well as campus police, undergraduate student leadership, and Katie Eichele (Aurora Center).
Senator Franken held a roundtable with undergraduate and graduate students on higher education issues and student finances.
Senator Klobuchar spoke at the opening of the Physics/Nano Building.
President Kaler met with Rep. Ellison in the Congressman’s Minneapolis office to discuss higher education issues.
Senator Klobchar held a news conference on proposed Kill Switch legislation to de-activate stolen cell phones. Minneapolis police chief Janee Harteau participated, as did U chief Greg Hestness.
U president Eric Kaler participated in a White House event on expanding college opportunity, where he announced a new initiative: “Retaining All Our Students.” It focuses on improving the first-year retention of low-income U students.
Leadership in CFANS and Extension participated in Hill visits as part of the Association of Public and Land Grant Colleges’ Council for Agricultural Research Extension and Teaching delegation and the Public Issues Leadership Workshop. They also attended the dedication of the statue of Norman Borlaug in the US Capitol.
Kris Wright (Student Finance) met with key staff to discuss issues around student loans and other higher education issues.
Bob Gehrz (CSE) visited Senator Klobuchar’s office to discuss concerns with NASA’s elimination of funding for the Stratospheric Observatory for Infrared Astronomy project.
College of Pharmacy dean Marilyn Speedie and Vadim Gurvich visited with the Minnesota delegation on the college’s work with the Food and Drug Administration.
The U’s Women’s Hockey team was honored at the White House for their 2013 National Championship title.
Laurie McGinnis (Center for Transportation Studies) and Lee Munich (HHH) met with transportation staffers in support of the U’s application for a grant.
Katie Eichele participated in a roundtable hosted by Sen. Clare McCaskill (D-MO) on issues surrounding sexual assaults on campus.
Dean Trevor Ames visited Capitol Hill as part of a meeting of the American Veterinary Medical Association.
Dean John Finnegan participated in Hill visits organized around the meeting of the Association of Schools of Public Health.
Chancellor Jacquie Johnson and Sandy Olson-Loy met with the Minnesota delegation to discuss the Native American Tuition Waiver.
Traci LaLiberte, (Center for Advanced Studies in Child Welfare, School of Social Work) participated in the Congressional Briefing on Adoption Policy and Practice Concerning Parents with Disabilities.
January 31, 2014
The Federal Budget: A Timeline
December 11, 2013: House and Senate budget committee chairs reached agreement on top line spending numbers for FY14 ($1.0122 trillion) and FY15 ($1.0136 trillion).
January 17, 2014: President Obama signed the FY14 budget/spending bill to fund the federal government through September 30, the balance of FY14.
Late February: Next deadline to raise the debt ceiling.
March 4: The President’s FY15 budget is released; the kick-off on the FY15 budget process.
FY14 Federal Funding
Numbers are based FY13 post-sequester budget levels. Key agency funding levels and policy language are as follows:
National Institutes of Health:
- NIH realized a $2.8% increase; a $29.9 billion budget for FY14. This includes $100 million for Alzheimer’s research, $30 million for the BRAIN Initiative, $474.7 million for clinical and translational science awards. The bill retains the NIH salary cap at executive level II.
- NIH director will assemble a working group on reducing administrative burden. The group must include “coordination and participation of universities, not-for-profits, and institutes” that receive NIH funds.
- The Appropriations Committees have asked NIH to conduct an agency-wide priority-setting review, emphasizing both committees’ support for the peer review process. Within 180 days of enactment of the bill, NIH is required to submit a report on the post-peer review priority-setting process and how it “provides decision makers with answers to key questions,” including how funded research affects human health, basic biomedical science, and the overall NIH research portfolio.
National Science Foundation (NSF):
- NSF received $7.172 billion for FY14, an increase of $288 million. Within that total, the measure allocates $5.8 billion for Research and Related Activities and $846 million for Education.
- Does NOT contain the language restricting NSF funding of political science research that was first inserted in FY13. That language prohibited NSF from funding political science research unless the NSF Director certified that the project promoted “national security or the economic interests of the United States.” Because of the difficulty of implementing the provision, NSF has not been funding new political science studies.
Department of Energy (DOE):
- DOE’s Office of Science appropriation is about $5 billion, which is a $450-million increase. Likewise, the Advanced Research Projects Agency-Energy received $280 million, which is a $29 million increase.
Department of Agriculture (USDA):
- USDA’s Agriculture and Food Research Initiative received $316 million, which is a $40 million increase.
Department of Defense (DOD):
- Overall research, development, test, and evaluation at DOD was cut by nearly $7 billion. However, support for Basic Research (6.1) increased.
Department of Education (DEd):
- Maintains level funding for the Pell Grant program at $22.8 billion, which, when combined with mandatory funding, will provide an estimated Pell Grant maximum award of $5,730, an increase of $85.
- Includes $75 million for the administration’s First in the World Initiative, which will provide grants to colleges to implement innovative and effective strategies that improve student outcomes and reduce the net price paid by students.
- Allocates $1 million for a National Research Council study to study the effect of regulations and reporting requirements on colleges.
Requires DEd to report on enrollment, graduation, and default rates for Pell Grant recipients. DEd must also develop a plan to minimize the Pell reporting burden on institutions, provide suggestions on how to improve the tracking of transfer and nontraditional students, and develop strategies to boost Pell Grant graduation rates.
State of the Union
During President Obama’s annual State of the Union, he discussed four issues of particular interest to research universities. He urged Congress to restore funding for basic research because it drives innovation, called for patent litigation reform, encouraged Congress to approve comprehensive immigration reform, and cited ways in which the administration is promoting greater college opportunity, college-cost information, and relief for those with high student debt.
"We know that the nation that goes all-in on innovation today will own the global economy tomorrow. This is an edge America cannot surrender. Federally funded research helped lead to the ideas and inventions behind Google and smartphones. That’s why Congress should undo the damage done by last year’s cuts to basic research so we can unleash the next great American discovery – whether it’s vaccines that stay ahead of drug-resistant bacteria, or paper-thin material that’s stronger than steel."
He added that his administration would launch six new university-based, high-technology manufacturing hubs this year to join the two existing hubs in Raleigh, North Carolina, and Youngstown, Ohio, and he urged Congress to approve legislation to double the number of new hubs.
On patent litigation reform:
“…And let’s pass a patent reform bill that allows our businesses to stay focused on innovation, not costly, needless litigation.”
On immigration reform:
"Finally, if we're serious about economic growth, it is time to heed the call of business leaders, labor leaders, faith leaders, law enforcement—and fix our broken immigration system. Republicans and Democrats in the Senate have acted, and I know that members of both parties in the House want to do the same. Independent economists say immigration reform will grow our economy and shrink our deficits by almost $1 trillion in the next two decades. And for good reason: When people come here to fulfill their dreams—to study, invent, contribute to our culture—they make our country a more attractive place for businesses to locate and create jobs for everybody. So let's get immigration reform done this year. Let's get it done. It's time."
On college opportunity and student debt:
"We’re shaking up our system of higher education to give parents more information, and colleges more incentives to offer better value, so that no middle-class kid is priced out of a college education. We’re offering millions the opportunity to cap their monthly student loan payments to ten percent of their income, and I want to work with Congress to see how we can help even more Americans who feel trapped by student loan debt. And I’m reaching out to some of America’s leading foundations and corporations on a new initiative to help more young men of color facing tough odds stay on track and reach their full potential."
The president also mentioned the recent White House Opportunity Summit, in which more than 100 higher education, including President Kaler, and private sector leaders pledged to undertake new efforts to improve college access and completion for low-income students. And he referenced the administration’s efforts to expand income-based repayment for student loans.
December 12, 2013
In an important display of bipartisanship, the cochairs of the FY14 budget conference committee announced a deal on Wednesday night that will fund the federal government for both FY14 and FY15 and provide some relief from the sequester. While the package developed by Rep. Paul Ryan (R-WI) and Senator Patty Murray (D-WA) does not completely lift the sequester cuts, it represents a step in the right direction.
Ten Things We Know about the Budget Deal
- Federal spending will increase $45 billion in FY14, more than without the deal.
- The automatic spending cuts planned for January 15 under year two of sequestration have been reduced by about 50%.
- The automatic spending cuts planned for January 1, 2015, under year three of sequestration have been reduced by about 25%.
- This sequestration relief is evenly divided between defense and non-defense discretionary spending.
- Sequestration’s 2% mandatory spending cut per year to Medicare providers remains in place.
- The deficit is reduced by increasing various government fees for mineral leasing, oil and gas royalties, airport security, etc.
- Both Republicans and Democrats are denied what they want most: Republicans don’t get any changes to Medicare and Social Security; Democrats don’t get any new taxes.
- The debt ceiling is not addressed.
- The deal, if passed, makes it more likely that an omnibus or two large appropriations bills (rather than a Continuing Resolution) could be considered and passed by Congress before the current Continuing Resolution expires on January 15. It is likely that House and Senate appropriators will work behind the scenes to move one omnibus or two large appropriations bills through both chambers rather than producing competing House and Senate versions.
- Ultimately, an omnibus bill or series of appropriations bills will determine final FY14 funding levels for programs. This agreement does not specify those levels.
The Budget Battle: A Timeline
October 1–16, 2013 - Federal government shutdown
December 13, 2013 – Deadline for the joint House/Senate committee (Son of Super Committee) to make recommendations on the FY14 budget
January 15, 2014 – Congress’ Continuing Resolution for FY14, passed on October 16, expires and year two of sequestration —across-the-board cuts— goes into effect
February 17, 2014 - Next deadline for the debt ceiling
There is a broad, sweeping effort by the U and our allies in the education and research communities to urge Congress to reach a realistic, balanced budget agreement that will eliminate the automatic spending cuts mandated under sequestration.
In October, 74 universities completed a survey about the impacts of sequestration on their campuses. The most commonly cited impacts were a reduction in the number of new federal research grants (70% of responding universities) and delayed research projects (also 70%). While the loss or delay of critical research is serious in itself, it is the other impacts of these reductions and delays—the financial costs, the effects on jobs and careers, and the opportunity costs—that illuminate the real consequences of sequestration. View a summary of survey findings.
Comprehensive immigration reform passed the US Senate in June and is languishing in the House. President Kaler wrote to the Minnesota House delegation urging them to move forward on immigration.
The reauthorization of the Farm Bill is caught up in a debate over the Supplemental Nutrition Assistance Program (SNAP, formerly know as food stamps).
Bev Durgan, dean of Extension, announced earlier this month that due to cuts in the SNAP education program earlier this year, and with no clear path forward for the Farm Bill, she will have to eliminate some nutrition education positions.
Support for the Humanities
Provost Karen Hanson spearheaded a Committee on Institutional Cooperation (CIC) provost letter urging House and Senate leadership to support funding for the humanities.
U librarian Wendy Pradt Lougee authored a letter to the Minnesota delegation on the importance of humanities funding for our library system.
The U participated in a new report, “Sparking Economic Growth,” produced by the Science Coalition. “Sparking” is a collection of 100+ companies created from federally funded research. The report is being used on Capitol Hill to underscore the importance of federal research to innovation and economic development.
Jay Shrankler, Executive Director of the Office of Technology Commercialization, wrote to the Minnesota House delegation in support of the TRANSFER Act (“Technology and Research Accelerating National Security and Future Economic Resiliency”). The TRANSFER Act would enable more effective commercialization of new technologies. The bill brings attention to the market viability of early stage technologies and would provide support for universities to undertake proof-of-concept, scaling-up and modeling.
The Center for Transportation Studies hosted a legislative staff day, which included an overview of transportation research and a tour of the Minnesota Traffic Observatory and the HumanFIRST driving simulation lab.
The State and Federal Government Relations team hosted legislative staff for a day-long tour of U facilities—from the new cancer-cardio building to the turf grass plots in St. Paul.
Julie Selander, director of One Stop Services and Veterans Services, participated in a roundtable hosted by Senator Amy Klobuchar and St. Mary’s University on veterans and higher education.
Senator Klobuchar visited the Wellstone Center for Muscular Dystrophy to learn more about the research and to raise awareness of the importance of NIH research.
Senator Klobuchar visited the Rochester campus for a press conference with Mayo researchers to underscore the critical role of NIH research in discovering treatments for Alzheimer’s disease.
Rep. Keith Ellison participated in a community discussion at the Humphrey School and a showing of the film, “Koran by Heart,” part of a federally funded grant entitled “Muslim Journeys.”
Representative Erik Paulsen visited the Medical Device Center and met with Dr. John Andrews, associate dean for graduate medical education, to discuss the importance of GME funding.
On The Hill
President Kaler met with Chairman John Kline and Rep. Betty McCollum in October in Washington. They discussed issues, from the reauthorization of the higher education act to the impact of sequestration on our institution.
On November 19, a bipartisan group of 33 Senators, including Senators Klobuchar and Franken, wrote to leadership encouraging strong funding of NIH in the FY14 budget negotiations.
On November 20, Senator Klobuchar and Senator Susan Collins (R-ME) introduced a resolution urging the doubling of funding for Alzheimer’s research by 2015.
Student Loan Interest Rate
Before adjourning for August recess, Congress passed the Smarter Solutions for Students Act (aka Bipartisan Student Loan Certainty Act). The final bill is similar to the market-based plan offered by the administration and Chairman John Kline’s (R-MN) House Education and Workforce Committee.
The measure pegs the interest rate for federally subsidized and unsubsidized loans for undergraduates at the 10-year Treasury bond rate plus 2.05%, with rates for unsubsidized loans for graduate students at plus 3.6%, and for parents at plus 4.6%. The rates would be capped at 8.25% for undergraduates, at 9.5% for graduate students, and at 10.5% for parents. For undergraduates this fall, the loan rate will be 3.86%.
The Fiscal Situation
With federal FY14 set to begin on October 1, you can count on a Continuing Resolution (CR). However, there is no agreement on how long a CR would last or at what funding level. Further complicating the situation is the expectation that negotiations over FY14 spending and the future of sequestration will run right up to a fall deadline for raising the debt ceiling.
The House and Senate have been working from different blueprints for FY14 appropriations—amounting to a $91 billion difference in their budgets for discretionary spending—so it was no surprise when the process ground to a halt in both chambers in late July.
In late June, the Senate passed a comprehensive immigration reform bill: Border Security, Economic Opportunity and Immigration Modernization Act. Our advocacy efforts focused on three major areas of concern to the U: 1) modernization of the green card process for advanced degree graduates; 2) modernization of non-immigrant visas; 3) the DREAM Act, which would provide a path to citizenship for children brought to the United States illegally at an early age and who attend college or serve in the military.
In a letter of thanks to Senator Klobuchar, President Kaler stated, “The Senate has taken the first step forward in fixing a broken immigration system that has failed many who wish to study at US higher education institutions and those that wish to work and/or become Permanent Residents in the US after they graduate. Senate passage of immigration reform represents an important step forward for universities, which stand to benefit from provisions that will allow a new generation of immigrants as well as international students and scholars to fill classrooms and research laboratories.”
The presidents of 165 universities, including Eric Kaler, signed an open letter to President Obama and members of Congress on the federal “innovation deficit.” The letter ran in late July as a two-page advertisement in the Washington newspaper Politico.
The letter argues that the declining federal investment in research, plus the automatic budget cuts via sequestration, are undermining our nation’s ability to discover, innovate, and grow our economy.
The U’s News Service worked diligently to build on this national effort here in the Twin Cities and was successful:
• A Star Tribune column by Lee Shafer focused on the importance of funding University research, and how University-IP drives innovation, creates jobs, and advances Minnesota's economy. Mr. Shafer used the U’s Center for Genome Engineering as an example.
• Brian Herman penned a commentary for MinnPost on Minnesota’s innovation deficit.
• Minnesota Public Radio's Washington correspondent, Brett Neely, spoke to Dr. Herman on the impact of sequestration on Minnesota.
Coming Soon: Reauthorization of the Higher Education Act
Chairman John Kline (R-MN) and Ranking Member George Miller (D-CA) of the House Education and Workforce Committee requested comments and suggestions for the upcoming reauthorization of the Higher Education Act. This act governs higher education—student loans, work-study, accreditation, campus safety, international education, and much more.
Many national associations responded, as well as a number of universities, including the University of Minnesota. Vice Provost and Dean of Undergraduate Education Robert McMaster responded to the committee and focused on several key aspects of undergraduate education.
President Kaler participated in a meeting of the Department of Homeland Security’s Academic Advisory Council in July and stopped by the White House to greet U CLA student Dan Lightfoot (summer intern) and U alum Andrea Mokros (CLA 1999, director of strategic planning). Kaler also met with reporters from Inside Higher Education and the Chronicle of Higher Education.
In June, Department of Pediatrics faculty member Rebecca Shlafer participated in a White House event announcing an initiative spearheaded by Sesame Street, “Little Children, Big Challenges: Incarceration,” to address the needs of children with an incarcerated parent.
The leadership of the National Center for Interprofessional Practice and Education (Barbara Brandt, Frank Cerra, Jeny Kurtz) visited with Minnesota delegation health staffers to discuss the work of the center.
The U’s Humphrey School hosted a Department of Education public forum in May. Participants came from throughout the Midwest and commented on a myriad of higher education issues such as student finance, gainful employment regulations, and tax issues.
Rep. Erik Paulsen (R-MN) visited Amplatz Children’s Hospital in early July.
Rep. Rick Nolan (D-MN) toured the Soudan Underground Laboratory over the July 4 break.
Law School professor Fred Morrison met with staffers for Senator Franken to discuss the University’s approach to implementing the Affordable Care Act.
Chief Information Officer Scott Studham spoke with Senator Klobchar’s staff on the U’s concern around cybersecurity.
Paul Savereid of the Office of the General Council spoke with Senator Franken’s Judiciary Committee staff about intellectual property and patent issues.
On May 21, the U.S. Senate Judiciary Committee passed a comprehensive immigration bill. Both Minnesota Sens. Amy Klobuchar (D-MN) and Al Franken (D-MN) are members of the Judiciary Committee.
Over the past two weeks, the committee considered hundreds of amendments to the bipartisan Gang of Eight bill. Some amendments the higher education community and the U supported:
- Inclusion of the Development, Relief, and Education for Alien Minors (DREAM) Act, which offers a path to permanent residency for those brought to the United States illegally as children;
- An exemption from the cap on employment-based green cards for those who have earned an advanced science or engineering degree;
- A provision allowing H-1B recipients to revalidate their temporary visas in the United States, rather than having to return to their home country; and
- Removal of the current requirement that students prove they will return home after completing their studies.
We also expressed concern that the bill defines science, technology, engineering, and mathematics (STEM) degrees too narrowly and suggested using instead the broader Department of Homeland Security definition. Additionally, we urged that the bill exempt higher education from the proposed new fees for STEM labor certification and J-1 visas.
The House of Representative's Gang of Eight has reportedly reached an agreement in principle and is working quickly to produce a bill. Furthermore, the House Judiciary Committee appears to be ready to mark-up individual bills (high-skilled immigration reform, mandatory employment verification, and agricultural worker visas).
Student Loan Interest Rate
Chairman John Kline's (R-MN) Smarter Solutions for Students Act passed the House Education and Workforce Committee last week. The bill addresses the July 1 doubling of the student loan interest rate with a long-term solution that pegs the interest rate to the 10-year Treasury bond and caps the rate at 8.5% percent.
The House is expected to consider the bill this week.
The Senate will consider a bill that would freeze the existing rate of 3.4% for two years.
Both the House and Senate Agriculture committees passed their versions of farm bills last week. The full Senate will take up the bill this week, and the House Committee leadership hopes to bring its bill to the floor in June. Both bills reduce spending by billions of dollars over five years.
Sen. Klobuchar, an Ag Committee member, was successful in offering an amendment that would increase the authorizing levels from $100 million to $200 million for the newly created Foundation for Food and Agriculture Research.
High Quality Research Act
The higher ed community continues to engage with key members of the House Science, Space, and Technology Committee about a draft legislative proposal that would impose new requirements in the awarding of grants by the National Science Foundation (NSF). What is driving such proposals is concern about "questionable grants" awarded by NSF, primarily in the social and behavioral sciences. The chairman of the committee, Rep. Lamar Smith (R-TX), has expressed 1) concerns about the NSF merit review process, and 2) his interest in priority-setting in federal research funding.
On The Hill
Office of Technology Commercialization leaders Jay Shrankler and Eric Hockert met with Minnesota congressional staff to update them on OTC's efforts to create companies out of U discoveries.
Extension's Public Issues Leadership Workshop (PILD) team met with agriculture staffers in the Minnesota delegation to talk about their work throughout Minnesota.
Eric Kaler attended a Science Coalition reception honoring U.S. Rep. Ron Kind (D-WI), a U law school alum, as a "Champion of Science." Kaler also met with Rep. Rick Nolan (D-MN), the new representative for Minnesota's 8th District and a U alum.
Sens. Klobuchar and Franken introduced a resolution in the Senate honoring the University's women's hockey team NCAA championship. In addition, a letter signed by the entire Minnesota delegation was sent to President Obama, urging him to honor the team at the White House.
Kris Wright, director of student finance, met with House Education and Workforce Committee staff as part of the Direct Loan Coalition.
The U's Student Legislative Coalition participated in a Big Ten student visit to DC that included meetings with the Administration and on Capitol Hill. Rep. Tim Walz (D-MN) arranged for the Minnesota team to attend the annual Hotdish Cook-off, which included all members of the Minnesota delegation.
A group of 4th-year pharmacy students and faculty visited with policy-makers in the health care field, as well as with staff for Sens. Klobuchar and Franken.
Kamil Urgbil (CMMR) and Sen. Klobuchar held a roundtable at CMMR to discuss President Obama's BRAIN Initiative. Roundtable participants included advocates for research in epilepsy, autism, Alzheimer's and Parkinson's diseases. Sen. Klobuchar toured the lab and answered questions as part of the session. There was great coverage in the Star Tribune.
Congressman Keith Ellison (D-MN) visited the Community-University Health Clinic (CUHHC). He met with CUHHC leadership and toured the clinic.
Rep. Ellison led a discussion on student debt in a Science Teaching and Student Services classroom. Panel participants included U student leadership, MPIRG and Minnesota's Office of Higher Education.
Sen. Franken held a higher education roundtable at the University of Minnesota-Rochester campus to discuss career preparation and engaging with industry.
Tom Giaimo—a junior computer science major, wrestler and Air Force ROTC cadet—served as a judge for Sen. Franken's second annual poetry contest, "My Experience as a Military Child."
Sen. Franken spoke at the First Robotics conference and visited with participants afterward at Mariucci and Williams arenas.
University of Minnesota students participated in a roundtable at St. Paul College. Sen. Franken organized the event, and Gov. Dayton and Director Pogemiller participated. U students who spoke about their challenges were Taylor Williams (MSA President), Elizabeth Nelson (CEHD) and Zahra Forouzan Karimian (Pharmacy).
Many thanks to our Minnesota delegation members who were graduation speakers this spring: Sen. Franken at the Morris campus and Rep. Betty McCollum (D-MN) at the College of Food, Agricultural and Natural Resource Sciences.
Two weeks ago, the US Senate and House successfully negotiated and passed a FY13 Continuing Resolution to fund the federal government through September—the balance of the federal fiscal year.
While nothing is simple in the world of federal budgeting, we can summarize that FY13 funding levels will be at the FY12 level minus the 5% sequestration cut.
A few examples of research agency funding that defy easy explanation:
- National Science Foundation (NSF): The sequestration cut will be 2.9% instead of 5%.
- National Institute of Health: The budget increased $67 million but will take the full 5% sequestration cut ($1.5 billion).
- Agriculture and Food Research Initiative: Funding increased to $290 million. Sequestration will reduce the budget to about $274 million, for a net increase of $10 million.
- Department of Energy Office of Science: The budget will be cut $44 million before the 5% sequestration cut.
During the Senate debate two amendments passed of importance to the University:
- The Coburn-McCain amendment states that NSF may only fund political science research that demonstrates national security value or economic benefit. The impact of this provision will depend in part on how broadly the NSF director interprets the language.
- The Inhofe-Hagen amendment mandates that the Department of Defense continue its program of tuition assistance for active duty military. Post-sequestration, several branches of the Armed Services announced they would eliminate the tuition assistance program.
Kicking off FY 2014
The House of Representative passed the FY14 budget resolution offered by Budget Committee chair Paul Ryan (R-WI) in mid March. The House budget resolution aims to bring the federal books into balance in 10 years by repealing President Obama's health care law, overhauling Medicare, and paring back government spending.
The Senate passed a budget resolution before adjourning for the Passover/Easter break. The resolution calls for $975 billion in increased tax revenues and for replacing the sequester with a mix of tax revenues, and cuts to defense and non-defense spending at about half the amount that will happen under the sequester. The higher education associations sent a letter in support of the Senate budget while raising concerns about reducing the charitable deduction in the tax code, which the Senate is considering.
We are still waiting on the final piece of the budget puzzle—President Obama's proposed FY14 budget. While traditionally released in early February, the president's budget proposal was delayed while Congress resolved the FY13 budget and sequestration. We anticipate the president's budget next week.
The budget sequestration went into effect on March 1—5%-7% cuts to most federal programs for a total of $85 billion dollars, which need to come out of the budget between March 1 and September 30.
Pamela Webb of the U's Sponsored Projects Administration has set-up a website to gather information from federal agencies on their plans to implement sequestration cuts across research accounts. Please check the site for updates and to share information.
In the news we continue to hear about the cancellation of White House tours and military fly-overs, and about the closure of entrances to Capitol Hills offices and national parks. A Washington Post chart tracks what the federal agencies are proposing.
In February, Chairman John Kline (R-MN) visited the Twin Cities campus. He met with University leaders to discuss higher education policy, financial aid, and costs that drive higher education. He also visited one of the U's Department of Defense-funded labs—the Academic Health Center's SimPORTAL.
On the Hill
Larry Zanko of the Natural Resources Research Institute attended the Transportation Research Board and met with Rep. Nolan, the new representative from the 8th District.
Duluth's dean of engineering, James Riehl, participated in a national conference of engineering deans and visited members of the Minnesota delegation.
The annual CARET meeting was held in late February, and leadership from the College of Food Agricultural and Natural Resource Sciences and from Extension met with the entire Minnesota Congressional delegation.
Dean Trevor Ames met with Members of the Minnesota delegation as a follow-up to the American VetMed Association annual conference.
Going, going…over the fiscal cliff
It looks like we are headed over the federal fiscal cliff—across-the-board cuts set in motion in August 2011 by the Budget Control Act.
Simply put, the budget cuts that go into effect at midnight tonight (March 1) are to all non-defense discretionary accounts, Medicare (cut falls on providers) and the Department of Defense. Medicaid, Social Security and veterans' benefits are exempt, as are Pell Grants. Cuts from sequestration will continue over a ten-year period.
Federal agencies have been slow to reveal their plans for the cuts. The U's Sponsored Projects Administration (SPA) is posting information from research agencies as it becomes available. Be sure to check SPA's site and contact them if you receive any clear directions regarding a grant or contract.
Brian Herman, the University of Minnesota's vice president for research, sent a note to faculty last week with recommendations for preparing for the cuts.
Several organizations have posted state-by-state impacts to research (Science Works for Us) and school-by-school impacts on student aid (National Association of Student Financial Aid Administrator).
On Thursday, February 28, Science Works for Us issued its last press release before the March 1 deadline: "Sequester will have a devastating impact on American's research enterprise."
We continue to work closely with our national associations and the Minnesota Congressional delegation to communicate the effects of these cuts to the University of Minnesota.
Important federal dates
March 1 Sequestration deadline
Mid-March Obama administration releases proposed FY14 budget
March 27 FY13 Continuing Resolution expires
May 19 Federal debt reaches limit, again
Articles of Interest
The coming R&D Crash
The Washington Post, 2/26/13
Bad medicine: cutting American health research will harm the world
The Economist, 3/2/13
Ringing in the New Year—Congressional style
On the first day of 2013, Congress met to pass the American Taxpayer Relief Act of 2012, averting the impending ‘fiscal cliff’. However, in spite of the passage of the legislation, additional items will need to be addressed in the coming months.
Included in the legislation
- Increases marginal tax rates for individuals making more than $400,000/year or families earning more than $450,000/year
- Extends Bush era tax cuts permanently for those under $400,000/$450,000 threshold
- Extends the American Opportunity Tax Credit (a tax credit for up to $2,500 for college tuition and related expenses) through 2017
- Extends the Medicare Sustainable Growth Rate for one year
- Extends the Farm Bill (expired on September 30, 2012) for nine months
- Extends expanded Unemployment Insurance for one year
- Ends payroll tax “holiday”
- Extends tuition tax credit and the research tax credit for one year
- Extends the IRA Rollover for two years
- Permanently extends the deduction for student loan interest, the exclusion from income of scholarship dollars, employer-provided education assistance programs (Section 127), and the Coverdell Education Savings accounts
What the legislation did not address
Numerous items were not included in the legislation, and will require attention by the 113th Congress.
- Sequester delayed for two months
Automatic spending cuts (8 percent for most federal spending, 2 percent for Medicare and Medicaid) that would have become effective January 3, 2013 have been postponed until March 27, 2013. Further, changes have been made to the sequestration fiscal target. The total cuts needed have been reduced by $24 billion (from $1.2 trillion to $1.176 trillion) because of new revenues (from Roth IRA rollovers) and cuts to budget caps set by the Budget Control Act in August 2011.
- Debt ceiling
Congress will still need to act to raise (or not raise) the federal debt ceiling in the first quarter of 2013
- Emergency Funding for Hurricane Sandy reconstruction
How the votes were tallied
Of the 535 voting members of Congress, those voting in favor of passing the act included Minnesota Senators Klobuchar and Franken; as well as their colleagues in the House of Representatives, Representatives Ellison, Kline, McCollum, and Walz.
Representatives Bachmann, Cravaack, Paulsen, and Peterson voted against the legislation.
View a detailed summary of the act. For more information, visit the Washington Post ‘s Wonkbook article Everything you need to know the fiscal cliff deal and for an interesting look at the deal, the 10 weirdest parts of the ‘fiscal cliff’ bill.
“The document’s message is one of big ambitions with fewer resources.”
-Nature, reviewing the Obama administration’s FY 2013 budget proposal on February 14, 2012.
In his fourth budget proposal, President Obama continued his support of research and education proposals important to research universities like the University of Minnesota, despite a severely crimped overall budget environment. Only in the area of biomedical research, where the administration proposed to flat fund the National Institutes of Health, is the budget proposal a disappointment.
Although it kicks off the appropriations process in Congress by giving lawmakers something to react to, the President’s Budget Proposal (PBR) is by no means the last word on how federal agencies and programs will fare in their eventual funding for FY 2013.
If the recent past is any guide, lawmakers will struggle to pass the 12 appropriations bills that fund the federal government by the middle of FY 2013, much less by its start on October 1, 2012. Adding further uncertainty are the fall elections, which are likely to heat up the already acrimonious environment on Capitol Hill, and the scheduled across-the-board cuts dubbed “sequestration,” which are set to cut many federal programs in January 2013.
The cloudy future aside, the president’s budget request is a good opening gambit on higher education-centered priorities. The president’s FY 2013 budget places a strong priority on education and research. The White House’s budget overview says: “The Budget targets scarce federal resources to the areas critical to growing the economy and restoring middle-class security: education and skills for American workers, innovation and manufacturing, clean energy, and infrastructure.”
If enacted, the request would provide $140.8 billion for research and development, which the administration says would increase spending in non-defense R&D by 5 percent over FY 2012.
The Big Picture
The president's budget calls for spending of $3.8 trillion in FY 2013. Last year’s budget agreement, the Budget Control Act (BCA), set the FY 2013 discretionary spending level at $1.047 trillion, essentially the same as for FY 2012.
The president’s plan does not reflect the additional $1.2 trillion in across-the-board cuts mandated by the BCA to kick in on January 2, 2013, in the sequestration procedure. Unless Congress takes steps to prevent them, the cuts will be taken half from domestic discretionary spending and half from defense discretionary spending.
Department of Education
The FY 2013 budget would raise the Department of Education (ED) budget by 2.5 percent, to nearly $70 billion, the largest increase for any domestic agency in the proposal. The budget proposes to fund the maximum Pell Grant award at $5,635, double the number of college work study jobs over five years, and extend the 3.4 percent interest rate on subsidized Stafford student loans, which otherwise would rise to 6.8 percent on July 1.
The Pell maximum grant is scheduled to be boosted $85 over the FY 2012 level under the Student Aid and Fiscal Responsibility Act of 2010 (SAFRA).
Hinted at in the request is the continued reallocation of other student aid programs to keep Pell at its scheduled level. The budget estimates a 10-year funding shortfall for the Pell Grant program, with a $9.4 billion shortfall in FY 2014. It would make a down payment toward the long-term funding gap by including measures to “promote borrowers’ timely completion of their education programs and reduce costs associated with providing defaulted loan borrowers opportunities to repay their credit.” Specifically, the reforms would include eliminating the in-school subsidy on subsidized Stafford loans to 150 percent of normal program length and reducing payments to guarantee agencies in the Federal Family Education Loan (FFEL) program.
As the president said in his State of the Union address, he proposes to make a number of changes in student aid programs, changes aimed at encouraging colleges and universities to curb tuition increases, and encouraging states to reinvest in higher education. This includes changing federal “campus-based” aid programs, such as Perkins Loans, to shift aid toward institutions that “keep their tuition and tuition increases low,” enroll and graduate relatively high numbers of Pell-eligible students, and provide “good value.” The budget does not offer many new details of the proposed campus-based program changes, particularly in defining key terms such as “good value.”
The PBR also includes creating a $1 billion “Race to the Top” program, modeled after the K-12 No Child Left Behind program, to encourage states and institutions to implement reforms focused on affordability and improved outcomes. The administration would create a new $55 million initiative, “First in the World” grants, to increase college access and completion and improve education productivity.
In other corners of ED, the Institute for Education Sciences would receive $621 million, a $27.5 million increase above FY 2012 levels, and International Education and Foreign Languages Studies accounts would net $75.7 million, a $1.7 million increase above FY 2012. The administration is also seeking $30 million each for ED and the National Science Foundation (NSF) in a joint program to develop, validate, and replicate evidence-based teaching programs for math. TRIO and Gear Up program would be flat-funded.
See more about ED’s budget request.
National Science Foundation
The FY 2013 budget request for NSF is $7.4 billion, an increase of $340 million, or 4.8 percent, over FY 2012.
Within NSF’s Research and Related Activities Directorate, the administration boosts most of its accounts, but allows the healthiest increases to computer and information science, engineering, and integrative activities.
The NSF budget would also boost graduate research fellowships by 11 percent, or $11.8 million, to $121.4 million.
The Major Research Equipment and Facilities Construction Account would remain flat at $196 million.
As part of its broader initiative to promoted advanced manufacturing, the administration is proposing $149 million to support new manufacturing technology programs at NSF.
See more about the NSF budget request.
National Institutes of Health
It may be at the NIH that the Obama administration budget request most reflects the big ambitions/fewer resources dichotomy pointed out by Nature magazine at the beginning of this report. The president's FY 2013 budget provides flat funding for the National Institutes of Health (NIH) at $30.7 billion, but those funds are expected to support 2 percent more new grants than in FY 2012.
According to the Association of American Medical Colleges, the proposal would make FY 2013 the 10th year in a row that NIH’s budget has not kept place with biomedical research inflation.
NIH estimates that it will support 9,415 new and competing Research Project Grants (RPGs) in FY 2013, an increase of 672 above FY 2012. (The total number of RPGs is expected to be 35,888.)
To achieve these new grant volumes, and to continue to focus on funding first time investigators, NIH intends in FY 2013 to discontinue outyear inflationary allowances for competing and continuation grants; reduce noncompeting continuation grants by 1 percent below the FY 2012 level, and negotiate the budgets of competing grants to avoid growth in the average award size.
NIH will also introduce additional review by Institute and Center Councils for applications from principal investigators who already receive more than $1.5 million per year.
The budget maintains the salary rate chargeable to an NIH grant at Executive Level II, the cap it was cut to in FY 2012.
Most NIH institutes would be flat funded under the Obama administration proposal. However, the new National Center for Advancing Translational Sciences would receive a boost. Also mentioned is the creation of a new Center for Regenerative Medicine, to take advantage of the potential of induced pluripotent stem cells.
The budget proposal makes mention of the dramatic drop in the cost of sequencing genomes has dropped significantly in recent years, “[which] is likely to lead to dramatic changes in how clinicians diagnose and treat disease and will enable researchers to make even more rapid and efficient progress in developing new diagnostic, treatment, and prevention tools.”
See more about the NIH budget request (pages 34-39).
Other Health Sciences Funding
Centers for Disease Control and Prevention (CDC): The budget requests $5.068 billion for CDC, a $664 million (11.6 percent) cut below the comparable figure in FY 2012. As was true in FY 2012 and FY 2011, the budget assumes a significant transfer of funds to CDC from the Prevention and Public Health Fund, a mandatory source of funding created under the Affordable Care Act.
Indirect Medical Education (IME): Although the changes are slated to begin FY 2014, the budget document assumes cuts to Medicare’s support for IME. The administration proposes to increase the “value” of the medical education payments by cutting them $9.7 billion or 10 percent over 10 years starting in FY 2014. In doing so, the administration seeks to correct the “imbalance” between current IME payments and actual patient care costs to teaching hospital identified by the Medicare Payment Advisory Commission (MedPAC). The budget proposal says the Health and Human Services (HHS) secretary has the authority to set standards for teaching hospital that “encourage training of primary care residents,” although no details on this authority have been released.
Children’s Hospitals Graduate Medical Education (CHGME): The president proposes $88 million for CHGME, a $177 million (67 percent) cut to the program. According to an accompanying budget document, the administration seeks to cease support for “indirect costs associated with graduate medical education” and to focus CHGME grants exclusively on “direct” costs, defined as “expenditures related to stipends and fringe benefits for residents; salaries and fringe benefits of supervising faculty; cost associated with providing the GME training program; and, allocated institutional overhead costs.”
Health Professions: The president’s budget proposes $228 million for Health Resources and Services Administration’s (HRSA) Title VII health professions programs, a $40 million (15 percent) cut below FY 2012. The budget proposes to eliminate funding for the Title VII Health Careers Opportunity Program (HCOP) diversity pipeline program and the Area Health Education Centers (AHEC) program.
Department of Agriculture
The US Department of Agriculture (USDA) National Institute of Food and Agriculture (NIFA) budget request for FY 2013 includes $732.7 million for research and education activities, an increase of $27.1 million, or 3.8 percent, over the current funding level.
Under NIFA’s research and education division, the Agriculture and Food Research Initiative (AFRI) would see an increase of $60.5 million, or 22.9 percent, for a total of $325.0 million. Other funds of interest to the University such as Hatch Act, McIntire-Stennis, and Evans-Allen would be level funded or slightly cut. An animal health and disease research fund would be zeroed out.
NIFA’s extension programs would be funded at $462.5 million, a decrease of $12.8 million, or 2.7 percent from FY 2012. Smith-Lever funds would be largely flat funded.
The administration’s request for “Integrated Activities” includes the creation of new programs, including a Crop Protection program as well as a Sustainable Agriculture Federal-State Matching Grant program.
Department of Energy (DOE)
Overall, the Department of Energy (DOE) would be provided $27.2 billion in discretionary funds, a 3.2 percent increase above the FY 2012 enacted level. Within DOE, the Office of Science (Science) would see an increase of $118 million, or 2.4 percent, to a total of $4.99 billion in FY 2013. Within the Office of Science, basic energy sciences, biological and environmental research, and computing research would receive funding boosts, while high energy physics and nuclear physics would face slight cuts.
The administration is calling on Congress to fund the more high-risk work of ARPA-E at $350 million next year, up from $275 million this year, as well the five current Energy Innovation Hubs. DOE seeks to create an additional new hub on Electricity Systems, funded within the Office of Electricity Delivery and Energy Reliability, addressing the challenges of modernizing the grid.
Continuing the budget’s cross-cutting theme of advanced manufacturing, DOE’s request includes $290 million for the Advanced Manufacturing Office at Energy Efficiency and Renewable Energy (EERE).
See more about the DOE budget request.
Department of Defense (DOD)
Although overall discretionary spending at DOD would drop by 1 percent, the budget summary says that funding for department-wide basic research and for the Defense Advanced Research Projects Agency (DARPA) is “slightly above the 2012 enacted levels.” For 6.1 basic research programs, the administration proposes $2.117 billion, which is $4.5 million or 0.2 percent above the FY 2012 level.
Investments in basic research and DARPA will, according to the proposal, “[a]llow the Nation to explore diverse scientific principles and technological applications, including bio-defense, cybersecurity, information access, and cleaner and more efficient energy use, robotics, and advanced computing.”
The budget’s FY 2013 space agency request is $17.7 billion, or $59 million below the FY 2012 level. NASA’s science portfolio would be funded at $4.9 billion, a reduction of $161.8 million, or 3.2 percent, from the FY 2012 level. Within the science portfolio total, funding for earth science, heliophysics, and the James Webb Space Telescope would increase, while funding would be reduced for planetary science and for astrophysics. Funding for aeronautics would be cut by about $18 million, to $551.5 million, and funding for education would be reduced by $36 million, to $100 million. The education category includes $24 million for the National Space Grant College and Fellowship Program.
The NASA budget seems to reflect that this year’s top line number is significantly smaller than last year’s projections and that the costs of the Webb telescope continue to climb.
See more about the NASA Budget Request.
President’s Budget Request and Previous Years’ Funding
(in millions of dollars unless noted)
On Campus and on the Hill
Senator Al Franken visited the Twin Cities campus on January 20 and met with President Kaler. Franken was later briefed on technology commercialization by Vice President Tim Mulcahy and Office of Technology Commercialization Director Jay Schrankler, and he went on to visit Prof. Marc Hillmeyer’s sustainable polymers lab.
Tom Schmidt from the Office of Student Finance visited delegation offices to discuss issues around campus-based financial aid in coordination with the annual meeting of the Coalition of Higher Education Assistance Organizations.
Prof. Deb Swackhamer visited Hill offices to highlight the work of the Water Resources Center.
The School of Public Health’s Sue Gerberich, Pat Mcgovern, and Bruce Alexander attended a meeting of the Association of University Programs in Occupational Safety and Health and visited offices of the Minnesota delegation.
Dean John Finnegan and Rosie Jones of the School of Public Health participated in a meeting of the Association of Schools of Public Health and visited Capitol Hill offices and the Office of Management and Budget.
Greg Hestness, Chief Law Enforcement Officer at UMTC, participated in Hill meetings with the International Association of Campus Law Enforcement Administrators.
Dean Steven Crouch visited Minnesota delegation offices in February to talk about the College of Science and Engineering’s role in Minnesota workforce and CSE’s increasingly qualified students.
Extension’s annual CARET delegation visited Minnesota offices on the Hill recently to talk about Extension’s impact in Minnesota communities.
Articles of Interest:
Romney and Higher Ed
Inside Higher Ed, February 29, 2012
House Votes to Repeal 2 Controversial Education Department Rules
Chronicle of Higher Education, February 28, 2012
Legislation to Bar Public-Access Requirement on Federal Research Is Dead
Chronicle of Higher Education, February 27, 2012
For-Profits Get Half of Military Tuition Benefits
February 24, 2012 - 3:00am
The Actual Careers that Result from Career Colleges
Washington Monthly, February 22, 2012
Revisiting the Hypothesis That Tuition Rises With Student Aid
Education Week, February 22, 2012
Preparing for the Minnesota Redistricting Maps
MPR, February 21, 2012
Running for President? No Experience Necessary
Michael Kinsley, Washington Monthly, February 17, 2012
Francis Collins: 3 Scientific Breakthroughs Changing Medicine
MedScape, February 15, 2012
Obama shoots for science increase
Nature, February 14, 2012
NSF Tops Research Agencies With a $340-Million Boost
ScienceInsider, February 14, 2012
NIH skims and churns its way to new grants
Nature, February 14, 2012
President’s 2013 Budget and NIH Research Grants
Sally Rockne’s NIH blog, February 13, 2012
Obama Budget Asks for 1% Boost in Research
ScienceInsider, February 13, 2012
A Flat Budget for NIH in 2013
ScienceInsider, February 13, 2012
What Scientist Shortage?
Beryl Lieff Benderly, Columbia Journalism Review, January/February 2012
College presidents wary of Obama's cost-control tuition plan
USAToday, January 28, 2012
Budget cuts hit domestic programs harder than defense
Wonkbook, Washington Post, January 4, 2012