March 2012
“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.
See more about the USDA budget request.
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.”
See more about the budget request for DOD research programs.
NASA
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
