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.
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
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:
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.
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:
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:
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:
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 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:
When Congress returns after the election for a lame duck session, they may:
What’s Left on the Table for November…or Next Year?
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 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.
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:
National Science Foundation (NSF):
Department of Energy (DOE):
Department of Agriculture (USDA):
Department of Defense (DOD):
Department of Education (DEd):
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.
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
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:
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:
During the Senate debate two amendments passed of importance to the University:
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
What the legislation did not address
Numerous items were not included in the legislation, and will require attention by the 113th Congress.
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.
Congress will still need to act to raise (or not raise) the federal debt ceiling in the first quarter of 2013
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.