News and updates

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

Last week, the House of Representatives passed (H.R.1) an $819 billion economic recovery package. The measure includes $550 billion in spending and $275 billion in tax provisions. The legislation passed the House on a 244-188 party line vote. This week, the Senate will continue consideration of its own version (S.1) of an economic recovery package. The partisan divide present in the House may be seen in the Senate to a lesser degree, as many Republicans contend that the legislation includes too much spending on initiatives that will not provide a stimulus to the economy in the near-term. The Senate Finance and Appropriations committees have already approved their respective portions of the legislation, where some Republican concerns were voiced and addressed. Republican leaders in the Senate have not threatened to filibuster the legislation, though their 41 member caucus would permit consideration of the option. Such a move would be hard to sustain, as Democrats would only need to draw support from a couple members of the minority. Olympia Snowe (R-ME) has already expressed support, for at least the tax portion of the bill, through her vote in favor of the legislation in the Senate Finance Committee. President Obama has articulated that he remains open to changes within the bill, during Senate deliberations, which might draw more Republican support.

At present, the higher education provisions of the House and Senate stimulus bills primarily include the following:

The Stimulus and Higher Education

*State Fiscal Stabilization Fund: There are several requirements that states must satisfy with the Secretary of Education in order to access these funds. One requirement provides that states must maintain support for both K-12 and higher education in FY2009 and FY2010 at a minimum of FY2006 levels. There is strong support on the Hill for such a “maintenance of effort” provision in both the House and Senate. A waiver has been suggested as a means for states in dire budgetary situations to access the stabilization funds while still making necessary cuts.

In addition, as currently drafted, the language mandates that states use the money to support higher education in FY2009 and FY2010 at no more than FY2008 levels. In effect, the language could impose a “cap” at the FY2008 levels on the amount that can states can allocate to public higher education from these federal funds. Monies not needed to meet 2008 higher education levels would be used for K-12.

FMAP: The House and Senate bills will each likely provide for an increase of $86.6 billion in the Federal Medical Assistance Percentage (FMAP), which will result in some relief for state budgets.