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Category: Budget

NIH Addresses Funding “Cliff”

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Yesterday, the National Institutes of Health director told Senate appropriators that the agency’s funding will face a “cliff” in FY11 when a two-year allocation of $10.4 billion in stimulus money for research runs out.  NIH Director Francis Collins also told committee members that during the past 30 years NIH grant applicants had a 25 percent to 30 percent chance of success at obtaining funding. That level has now slipped to 21 percent and is expected to fall even further to about 15 percent in FY11 as the flow of money provided through the economic stimulus law ends. 

President Obama requested $32 billion for NIH in his FY11 budget, an increase of 3.2 percent. The boost matches the inflationary index for biomedical research. While several members of the committee voiced strong support for the agency’s request they also said the challenging fiscal environment would make it difficult to secure a larger increase than is called for under the President’s proposal.

Senator Arlen Specter (D-PA), a long-time champion for NIH funding, pressed for more funding and called the proposed 3.2 percent boost “disgraceful.”  Specter suggested that scientists should become stronger advocates for NIH funding by highlighting how the stimulus funding has helped spark more interest in biomedical research.  Senator Harkin (D-IA), Chair of the Senate Appropriations Subcommittee on Labor, HHS, and Education, also expressed support for NIH funding but reminded committee members that finding additional funding will be difficult this year.

Update: Retirement, Budget, and Disaster Relief

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The retirement of House Appropriations Chairman David Obey (D-WI) will mark a change in the Democratic leadership of one of Congress’ most powerful committees.  Our own Congressman Norm Dicks (D-WA) appears to be the lead candidate to replace Obey as the top Democrat on Appropriations in the next Congress.  Currently the second-ranking Democrat on the full committee, Dicks has been on the panel since the mid-1970s but didn’t assume the chairmanship of a subcommittee (Interior-Environment) until 2007 when Democrats regained control of the House after 12 years of Republican control. He moved to Chair the Defense Appropriations Subcommittee earlier this year after the death of Congressman Murtha (D-PA). Dicks expressed an interest in chairing the full committee, as well as keeping his current spot on Defense, but the biggest challenge for Democrats is to retain their majority in this fall’s elections. The selection of committee and subcommittee chairmen is made by the Democratic Steering and Policy Committee and must be ratified by the full Democratic Caucus.  This process will begin after November and into the New Year.

House Democratic leaders are meeting today to discuss whether they will move an FY11 budget resolution.  Unfortunately, there had been no appreciable movement toward an agreement on the budget and few expect that to change with today’s meeting.  Obey’s retirement may not have any impact on this year’s appropriations process, which was already facing an unsettled state. Most Members of Congress don’t expect many spending bills to be enacted before the November elections, and there has been talk of the possibility that fewer still may be considered on the House floor. Democrats still haven’t decided whether or not they will move a budget resolution, which would set top-line discretionary funding for the year, because of a disagreement within the Democratic Caucus on whether non-security discretionary spending should be cut.

Meanwhile, Senate leaders may soon decide whether to separately move the FEMA disaster supplemental bill along with aid to the Gulf Coast as opposed to waiting to deal with this issue via the war supplemental measure. Before the oil spill, the House approved HR 4899, a bill making emergency supplemental appropriations for disaster relief and summer jobs, which is intended to replenish funding for FEMA.    When asked about a possible vehicle for providing federal aid for the Gulf Coast oil spill, the Hawaii Democrat referenced the House-passed bill (HR 4899) to replenish FEMA’s depleted disaster relief funding. A complicating factor for providing aid for the oil spill through this bill is that actual needs are not yet known since the event in the Gulf is still unfolding. The House has suggested that they will hold off on moving the war supplemental until other funding needs were known, including for the Gulf Coast.

Senator Harkin Introduces Education Jobs Fund Bill, Senator Murray a Co-Sponsor

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**Updated 4/16/10**

Yesteday Senator Tom Harkin (D-Iowa), chairman of the Senate Health, Education, Labor and Pensions Committee and of the Senate appropriations panel that oversees education funding, introduced a bill that would provide $23 billion for an Education Jobs Fund. The Education Jobs Fund is modeled after the State Fiscal Stabilization Fund (SFSF) portion of the 2009 Recovery Act, equaling almost half the SFSF total and allocated in much the same manner. The new fund is intended to further restore K-12 and higher education state budget reductions in Fiscal Years 2010 and 2011 to prevent additional layoffs as SFSF funds dry up with no state funds to replace them (the so called ‘funding cliff’).  Harkin’s bill is very similar to the Education Jobs Fund contained in the ‘Jobs for Main street Act of 2010’ passed by a narrow margin in the House in December. It is not yet known how much support this bill may have in the Senate. As we await further information and analysis, please find initial thoughts on the bill as it may pertain to Washington State and the UW below.

Funding for Washington State
Initial calculations made by the Congressional Research Service indicate that $478.3 million would be granted to the Governor of the State of Washington to retain or create educational jobs.

  • 95% would be distributed to local educational agencies and public institutions of higher education.
  • 5% could be retained by the state for administrative costs and to support education related state jobs.

It is estimated that this legislation would create or save 1,058 higher education jobs and 5,467 K-12 jobs in the state of Washington.

Distribution of Funds
Funds received under this Act must be used to help restore state education funding for FY 2010 to FY 2009 levels (excluding capital funding, state research funding, or tuition and fee revenue), and to help restore FY 2011 state funding to FY 2010 levels (after the application of SFSF and Education Jobs Fund dollars). In the case of insufficient funds to reach these goals, the Governor shall distribute funds in proportion to the relative reduction in state funding for each sector (K-12 and Higher Education), plus or minus 10% at the Governor’s discretion. Any excess funds shall be awarded to local educational agencies based on their relative budget share.

Use of Funds
Funds provided by this bill must be used to retain or create education jobs, going toward compensation and benefits and other expenses required to retain existing employees or hire new employees, OR to provide on-the-job training activities for education related careers (as defined in section 101(31) of the Workforce Investment Act of 1998). The funds may not be used to restore or supplement a reserve or rainy day fund or to supplant state funds for such an end. Nor may funds be used to reduce or retire debt incurred by the State or to supplant state funds toward such an end.

Maintenance of Effort
To qualify for funds under this act, a state must assure the Secretary of Education that it will continue to meet the MOE requirements laid out in the SFSF provision of the Recovery Act (establishing FY 2006 K-12 and Higher Education state funding levels as a ‘floor’), OR provide each education sector a total state budget share in FY 2010 that is equal to FY 2006, and, for FY 2011, a budget share equal to FY 2009.

Outlook
Arne Duncan, Secretary of Education, expressed strong support for the Harkin bill during a hearing on April 14th. Additionally, Senator Majority Leader Harry Reid has agreed to bring the legislation to the floor. However, a timetable has not been revealed and it remains unclear whether or not the legislation will garner any Republican support. Senator Patty Murray is a co-sponsor of the Harkin bill.

Courtesy of Jessica Thompson

Senate HELP Committee Statement

Text of Legislation

Health Insurance and Student Aid Overhauls Likely Headed for Reconciliation

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Yesterday, during a speech at the White House, President Obama called on Congress to give health care reform an up or down vote before the Easter congressional recess -beginning March 29th. The message seemed to make clear that the President, along with Speaker Pelosi and Majority Leader Reid, intend to pursue passage of health insurance reform through the budget reconciliation process. The process forward would have the House pass the Senate’s version of health reform without changes, sending the legislation to the President for signature. Changes to the Senate’s bill would be done through a separate piece of legislation advanced through the budget reconciliation process, avoiding a filibuster, as only a simple majority vote is required.

House and Senate Democratic leaders are working to finalize a reconciliation bill as early as this week. The reconciliation bill would then need to be scored by the Congressional Budget Office (CBO). As the reconciliation bill is scored by CBO, Democratic leaders will be working with members of their own caucus to gain consensus on a variety of health care issues and working with the Senate Parliamentarian to figure out which provisions can be included in the reconciliation bill since Senate rules prohibit “extraneous matters” from consideration. The reconciliation bill is seen as key to coaxing some House Democrats to vote in favor of the Senate’s bill, which is opposed by some liberal and conservative Democrats.

Since the Congress can only do one reconciliation bill for fiscal year 2010, the Student Aid and Fiscal Responsibility Act (SAFRA) would have to advance along with healthcare, be passed through the normal legislative process, or be deferred until a future date. At present, the votes do not exist in the Senate to advance SAFRA through the normal legislative process. As a result, if it is to happen this year, the reconciliation process is the only possible vehicle. The Senate has yet to reveal its own version of SAFRA. However, the legislation is likely to emerge in the next few weeks, and move rapidly in order to meet the Easter deadline set by the President.

Pell grant recipients interested in providing a testimonial to the Senate on the program’s impact are invited to contact Jonathan Nurse (jnurse@uw.edu).

President Obama’s Health Insurance Reform Plan (Updated 2/22)

Jobs Agenda Replaces Jobs Bill in Senate

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Senate Majority Leader Harry Reid (D-NV), reflecting the reality imposed by the loss of a fillibuster-proof majority, has articulated that he intends to move several small jobs measures through the chamber — as opposed to one large bill — in order to attract some Republican support for non-controversial items. Senator Reid indicated a desire to first move legislation designed to create a tax credit for new jobs, other tax provisions in aid of small businesses, as well as extending federal highway and transportation programs in order to create more infrastructure projects. Senator Reid made no mention of the increased funding for Federal Work Study or an education jobs fund for governors to allocate within their states or an extension of the inrease in Federal Medical Assistance Percentages (FMAP) that aids state budgets -as proposed in the House passed Jobs for Main Street bill. According to the Majority Leader, the House jobs bill will like be broken up into a pieces comprising a broad agenda in the Senate.