2011 Higher Education Government Relations Conference Brian Flahaven, CASE Jim Hermes, AACC Bob...
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Transcript of 2011 Higher Education Government Relations Conference Brian Flahaven, CASE Jim Hermes, AACC Bob...
2011 Higher Education Government Relations Conference
•Brian Flahaven, CASE•Jim Hermes, AACC•Bob Moran, AASCU•Jennifer Poulakidas, APLU
Washington Update: Briefing on Federal Legislation and
Policy Issues
FY 2012 Appropriations
Status of federal funding for Fiscal Year 2012
Began 1 October
No FY12 bills passed at that point
Operated under Continuing Resolution(CR) until 18 November
FY 2012 Appropriations
Some Success!
“Mini-bus” of 3 bills: Ag, C-J-S, T-HUD
And some further procrastination…
Extended CR until 16 December
FY 2012 Appropriations
What we know USDA AFRI: $264.5m (flat) NSF: $7.03b (+2.5%) NASA:
• Science directorate $5.09b (+2.9%) • Aeronautics research $570m (+6.5%)• Education programs $138m (-4.8%)
NOAA: $4.89b (+6.4%) NIST:
• Manufacturing Extension Program $128.4m (flat)• Technology Innovation Program $0 (-100%)
HUD Sustainable Communities: $0 (-100%)
FY 2012 Appropriations
Still Pending
Labor-HHS-Ed (Pell, other student aid, NIH)
Energy & Water (energy research)
Defense (defense research)
Interior-Environment (NEH, USGS, EPA)
State-Foreign Operations (USAID higher ed programs)
FY 2012 Appropriations
Labor-HHS-EdStudent Financial Aid: Pell max maintained at $5550 SENATE eliminates in-school interest subsidy for undergrad
loans during 6-mo grace period HOUSE Pell changes: 18 to 12 semesters eligibility; zero
family contrib income up to $30k from $15k; eliminate eligibility for less than half-time; IPA allowance
HOUSE bill also cuts and eliminates other higher ed programs
New accounting spin re Pell, $1.3b shortfall
NIH SENATE $30.5b HOUSE $31.7b
FY 2012 Appropriations
Outlook… anybody’s guess!
Within 2 weeks with big package of remaining spending bills
Before end of year in super package of remaining spending bills, expiring tax provisions, sequestration limits
CR until Feb/March 2012
Year-long CR
Budget Control Act
Negotiated measure to address the nation’s debt ceiling issue.
Raised the ceiling $2.1 trillion in a two-step process under certain conditions. $900 billion immediately $1.2 trillion subject to Congressional action/inaction
Vote on a Balanced Budget AmendmentCreation of Joint Committee on Deficit
Reduction
Budget Control Act
First Step - $900 billionAgreement established $900 billion in
discretionary savings by setting security and non-security spending caps for the next 10 yrs.
Gave the President ability to immediately raise the debt ceiling by $400 billion.
President can request an additional increase of $500 billion, subject to a vote of disapproval.
Budget Control Act
Budget Control Act
Second Step - $1.2 trillion - $1.5trillionPresident may request an additional $1.2
trillion – subject to disapproval.President may request an additional $1.5
trillion if both the House and the Senate pass a Balanced Budget Amendment to the Constitution for ratification by the states.
President may request amount between $1.2 and $1.5 trillion subject to Joint Committee.
Budget Control Act
Joint Select Committee on Deficit Reduction(Super Committee)
Democrats Republicans
House
Chris Van Holland (MD)James Clyburn (SC)Xavier Becerra (CA)
Jeb Hensarling (TX)Dave Camp (MI)Fred Upton (MI)
Senate
Patty Murray (WA) Max Baucus (MT)John Kerry (MA)
Jon Kyl (AZ)Rob Portman (OH)Pat Toomey (PA)
Budget Control Act
Joint Select Committee on Deficit Reduction(Super Committee)
“GOAL—The goal of the joint committee shall be to reduce the deficit by at least 1,500,000,000,000 over the period of fiscal years 2012 to 2021.”
Timeline
Sept. 8: First organizational meeting held and rules for operation of committee established.
Oct. 14: House and Senate committees must submit recommendations to the committee by this date.
Nov. 23: Deadline for the committee to vote on a plan with $1.5 trillion in deficit reduction.
Dec. 2: Deadline for the committee to submit bill to the president and Congress.
Dec. 23: Deadline for both houses to vote on the committee bill.
Timeline
March 2012 – Approximate time when the first $900 billion in the debt ceiling increase runs out.
Year End 2012 – Approximate time when the additional $1.2 billion in the debt ceiling runs out.
January 2013 – Sequestration begins – if necessary.
BCA Sequestration
Sequestration requires OMB to cut $984 billion ($1.2 trillion minus $216 in interest savings) for fiscal years 2013 - 2021. $109 billion per year – split evenly between defense
and non-defense.
Discretionary funding will experience an across the board cut for fiscal year 2013. For fiscal years 2014 – 2021, caps will be lowered and it is at the discretion of appropriators where to cut.
BCA Sequestration
Mandatory funding is subject to across-the-board cuts through 2021. Complex formula to determine exact amounts,
dependent on previous year’s outlays.Many programs exempt from sequestration,
including Pell Grants (discretionary portion 2013 only). Because of exemptions, roughly 75% of cuts would
come from discretionary programs.
Cuts of approximately 15% to discretionary spending from the current baseline.
BCA: Looking Ahead
BCA Sequestration Not Until January 2013, Leaving Congress One Year to “Fix” Things Obama vow to veto legislation reducing cuts. Attempts to avoid defense cuts – could produce
additional pressure on discretionary programs. Further attempts at “Grand Bargain”? Election year politics.
Other, intertwined issues Payroll tax cut. Unemployment insurance extension. Bush tax cuts.
Govt. Relations at CASE
Higher Educatio
n
Charitable
Sector
Tax Issues - CASE
Issues
Charitable DeductionEstate TaxIRA Charitable RolloverState Charitable Solicitation Laws
Higher Ed Tax Incentives
Charitable Deduction Cap
Current Lawo Taxpayers making over $200,000 (married couples $250,000)
- itemized deductions at 33 percent or 35 percent rate
Pres. Obama’s FY12 budget plano Taxpayers making over $200,000 (married couples $250,000)
- itemized deductions capped at 28 percent rate
• Deficit Commissiono Elimination of charitable deduction, replace with 12 percent
nonrefundable credit
CASE opposes charitable deduction cap
Charitable Deduction Cap
American Jobs Act- Raises $400B of $467B needed- “Fairness”
Super Committee- Sen. Toomey proposal- Dem. proposal
Charitable Deduction Cap
Tax Reformo Democrats – “Fairness” Argumento GOP – Eliminate deductions, lower rates o Bush Tax Cuts
Outlook o Very vulnerableo What makes charitable deduction different?o Nonprofit coalition
Estate Tax
Extended through 2012- $5M exemption- 35 percent tax rate
President Obama: extend 2009 levels ($3.5M exemption; 45 percent tax rate)
Bequest giving & education
What will happen in 2012?
IRA Charitable Rollover
Originally enacted in 2006o Taxpayers Age 70 ½ or oldero $100,000 annual limito Two years (2006, 2007)
Don’t have to count towards income
Tax Deal of 2010: Two-year retroactive extension of IRA charitable rollover through Dec. 31, 2011.o Extra month – January 2011
• Outlook: Tax Extenders
State Charitable Solicitation Laws
• To protect public from fraud & abuse
• Exemptions from state laws• Institutions vs. IRFs• Form 990• Progress
o Oklahoma in 2010o Hawaii in 2011
Other Washington Activity
Department of Education announce intention to conduct negotiated rulemaking
Teacher education programs and TEACH Grants
Student loan program integrity