Federal Relations

By Scott Fleming, Interim Vice President for Federal Relations, AJCU

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Congress and the Administration have not reached an agreement on how to adjust budget caps which, under the Budget Control Act of 2011, would require massive discretionary spending cuts impacting defense and non-defense accounts in FY20. Likewise, no real movement has occurred on raising the debt ceiling before the Administration runs out of options to avoid borrowing more money (likely in late summer or early fall).

Rumors have been flying around Washington about what lies ahead. One week we hear that the President would rather have the government operate under a series of continuing resolutions (CRs) – thereby maintaining current funding levels – until after the November 2020 election. The next week, we hear concern among Congressional Republicans about the potential consequences of operating under CRs, and that the Administration is open to reaching a bipartisan deal. This week saw an initial meeting on this topic with bipartisan House and Senate leaders, Acting White House Chief of Staff Mick Mulvaney, Acting Office of Management and Budget Director Russell Vought, and Treasury Secretary Steve Mnuchin.

There has been some encouraging news out of the House of Representatives this month. On May 8, the House Appropriations Committee approved its version of the FY20 Labor, Health and Human Services, Education Appropriations bill. Over the past few decades, this bill has typically been the last to be considered by Committee. Having it scheduled first makes a statement about its priority to the Committee, which has dubbed it, “The People’s Bill.” Since an overall budget framework has not been reached, the mark-up took place under a “deeming resolution,” which set allocations for each Subcommittee’s bill and included an increase of $11.8 billion over current funding levels for “The People’s Bill.” The deeming resolution was approved on a party line vote, which makes clear that compromises will be necessary down the road.

Highlights of the bill for student financial aid and higher education programs include:

  • A $150 increase for the maximum Pell Grant to $6,345;

  • $1 billion in funding for Supplemental Education Opportunity Grants (an increase of $188 million over FY19);

  • $1.4 billion for Federal Work Study (a $304 million increase);

  • $1.1 billion for the TRIO programs (a $100 million increase);

  • $350 million for a Temporary Public Service Loan Forgiveness program (designed to help students who have been told they are no longer on track for loan forgiveness after having pursued careers that should have qualified them to participate);

  • $53 million for Teacher Quality Partnerships;

  • $10 million to restart the Centers of Excellence for Veteran Student Success program; and

  • $80.4 million for Title VI and Fulbright-Hays international education programs (an increase of $15.3 million).

In its report accompanying the bill, the Appropriations Committee listed specific requirements for the U.S. Department of Education to provide guidance and updates on the following:

  • Perkins loan cancellation repayment by January 1, 2020;

  • The Department’s “Second Chance Pell” experiment; and

  • Recommendations for improving Federal support for campus programming by providing support services for first-generation students.

With regard to medical research and training, the bill also includes:

  • A $2.2 billion increase in funding for the National Institutes of Health (bringing the funding to $41 billion); and

  • $855 million for health professions training programs from the U.S. Department of Health and Human Services, with a specific reference to colleges and universities as logical places for that kind of training.

For more detail on the Committee’s work, please click here.

It is likely that the appropriations bill will reach the House floor in June. In the Senate, no action has been taken on appropriations measures. Senate Committee Chairman Richard Shelby (R-AL) has indicated that it is his strong preference to have a budget agreement before moving forward, but there is some talk now of the Senate passing its own deeming resolution and beginning action on its own appropriations process. In any event, it is safe to predict that the House bill is the high-water mark for funding levels.

Just last week, the Administration sent Congress a proposed “budget amendment” designed to provide increased funds for NASA by rescinding $1.9 billion in funds from the Pell reserve account. The proposal received objections from House Subcommittee Chairwoman Rosa DeLauro (D-CT) and members of the higher education community, including the Committee for Education Funding (see CEF’s letter here).

There has been action on other issues of importance to AJCU as well: reauthorization of the Higher Education Act (HEA); tax treatment of scholarship funds in excess of tuition and fees; and immigration:

  • HEA Reauthorization: Serious discussions continue between Senate HELP (Health, Education, Labor and Pensions) Committee Chairman Lamar Alexander (R-TN) and Ranking Member Patty Murray (D-WA), and their staffs, on developing a bipartisan bill to serve as the basis for Committee action. There are still a good number of issues to be resolved between the two sides, but reports indicate that they are making progress. Likewise, the House Education and Labor Committee is holding a series of hearings and Chairman Bobby Scott (D-VA) continues to work with his staff to revise the AIM HIGHER Reauthorization bill, which was introduced by Committee Democrats last Congress and would likely be the starting point for action in the House.

  • Taxes: The House of Representatives is expected this week to approve legislation to correct an unintended change in the tax treatment of students’ scholarships in excess of tuition and fees, which came about through the Tax Cuts and Jobs Act of 2017 (TCJA). AJCU signed onto a letter from higher education associations urging passage of this legislation; AJCU’s president, Rev. Michael J. Sheeran, S.J., also sent a letter, urging the House leadership to move the legislation forward. While scholarships beyond tuition and fees have long been subject to taxation, the tax rate has been typically low for families of students who receive need-based aid. The TCJA changed the rate to that of income from trusts and estates, which is significantly higher. The House bill would repeal this change and return the tax rate to its previous level.

  • Immigration: On March 26, Senators Richard Durbin (D-IL) and Lindsey Graham (R-SC) reintroduced their bipartisan DREAM Act. They will be adding cosponsors as pairs of Republicans and Democrats in order to maintain bipartisan sponsorship. In the House of Representatives, components of H. R. 6, the Dream and Promise Act of 2019, were approved at an extended mark-up in the House Judiciary Committee on Wednesday, May 22. The Dream Act (H.R. 2820), as reported by the Committee, would provide eligibility for individuals who have been in the U. S. continuously for four years prior to enactment of the legislation; who entered the United States before they turned 18; and who have completed or are enrolled in educational programs or military service. The bill does, of course, include a variety of factors – largely relating to criminal history – that would be disqualifying. The bill also authorizes grant funds to be available to non-profit organizations to assist individuals with the application process.

There will be a lot of action on these issues over this summer. While this is the last Federal Relations report for Connections until September, we will continue to share updates on the Federal Relations page of the AJCU website: ajcunet.edu/policy-corner.