CONTENTS
BUDGET, APPROPRIATIONS, TAX ISSUES
- Congress Wraps up Major End-of-Year Legislation
- AAU Issues Statement on Omnibus and Tax Bills
- FY16 Omnibus Deal Boosts Research Funding and Pell Grant Maximum Award
- Tax Deal Would Extend AOTC and R&D Tax Credit Permanently
OTHER CONGRESSIONAL ISSUES
- Congress Passes Perkins Loan Program Extension
EXECUTIVE BRANCH
- AAU Joins Letter Opposing Proposed IRS Gift Rule
OTHER
- AAU Board Reaffirms Statement on Importance of Student Diversity
BUDGET, APPROPRIATIONS, TAX ISSUES
CONGRESS WRAPS UP MAJOR END-OF-YEAR LEGISLATION
Congress today approved the FY16 omnibus appropriations bill and a bill to extend expired or expiring tax provisions, sending the combined package (H.R. 2029) to the President for signature.
The House approved the tax measure on Thursday by a vote of 318 to 109, and the omnibus spending bill this morning by a vote of 316 to 113. Late yesterday the House leadership expressed concern that the omnibus would fail to pass, but a last-minute lobbying effort apparently helped push the measure over the finish line.
The Senate this morning approved the two measures as a combined package by a vote of 65 to 33. The White House has indicated that the President supports both measures.
Congress also has cleared another short-term continuing resolution to fund the government from December 17 through December 22, in case lawmakers needed more time to vote on the spending and tax deal and to give the President time to sign it.
--AAU Issues Statement on Omnibus and Tax Bills
AAU on December 16 issued a statement of support for the FY16 omnibus appropriations bill and the tax extender package, noting that both bills “are good news for higher education and for research universities in particular.”
The statement points out that the omnibus includes “significant investments in scientific research at all the major research agencies, with the highlight being a $2 billion increase for the National Institutes of Health that helps make up for years of neglect. The bill shores up student aid programs and includes a $140 increase to the maximum Pell Grant award.”
The AAU statement adds that the tax bill includes provisions that will “help research universities and other higher education institutions carry out their missions,” and that the permanent extension of the American Opportunity Tax Credit will help “millions of undergraduates pay for college.”
FY16 OMNIBUS DEAL BOOSTS RESEARCH FUNDING AND PELL GRANT MAXIMUM AWARD
The FY16 omnibus appropriations package provides significant funding increases for several research agencies, including a $2-billion increase for the National Institutes of Health. For higher education, the measure would allow the Pell Grant maximum award to rise by $140 to $5,915 and increase funding for the TRIO and GEAR-UP student aid programs. Most other higher education programs would be flat-funded.
The omnibus would delay for two years implementation of the so-called Cadillac tax on high-benefit, employer-provided health plans.
The deal follows the topline spending levels agreed to in last month’s budget agreement (P.L. 114-74), reports CQ.com, with about a five-percent increase in discretionary spending. This includes about $548 billion for defense, $518.5 billion for nondefense programs, and about $74 billion for the war-related Overseas Contingency Operations fund.
Here are some details on research and higher education funding, several of which have been provided by CFR Task Force agency leads. See also AAU’s FY16 Funding Priorities Chart.
NATIONAL INSTITUTES OF HEALTH. NIH would receive $32 billion, a $2 billion, or 6.6-percent, increase over FY15, with specific increases for Alzheimer’s, brain, and antibiotic research, as well as the Precision Medicine Initiative.
A general, mostly proportional, increase is provided to all NIH Institutes and Centers; the Institutional Development Award program is funded at $320 million.
A provision in the bill bans federal funding of human gene editing (which NIH does not currently fund).
A privacy provision for human subjects of research states: “NIH shall require investigators receiving NIH funding for new and competing research projects designed to generate and analyze large volumes of data derived from human research participants to obtain a certificate of confidentiality.”
The omnibus also retains the current Executive Level II salary cap for researchers on grants from the Department of Health and Human Services, rather than the lower House-proposed level.
NATIONAL SCIENCE FOUNDATION. NSF would receive $7.46 billion, an increase of $119 million, or 1.6 percent, over FY15, with the following break-out:
· Research and Related Activities: $6.03 billion, an increase of $99 million, or 1.7 percent
· Education and Human Resources: $880 million, an increase of $14 million, or 1.6 percent
· Major Research Equipment and Facilities Construction: $200.3 million, no change from FY15
See the AAU FY16 NSF Funding Chart for additional funding details.
The accompanying conference report overrides a House provision that would have stipulated NSF funding by directorate and would have decimated funding for the Social, Behavioral and Economic (SBE) Sciences and Geosciences directorates. Instead, the language imposes a cap on SBE funding at the FY15 level.
NASA. The deal funds the space agency at $19.3 billion, an increase of $1.3 billion, or seven percent, above the FY15 level. The total includes $5.6 billion for the Science Mission Directorate (SMD), an increase of $345 million, or 6.6 percent, over FY15. Space Technology receives a $90 million, or 15-percent, increase to $596 million. Exploration would be funded at $4 billion.
Within SMD, Earth Science would receive $1.9 billion, an increase of 8.4 percent; Planetary Science would receive $1.6 billion, an increase of 13 percent; and Astrophysics would receive $730.6 million, an increase of seven percent. Heliophysics would receive $650 million, a drop of 1.8 percent. The AAU FY16 NASA Funding Chart contains additional details.
DEPARTMENT OF ENERGY OFFICE OF SCIENCE. The Office of Science is funded at $5.35 billion, an increase of 5.5 percent over FY15. Most research programs receive funding increases, except for Nuclear Physics, which is cut by more than 14 percent, and Fusion Energy Sciences, which is cut by nearly 32 percent. More details are in the AAU FY16 Energy Research Funding Chart.
DEPARTMENT OF DEFENSE SCIENCE AND TECHNOLOGY. Defense S&T programs would increase by nearly $1 billion, about 7.5 percent, to $13.2 billion. The 6.1 basic research accounts would be funded at $2.3 billion overall, an increase of $32 million, or 1.4 percent. However, the Air Force 6.1 account would be cut by nearly four percent. The medical research account would rise by 6.5 percent to $1.1 billion. DARPA would see a budget cut of $25 million, for total funding of $2.89 billion. See the AAU FY16 Defense Research Funding Chart.
AGRICULTURE AND FOOD RESEARCH INITIATIVE. AFRI would be funded at $350 million, an increase of $25 million, or seven percent, over the FY15 level. In addition to adding money to this competitive grant program, the bill removes a requirement that non-land grant universities match AFRI grants with other funds.
NATIONAL ENDOWMENT FOR THE HUMANITIES. NEH would be funded at $147.9 million, an increase of $1.9 million above the FY15 level – the Endowment’s first funding increase in six years.
For HIGHER EDUCATION PROGRAMS, details are as follows.
· The Pell Grant Program would receive $22.5 billion in discretionary funding, the same as in FY15 and $370 million more than the House bill. When combined with mandatory funding, these discretionary funds would enable the maximum grant to rise to an estimated $5,915, an increase of $140 in the 2016-2017 school year.
· Improving Teacher Quality State Grants would receive $2.3 billion, the same as FY15 and $668 million more than the House bill
· Math and Science Partnerships would be funded at $153 million, the same as FY15
· The Institute of Education Sciences would receive $618 million, $44 million more than FY15
· The Office for Civil Rights would receive $107 million, an increase of $7 million
· Title VI International Education programs would be flat funded at $72.2 million
See also the AAU FY16 Department of Education Funding Chart.
POLICY RIDERS. The agreement leaves out several of the most contentious policy riders – those that would have defunded Planned Parenthood, blocked a clean-water rule, loosened financial regulations, relaxed restrictions on campaign financing, and frozen the flow of immigrants from Syria and Iraq. The package also does not include a Democratic amendment to restore federal research funding on gun violence, nor does it include any policy riders on higher education.
The package includes a provision to block federal funding for gene editing (which NIH does not currently fund), and would modify the Visa Waiver program, which allows many foreign citizens to visit the U.S. for three months without a visa.
TAX DEAL WOULD EXTEND AOTC AND R&D TAX CREDIT PERMANENTLY
The tax extension measure would make permanent the American Opportunity Tax Credit (AOTC), the IRA Charitable Rollover, and the Research & Development (R&D) tax credit, as well as extend through 2016 the above-the-line deduction for qualified tuition and related expenses.
The measure also improves Section 529 college savings accounts, in part by expanding the definition of qualified expenses to include computer equipment and technology.
OTHER CONGRESSIONAL ISSUES
SENATE PASSES PERKINS LOAN PROGRAM EXTENSION
The House on December 17 approved by unanimous consent a two-year extension of the Perkins Loan Program, sending the bill to the President for signature. The measure, which replaced a one-year extension approved by the House in September, had been approved by the Senate on December 16. The program authorization expired on September 30.
Before the Senate vote, a group of eight higher education associations, including AAU, sent a letter to the chair and ranking member of the Senate Health, Education, Labor, and Pensions Committee regarding extension of the program.
The letter thanked Senators Lamar Alexander (R-TN) and Patty Murray (D-WA) for their willingness to extend Perkins for two years to enable it to be considered as part of the reauthorization of the Higher Education Act (HEA), but noted the associations’ preference for the original House bill.
The associations expressed concern about the structure of the Senate bill, including its one-year-only extension of graduate student participation and its bar on participation by new graduate students. The measure also requires undergraduates to exhaust their federal loans—subsidized and unsubsidized—before taking out a Perkins loan.
EXECUTIVE BRANCH
AAU JOINS LETTER OPPOSING PROPOSED IRS GIFT RULE
AAU joined the National Council of Nonprofits and Independent Sector’s comments opposing the IRS’s proposed gift substantiation regulation submitted on December 15. The proposed regulation would permit, but not require, charitable nonprofit organizations to file a new informational return with the IRS (in addition to the Form 990) to substantiate contributions of more than $250 in value.
The new reporting procedure would likely be used only if a donor had mishandled the recordkeeping/substantiation of a donation and asked the charitable organization to file an amended 990 form. The new form could be filed instead of the amended 990.
Of concern to the nonprofit community is that the new informational tax return would require a nonprofit organization to collect the donor’s name, address, and Social Security number or other taxpayer identification number. The proposed parallel reporting regime, even though voluntary, would open the door to fraud and identity theft and reduce charitable giving, the organizations stated.
OTHER
AAU BOARD REAFFIRMS STATEMENT ON IMPORTANCE OF STUDENT DIVERSITY
The AAU Board of Directors today issued a statement reaffirming the importance of student diversity at research universities. The statement, issued on behalf of AAU’s member universities, also points to research showing successful outcomes for underrepresented minority students who benefit from admissions policies designed to create diverse student bodies.
The statement references a similar statement the association issued in 1997, and adds:
We are committed to diversity. It is fundamental to the very concept of education. The question is not whether or not a diverse student body is important – the consensus among higher education, military, and business leaders has long been that it is – but rather how universities can enable all of their students to flourish in their studies, in their careers, and as thoughtful citizens and visionary leaders.