Category: Budget

House and Senate negotiatiors, in collaboration with White House Chief of Staff Rahm Emanuel and Office of Management and Budget Director Peter Orszag, worked throughout Tuesday night and well into Wednesday to reach an agreement on a $789 billion economic recovery package. The proposed bill is less than the figures that emerged from the House and Senate. As of late Wednesday afternoon, specific details on the final package remained unclear outside of the closed doors of Congress. However, it appears that the House leadership was successful in restoring some of the funds — eliminated in the Senate — for school infrastructure and a State Fiscal Stabilization Fund.

Early (unconfirmed) reports included the following funding of interest to the higher education community: National Oceanic and Atmospheric Administration, $600 million for facilities and equipment; Department of Energy Office of Science, $1.6 billion for basic energy sciences; National Science Foundation, $100 million for the university research instrumentation program, $400 million for national labs, $2.5 billion for highly-rated peer reviewed proposals; National Aeronautics and Space Administration, $1 billion for equipment and instruments; $10 billion for the National Institutes of Health; $3 billion for higher education construction; $15.64 billion for Pell Grants; and $44 billion for education block grants to governors. The Office of Federal Relations will provide confirmed figures for the economic recovery package when they become unavailable.

As expected, late Monday afternoon, the Senate voted to advance the “Nelson-Collins Amendment” to the proposed economic recovery package. The amendment, drafted primarily by Senators Ben Nelson (D-NE) and Susan Collins (R-ME), trimmed the size of the underlying economic recovery bill by approximately $100 billion and garnered enough support (on a 61-36 vote ending debate) to avoid a filibuster. Today, the Senate voted to pass the entire package, which will set-off negotiations between the House and Senate, and involve significant input from the Obama administration. A final package will likely be voted on in both chambers late this week and, if successful, go to the President for signature.

Although the House and Senate versions are quite similar in overall cost, the House bill includes approximately $100 billion more than the Senate in spending. The Senate bill devotes a greater portion of the package to tax cuts. Two items of particular concern at this point include the Senate’s elimination of funding set-aside specifically for infrastructure projects at institutions of higher education, and $40 billion reduction ($79 billion to $39 billion) in funds provide through a State Fiscal Stabilization Fund that would mitigate some of the cuts that states will have to make in their support of K-12 and higher education. We are communicating directly with our delegation, and working with various higher education associates, to make certain that the impact of the Senate cuts is well understood on the Hill. There is an opportunity for some of the proposed Senate cuts to be reinstated before a final bill is passed, but the situation remains precarious because the loss of two or more votes in the Senate (where spending provisions are less popular) when the bill comes up for final consideration will serve as a roadblock.

For a side-by-side chart of the House and Senate (with Nelson-Collins cuts) higher education provisions (click here).

The House leadership has indicated that they will now delay consideration of an omnibus FY09 appropriations bill until after the President’s Day recess. It is possible that some of the spending provisions stripped out of the economic recovery package – in order to gain passage – will be added to the FY09 omnibus.

A procedural rule requiring that 60 senators vote to end debate on a piece of legislation has necessitated a more bi-partisan approach to passing an economic recovery in the Senate as compared to the House of Representatives. A series of amendments are expected to be offered and voted on throughout the day, as has been the case in days past, some beneficial to the higher education community and others detrimental. On Tuesday, Senator Harkin (D-IA) was successful in utilizing the amendment process to have $6.5 billion added to the funding already set-aside for NIH, for a total of nearly $10 billion to the agency. Senator Jeanne Shaheen (D-NH) is expected to offer an amendment that would increase the higher education infrastructure funding level in the Senate bill to $6 billion, which would equal the amount in the House bill.

A package of proposed cuts to the stimulus package is now being worked on by Senators Ben Nelson (D-NE) and Susan Collins (R-ME). The package is designed to scrub funding from the legislation that is not deemed as providing an immediate stimulus to the economy. The Nelson-Collins package is now seen as the only clear path to the 60 votes necessary to avoid a filibuster.

A final economic recovery package is likely to come to a vote in the Senate before Monday February 9th.

The House of Representatives may take up an omnibus fiscal year 2009 appropriations bill this week, which would fund many federal agencies through September 30th of this year. House Majority Leader Steny Hoyer (D-MD) indicated, last week that he would seek to advance the legislation in the next few days, even though work on the higher priority economic recovery package has not been finalized with the Senate.

Last fall, Congress and the Bush Administration were unable to complete work on nine out of the 12 FY09 appropriations bills; only Defense, Homeland Security, and Veterans Affairs were approved and signed into law. Funding for programs covered under the other nine bills was frozen at their FY08 base levels in a continuing resolution that expires on March 6, 2009. Shortly after Congress passes an economic recovery package and an omnibus FY09 Appropriations bill, work will begin on the FY10 appropriations process. The Obama Administration will release a FY10 budget blueprint shortly, and a full budget request will likely emerge from the Obama Administration in April.

Recap of FY09 Funding for Key Agencies/Accounts

In Millions of Dollars

^*Science, Aeronautics, and Exploration