Legislation News
Washington Update
August 13, 2007
The House and Senate are in recess for August, but will return on September 4 to finish work on the fiscal year 2008 (FY08) spending bills and several pieces of key legislation, including the Higher Education Act. Prior to adjournment, the House passed all 12 of the FY08 appropriations bills. Although the full Senate has only passed one of its spending bills — the Department of Homeland Security appropriations bill — the Senate Appropriations Committee has passed 11 of the 12, and is scheduled to take up its final spending measure, the Defense appropriations bill, when it reconvenes in September.
The following report is a wrap-up of recent activities in Washington since the July 4 th recess. We will continue to monitor developments on Capitol Hill and around Washington , and provide periodic updates.
LEGISLATIVE UPDATE
Higher Education Act (HEA)
The Senate passed the bipartisan higher education reauthorization bill by a vote of 95-0. The House, meanwhile, passed an extension of HEA to ensure uninterrupted funding of higher education and student aid programs through October 31.
The Senate bill is a five-year reauthorization and overhaul of the law that governs colleges, universities, and federal aid programs which has not been fully renewed since 1998.
The Senate HEA bill sets the Pell Grant authorization level at $6,300. The legislation does not assure an actual Pell Grant increase as any such increase could occur only through the appropriations process.
The bill would significantly increase college reporting requirements about costs and fees, and create a “Higher Education Price Increase Watch List” to rank institutions with tuition and fees that “outpace the applicable price index” for its type of institution. The measure would institute broad restrictions on relationships between lenders and universities consistent with the changes included in the Student Loan Sunshine Act. Among other changes, the Senate bill would phase out the “School as Lender” program by 2012. UCLA participates in School as Lender through the Law School .
The bill would expand eligibility for the Academic Competitiveness Grant program (ACG) and Science and Mathematics Access to Retain Talent (SMART) Grants to permanent resident aliens, part-time students and those enrolled in certain certificate programs.
In addition, the bill would require federally-funded international studies programs to explain how they “will reflect diverse perspectives and a wide range of views.” Finally, the bill would greatly expand the information that colleges must report to the government and to students, including policies on illegal file sharing, the racial and ethnic diversity of financial aid recipients, and fire safety.
In a statement issued by the White House, the Administration expressed concern regarding the bill's higher education price index. “While college affordability is a worthy goal, pricing of services like higher education is complicated, and government attempts to compare and “index” prices can have unintended consequences,” the Administration said. It did, however, express support for efforts to improve transparency and offered to work with Congress to help families make informed, data-driven decisions.
The higher education community has also raised concerns regarding college cost and price indexing provisions and will continue to work with House leadership on bill language that will accurately reflect tuition and fee increases based on various criteria.
Budget Reconciliation Bill
On July 19, the Senate passed the Higher Education Access Act, or reconciliation bill, aimed at overhauling student aid. The bill would provide $17.4 billion in new funding for student aid programs over five years, paid for by reducing lender subsidies. The increased savings would be used to create new Promise Grants for the neediest Pell Grant recipients.
The Senate defeated several amendments including one that would have reduced new funding for student aid programs by about $3 billion. The Senate bill provides loan forgiveness to college graduates who serve in public sector employment for a 10-year period.
The House approved its version of the reconciliation bill on by a vote of 273-149. The bill would cut lender subsidies and redirect the savings to the Pell Grant program; cut the interest rate for Stafford student loans in half; increase Stafford student loan borrowing limits; and create incentives and rewards for institutions with low tuition. The House bill would raise the maximum Pell Grant to $5,200 in 2011 and support other student aid and institutional assistance programs.
The White House has threatened to veto the House bill because it “targets less than 40 percent of its new spending toward needy students while they are in school and includes new mandatory spending that is largely directed to students once they leave college and to new mandatory programs for institutions of higher education.”
In contrast, the White House reaction to the Senate version of the bill stops short of threatening a veto. Instead, it cites a number of concerns including level of savings to the Pell Grant program and use of mandatory funding to create new aid programs.
The House and Senate versions of the bills have a number of major differences that will prove challenging for negotiators. Most significant is the House bill's halving of the interest rates on subsidized student loans, from 6.8 percent to 3.4 percent. The House and Senate will resume negotiations to reconcile differences in the bills upon returning from the recess.
Innovation Agenda
The President signed into law the America COMPETES Act, the comprehensive competitiveness and innovation package prompted by the National Academies' 2005 “Rising Above the Gathering Storm” report.
The final bill includes several key components of the Democrats' “Innovation Agenda” and the President's “American Competitiveness Initiative (ACI),” aimed at improving science, technology, engineering and math (STEM) education, expanding and supporting the national corps of math and science teachers, and increasing U.S. investment in basic research.
In total, the America COMPETES Act authorizes $33.6 billion over fiscal years 2008-2010 for STEM education programs across the federal government. Specifically, this new law:
- authorizes doubling the budget of the National Science Foundation (NSF) from $5.6 billion to $11.2 billion over the next 5 years, and doubling the Department of Energy (DOE) Office of Science budget to more than $5 billion;
- creates new scholarships to recruit graduate students in STEM fields and train them as K-12 math and science teachers, and provides in-service training to current math and science teachers to improve content knowledge and teaching skills;
- establishes an Advanced Research Projects Agency for Energy (ARPA-E) within the Department of Energy (based on the Defense Advanced Research Projects Agency (DARPA) model) to promote high-risk, high-payoff research and development of clean energy technologies;
- replaces the Advanced Technology Program at the Department of Commerce with a new Technology Innovation Program, which will allow universities, for the first time, to participate with small- and medium-sized businesses in this technology development program; and
- includes language on export controls that notes that deemed exports should safeguard U.S. national security and basic research and that the President and Congress should consider the recommendations of the Deemed Exports Advisory Committee.
Although the legislation authorizes billions of dollars for new research and other innovation initiatives, the actual funding amounts for these new programs will be determined by the House and Senate Appropriations Committees. The overwhelming passage of the America COMPETES Act indicates that Members of Congress on both sides of the aisle understand the urgency of these measures and will most likely continue to support them when it comes time to fund these programs.
The UCLA Chancellor's Council on Competitiveness has been advocating for many of the provisions included in the America COMPETES Act for the past two years. In 2005, Council Co-Chair Henry Samueli of Broadcom and Executive Vice Chancellor and Provost Dan Neuman sent a letter to the White House and the California Delegation urging them to increase federal investment in basic research. This past January, Northrop Grumman Chairman and CEO Ron Sugar and Acting Chancellor Norm Abrams sent a follow up letter to House and Senate Leadership reiterating this message. Thanks in large part to efforts such as these, our two California Senators and nearly every member of the Los Angeles area delegation in the House supported this bill (for a complete list of votes, please see: http://clerk.house.gov/evs/2007/roll802.xml).
Energy Bills
The House passed two Energy bills: the New Direction for Energy Independence, National Security and Consumer Protection Act and the Renewable Energy and Energy Conservation Tax Act of 2007. Included in these bills are several provisions of interest to our energy research and education programs, particularly in the areas of renewable energy, biofuels, energy efficiency, climate research, and vehicle technologies.
The New Direction for Energy Independence, National Security and Consumer Protection Act sets new energy efficiency standards for appliances, lighting and buildings; authorizes billions of dollars in new funding for research into sustainable energy sources and alternative fuels; and sets a goal of eliminating greenhouse gas emissions by federal agencies by 2050. Specifically in terms of research, the bill authorizes new federal programs to develop sustainable energy sources, including solar and geothermal energy; produce alternative fuels such as biofuels and ethanol; expand carbon sequestration programs; and establish the new Advanced Research Projects Agency-Energy (ARPA-E) within the Department of Energy.
The Renewable Energy and Energy Conservation Tax Act of 2007 authorizes new tax credit bonds to encourage energy efficiency in residential property and more production of “clean” energy, and authorizes $3.6 billion in bonds for state and local governments to fund energy conservation efforts. The bill provides a total of $16.1 billion in tax incentives and credits, which would be offset primarily by reducing current tax benefits for oil and gas companies over ten years.
APPROPRIATIONS UPDATE
Commerce, Justice, Science, and Related Agencies (CJS)
The House passed its CJS spending bill for FY08 on July 30. As reported in our July 16 Washington Update, the House bill would provide $6.5 billion for the National Science Foundation (NSF), an increase of $593 million over FY07 funding.
Specifically, the NSF Research and Related Activities (R&RA) account would receive $5.14 billion, an increase of $474 million over the FY07 level. The increase is allocated to the Experimental Program to Stimulate Competitive Research (EPSCoR) program, which, as the Administration requested, would be moved from the education directorate to R&RA. Under the House bill, the Education and Human Resources account would receive $822 million, which is more than $122 million above the FY07 level. These increases would be dedicated to K-12 math and science programs.
For NASA, the House CJS bill would provide $290 million more than the Administration's FY08 request “to restore cuts made by the Administration in the science, aeronautics and education portfolios.” Specifically, NASA Science programs would receive $5.7 billion, NASA Aeronautics would receive $704 million, and NASA Education programs, which were cut or flat-funded in the Administration's request, would receive $217 million.
The CJS bill also includes $4.0 billion for the National Oceanic and Atmospheric Administration (NOAA), which is approximately $56.9 million above the FY07 level. And it includes $831.2 million for the National Institute of Standards and Technology (NIST), which is critical to the national innovation agenda.
Defense (DoD)
The House-passed FY08 Defense Appropriations bill provides a total of $459.6 billion in discretionary spending at the Department of Defense, which is $39.7 billion over the FY07 amount and $3.5 billion under the Administration's FY08 request. Research funding provided by the House bill includes $76.23 billion for DoD Research, Development, Test and Evaluation (RDT&E) programs, which is $274.6 million above the FY07 level and $1.12 billion over the Administration's FY08 request. Specific funding amounts in the House-passed bill for Basic and Applied research accounts are as follows:
Science and Technology (S&T) Programs: $12.19 billion
6.1 Basic Research: $1.55 billion
6.2 Applied Research: $5.08 billion
Army 6.1 Basic Research: $354 million
University Research Initiatives: $76.7 million
University & Industry Research Centers: $96.8 million
Defense Research Sciences: $161.2 million
Army 6.2 Applied Research: $1.11 billion
Navy 6.1 Basic Research: $489.7 million
University Research Initiatives: $93.1 million
Defense Research Sciences: $380.1 million
Navy 6.2 Applied Research: $751.6 million
Air Force 6.1 Basic Research: $382.7 million
University Research Initiatives: $104.3 million
High Energy Laser Research: $12.6 million
Defense Research Sciences: $265.8 million
Air Force 6.2 Applied Research: $1.12 billion
Defense-wide 6.1 Basic Research: $326.9 million
Government/Industry Cosponsorship of University Research (GICUR) : $5 million
National Defense Education Program/SMART Program: $44.4 million
Defense-wide 6.2 Applied Research: $2.09 billion
Defense Advanced Research Projects Agency (DARPA): $3.03 billion
Indirect Cost Cap
One issue of concern to the research community is a provision included in the House bill that would cap indirect cost reimbursements on basic research (6.1) grants at 20 percent. Under this provision, DoD could include no more than 20 percent of the direct cost of a grant, contract, or other agreement to the total award to cover indirect costs (administrative and facilities-related costs such as equipment, operation and maintenance, hazardous waste management, etc).
UCLA Federal Relations and Vice Chancellor for Research Roberto Peccei are working closely with UCOP and several research universities nationwide to ensure that this provision is not included in the final version of the bill.
Energy and Water (E&W)
The House passed its Energy and Water Appropriations bill on July 17. The bill would provide the Department of Energy (DOE) Office of Science with $4.51 billion, which is $716 million more than FY07. Specific funding in the House bill includes $150 million for climate change research programs, $208 million for basic energy storage and generation research, $235 million for vehicle technologies, $200 million for solar energy research, $250 million for biofuel programs, and a total of $1.9 billion for energy efficiency and renewable energy programs.
Labor, Health and Human Services, Education and Related Agencies (Labor-HHS)
On July 19, the House passed the FY08 Labor-HHS-Education appropriations bill. The bill funds all Department of Education programs and includes increases to federal financial aid programs that UCLA and the higher education community support.
The bill would raise the Pell Grant maximum award to $4,700. The current level is $4,310 and the Administration requested $4,600. Funding for TRIO would increase to $868 million, or $40 million above both the FY08 request and FY07 funding, while funding for GEAR UP would rise to $323 million, or $20 million above both the FY08 request and FY07 funding.
Other programs would be held at their FY07 levels, including the Supplemental Educational Opportunity Grant (SEOG), Federal Work Study, and Leveraging Educational Assistance Partnerships (LEAP) programs, as well as Perkins Loan cancellations.
The full Senate is expected to consider the bill in September. The Senate bill would retain the Pell Grant maximum award at $ 4,310. All other student aid programs would be funded at their FY07 levels, except for TRIO and GEAR UP, which would receive increases of $30 million and $10 million, respectively. Both bills would level fund graduate and international education programs.
The level of funding for the NIH in both bills is of great concern to the higher education community. With most of the increase to the agency's budget allocated to the Global AIDS Fund, the real increase for research is less than two percent. More than 60% of UCLA's federal research funding comes from competitive, peer-reviewed NIH grants.
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