Policy Update: February 14, 2012

Yesterday, February 13th, President Obama unveiled his proposed Fiscal Year 2013 budgetOverall, in light of the challenging fiscal climate, the President's proposal is positive for Northeastern and the higher education sector generally, although it is very unlikely to be enacted into law as proposed. Below is a summary of the highlights.

Scientific Research

The budget largely preserves preserve key investments in scientific research and development. Below is information about funding for federal research agencies on which Northeastern relies:

NATIONAL INSTITUTES OF HEALTH (NIH):

  • The Budget provides level funding for the NIH at $31 billion. However, the Budget implements new grant management policies to increase the number of new research grants awarded and continue to focus on resources for new investigators. Also, the budget would provide $453 million for the new National Center for Advancing Translational Sciences (NCATS), designed to accelerate research on the discovery and development of new therapeutic interventions.

DEPARTMENT OF HOMELAND SECURITY (DHS):

  • The Budget provides $39.5 billion, a decrease of 0.5 percent or $191 million, below the 2012 enacted level. However, despite the overall cut, the Budget provides $831 million for the Science and Technology Directorate (S&T), an increase of over $21 million. Funding for research within S&T would increase by $212 million. The University Programs Account, which funds the ALERT Center, would see a $3.4 million increase to $40 million. This is a positive outcome following letter, signed by President Aoun and eleven other university leaders, to Secretary Napolitano regarding the DHS S&T budget.

DEPARTMENT OF DEFENSE (DOD):

  • For the first time since the 1990s, the core Pentagon Budget would be cut, to $514.2 billion, a decrease of 1 percent or $5.1 billion below the 2012 enacted level. The proposed DOD budget maintains Basic Research at $2.1 billion – an investment that largely supports university based research. While Basic Research funding remains level, funding for Applied Research is decreased slightly, from $4.7 billion to $4.5 billion.

NATIONAL SCIENCE FOUNDATION (NSF):

  • The Budget provides $7.4 billion for the NSF, $340 million or 5 percent above the 2012 enacted level. Almost $6 billion of this is designated for research and related activities, and the Budget focuses on cross-cutting research priorities in advance manufacturing, clean energy, wireless communications, and STEM education. Included in the Budget is $110 million for a basic research initiative at the NSF aimed at protecting the Nation’s critical information technology infrastructure, including the Internet, from a wide range of threats and challenges.

DEPARTMENT OF ENERGY (DOE):

  • The Budget provides the DOE $27.2 billion in discretionary funds, a 3.2 percent increase above the 2012 enacted level. The Office of Science saw a slight increase, with $5 billion in funding,a $100 million increase. The budget maintains and expands funding for the Advanced Research Projects Agency-Energy (ARPA-E).

Education Funding

The budget request reinforces the college affordability plan President Obama laid out in his State of the Union Address.

DEPARTMENT OF EDUCATION (ED):

  • The Budget provides $69.8 billion in discretionary spending, which is 2.5 percent, or $1.7 billion, above the 2012 enacted level. The request includes several of the college affordability items President Obama laid out in his State of the Union Address. Several of these items, particularly increased funding for student financial aid programs, would benefit Northeastern students and their families. Some highlights include:
    • Making the $10,000 American Opportunity Tax Credit permanent
    • Suspending an increase in Federal Stafford Loan interest rates
    • Providing funding to increase the maximum Pell Grant to $5,635 from $5,550
    • Increasing funding from $2.7 billion to $10 billion annually for Perkins and SEOG, and doubling Federal Work-Study
    • Investing in new resources to reform higher education through Race to the Top: College Affordability and Completion, and a new First in the World competition
    • Investing $260 million for STEM programs – some of the funding will support the President’s ambitious goal of preparing 100,000 STEM teachers in the next decade
  • The Budget included language that calls on academic institutions “to do their part in reining costs” while delivering quality education.

Outlook

Congress will now develop its own budget. Few lawmakers or outside experts expect any final appropriations bills to be passed before the November election. Under the Budget Control Act enacted last summer, a $1.2 trillion sequester (or set of automatic spending cuts) will be triggered on January 1, 2013. This would affect the proposed FY13 budget in mid-year. Legislative efforts are underway to try to undo the sequester, which 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).