Policy Update: July 25, 2012

Congress is currently in the middle of its longest remaining stretch of session prior to the August recess and the November election. At this point, all twelve FY13 bills have been drafted in the House, and all but the Defense and Interior bills have been drafted in the Senate. Below is an update on the appropriations bills that have recently moved.

FY 2013 Labor-HHS-Education Appropriations Bill

Last week, the House Labor-HHS-Education Appropriations Subcommittee released its draft FY 2013 appropriations bill. While the bill has some similar elements to the Senate bill, which was released in mid-June, the bill highlights the Chambers' different priorities for the upcoming year. The bill is not expected to advance to the full Committee or to the House floor for a vote, but will likely be negotiated between the branches after the election as part of year-end consolidated appropriations bill.

NIH

The House bill keeps the NIH budget flat-lined at $30.6 billion, which is $100 million, or 0.3 percent, below the Senate proposal.

The House bill would provide at least $487.8 million for the Clinical and Translational Science Awards (CTSAs), and the language states that no changes should be made to the CTSA program until the Institute of Medicine completes its report, which is due June 2013. This is a key difference from the Senate draft bill, which would increase the number of new research grants awarded and focus resources on new investigators.

The House bill would provide $10 million for the Cures Acceleration Network (CAN), while the Senate bill recommended $40 million. Overall, the new National Center for Advancing TranslationalSciences (NCATS) would be level funded at $575 million. The Senate would provide $639 million to NCATS.

The House bill would eliminate several programs from the Patient Protection and Affordable Care Act (ACA), such asfunding for the new Center for Consumer Information and Insurance Oversight at the Centers for Medicare and Medicaid Services (CMS) and the Prevention and Public Health Fund. It would also eliminate funding for the Agency for Healthcare Research and Quality (AHRQ).

The draft bill would provide $5.9 billion for the Health Resources and Services Administration (HRSA), which is $453 below the FY 2012 enacted level, but increases funding for the Centers for Disease Control and Prevention (CDC) to $5.75 billion, which is $66 million above the FY 2012 level.

PELL GRANTS AND FEDERAL FINANCIAL AID PROGRAMS

Despite controversy surrounding the program, both the House and Senate bills increase the maximum Pell Grant award by $85 to $5,635. Partially, this results from a temporary surplus in the Pell Program due to eligibility changes that went into effect last year.

The other student financial aid programs, including Perkins, Work-Study, and SEOG would be level-funded at FY12 levels.

The House draft bill would prohibit spending federal funds on implementation of the regulations published by the Department of Education relating to gainful employment, state authorization, or definition of a credit hour.

FY 2013 Defense Appropriations Bill

On July 19th, the House passed its Defense Appropriations bill, which provides $518.1 billion in funding for the Department of Defense. This is more than $2 billion above the Administration’s request, and $7 billion more than the Senate has allocated for their version of the bill.

Funding for research, including basic research (6.1) and applied research (6.2) faired well. The bill allocates $2.1billion for basic research, $4.5 million or 0.2 percent above the enacted 2012 level. The bill also provides $4.6 billion for applied research, which is a cut of $176 million or 3.7 percent.

It is doubtful, however, that a Defense bill will be considered by the Senate. Majority Leader Harry Reid has said the Senate will not move any spending legislation before the new fiscal year; instead, Congress will likely use a continuing resolution to fund the government.

Outlook for Federal Funding

Under the Budget Control Act enacted last summer, a $1.2 trillion sequester (or set of automatic spending cuts) or "Fiscal Cliff" will be triggered on January 1, 2013. This would affect the proposed FY13 budget in mid-year. Congress has been asking agencies for information about how the sequester will specifically be implemented in order to devise legislative efforts to undo it. The sequester would cut $600 billion over 10 years from security accounts (DOD, DHS, STATE) and an additional $600 billion from non-security discretionary spending (NIH, Commerce, Education, Energy, etc).

It is likely that the post-November "lame duck" session of Congress will confront these issues, as well as other proposals to wring savings, such as whether to permanently extend the Bush tax cuts (set to expire on December 31, 2012). It is also possible that these items will be temporarily deferred until the new Congress can act on them next Spring.

State Update

The State Senate last week approved Economic Development legislation known as the "Speaker's Jobs Bill" - which had passed the House at the end May – and the bill continues to include provisions we support.

Specifically, the legislation includes $50 million for a scientific and technology research matching grant program that would support capital projects at private universities and other institutions, requiring every $1 of public funding to be matched by $3 in private financing. In addition, the legislation includes $2 million to create a "talent pipeline" program organized through the Massachusetts Technology Collaborative (MTC), to support paid internships in start-up companies and an entrepreneur and startup venture capital mentoring program. We will be working with the MTC to ensure the program can benefit ourco-op students.

A conference committee is currently working on resolving the differences between the two chambers' versions of the bill. They must produce a conference report by next Tuesday, July 31st, thefinal day of formal sessions of the Legislature.