Washington Update: House Budget Resolution; Tax Extenders

April 2, 2014—House Budget Committee Chairman Paul Ryan (R-WI) released his FY2015 Budget Resolution yesterday, which includes more than $5 trillion in cuts over the next 10 years. APLU Congressional Affairs staff are working with member universities and Congressional offices to advocate for funding for programs important to public universities.

In addition, APLU joined with other higher education associations to urge an extension of the deduction for tuition and fees and the IRA charitable rollover in any tax extenders package that may be considered this year.

HOUSE BUDGET CHAIR RELEASES FY2015 BUDGET RESOLUTION

House Budget Committee Chairman Paul Ryan (R-WI) released his FY2015 Budget Resolution yesterday. The House Republican budget cuts spending by $5.1 trillion over the next ten years. While holding FY2015 to the levels agreed to in the Murray-Ryan budget deal from December, for FY2016 and beyond, the budget resolution significantly increases cuts beyond the sequester levels to the non-defense discretionary (NDD) side of the budget. In FY2016, the NDD cap would be lowered 8.5 percent from $492 billion to $450 billion and at the end of the decade NDD would be cut by 22 percent. While this budget resolution will definitely not be taken up by the Senate, the related report refers to this as a “blueprint for the country’s future” and pieces of this proposal will likely make it into appropriations and other bills introduced by the House majority.

Highlights of relevance to the research university community from the Ryan Budget plan include:

• In the Pell Grant program specifically, it proposes:
  • Rolling back certain recent expansions to the needs analysis and recent expansions of the level at which a student qualifies for an automatic zero Expected Family Contribution,
  • Eliminating the administrative fees paid to participating institutions,
  • Consideration of maximum income cap,
  • Eliminating eligibility for less-than-half-time student,
  • Reforming Return of Title IV Funds regulations,
  • Maintaining the maximum award at the 2013-2014 award year of level of $5,730 in each year of the budget window, the next 10 year, and
  • Converting the program to be solely funded through discretionary spending.

• For campus-based student aid programs, the plan recommends also eliminating the administrative fees paid to campuses as schools “already benefit significantly from participating in federal student – aid programs.”
• And it recommends eliminating the in-school interest subsidy for undergraduate students on Direct subsidized federal loans.
• Eliminating funding for the National Endowment for the Arts (NEA) and the National Endowment for the Humanities (NEH).
• For Budget Function 250, which covers “General Science, Space, and Technology,” the Ryan budget provides $27.9 billion in budget authority and allows the committees of jurisdiction to decide the specific funding levels, in order to comply with the spending caps in the resolution. The Ryan Budget offers “Illustrative Policy Options” as examples of how to come up with savings. For example:
  • It suggests focusing on basic research and cites that in FY2014, $64.5 billion dollars was allocated government-wide to research and half of that was dedicated to applied research.
  • The Ryan Budget also suggests federally funding research at the Department of Energy’s Office of Science gets in the way of private investment. He suggests scaling back on applied and commercial research and development at the Office of Science.
  • It also suggests decreasing funding for the Department of Homeland Security Directorate of Science and Technology and shifting the money towards funding frontline missions.

APLU AND OTHER HIGHER EDUCATION ASSOCIATIONS URGE EXTENSION OF TUITION DEDUCTION AND IRA CHARITABLE ROLLOVER

APLU joined with other higher education associations in a letter urging the Chairs and Ranking Members of the House Ways and Means and Senate Finance Committees to include an extension of the deduction for tuition and fees and the IRA charitable rollover in any tax extenders package that may be considered this year. Both of these provisions expired at the end of 2013 and were eliminated or not extended in the recently released comprehensive tax reform “discussion draft” released by Chairman Dave Camp (R-MI). Additionally, Chairman Camp has recently stated that he prefers to seek a permanent solution to the many expired tax provisions and that each provision should be examined one-by-one.