Federal Budget Archives
April 3, 2012. On Thursday, the House of Representatives approved a $3.5 trillion budget plan proposed by Representative Paul Ryan of Wisconsin on a vote, largely along party lines. The House vote breakdown was 228 Republicans in favor, and 181 Democrats and 10 Republicans opposed.
The Ryan plan faces all but certain rejection in the Senate but will frame the parties’ election-year debate on fiscal issues. It stakes out a clear Republican position by proposing to cut spending, reduce taxes, and overhaul Medicare and Medicaid. The plan cuts $5.3 trillion over the next decade — entirely through deep cuts in entitlements and agency spending.
Democrats are criticizing Republicans over the Ryan plan and agree that the GOP budget would cripple vital programs and dismantle Medicare while not raising taxes on the wealthy, even though several bipartisan panels have recommended a mix of spending cuts and tax increases to cut the deficit. Republicans acknowledge the proposal is in many ways a campaign document rather than a bill that might become law this year.
Much of Thursday's debate focused on Ryan's proposal to change Medicare into a program that would subsidize seniors' insurance premiums, allowing them to buy private insurance or purchase traditional Medicare. The Republican budget would cap the growth of Medicare, and Democrats say that guarantees the program won't keep up with the annual increase in health-care costs. Republicans say their plan, which would only apply to people currently under age 55, is preferable to the Administration’s creation of an Independent Payment Advisory Board (IPAB), which is charged under the new health law with finding ways to cut Medicare costs without sacrificing quality or coverage.
The Ryan budget would turn Medicaid into a block-grant program controlled by the states. It would reduce the top individual and corporate tax rates to 25% from 35%, and would create just two individual tax brackets, 25% and 10%. It also would cut spending significantly. Among the most contentious issues is whether the federal deficit can be cut without raising taxes. Democrats say that's impossible without gutting safety-net programs and the rest of the government.
March 26, 2012. House Republicans have unveiling a federal budget proposal that aims to tame the national debt by reshaping Medicare and cutting deeply into Medicaid, food stamps and other programs — while reshuffling the tax code to sharply lower rates.
Congressional Republicans plan to use the document to demonstrate their willingness to tackle the nation’s difficult fiscal problems head-on. They argue that restraining future borrowing is imperative and entitlement programs for the elderly and the low income must be redrawn to ensure that federal benefits continue to be available. However, the document — which pairs deep spending cuts with a reduction in the top tax rate paid by the nation’s most wealthy — quickly provided a new angle for Democrats, who argued that Republicans would cut the social safety net while protecting the wealthy.
Ryan calls for turning over to the states responsibility for the major federal programs for the needy, including Medicaid and food stamps, and giving recipients a deadline to find work and decrease their dependence on government benefits — much as welfare reform did to cash benefits in the late 1990s. Federal education and job training programs would be consolidated and “modernized,” according to the plan. In addition, spending on Pell grants for college students would be reduced.
Overall, Ryan proposes to slash federal spending by $5.3 trillion over the next decade compared with President Obama’s latest budget blueprint, with the biggest savings taken from health programs, including the repeal of Obama’s initiative to expand health coverage to the uninsured and entitlements for the underprivileged.
The House will likely pass the budget plan this week, almost certainly on a pure party-line vote. But there will not be a conference with the Senate, as Senate Majority Leader Reid has said the Senate will not be considering a budget resolution of its own this year. Ryan’s plan however provides a foundation for the GOP’s election-year push for a radically smaller federal government.
Ryan’s Budget and Education Programs
In response to the effect a proposed Ryan budget would have on education programs, Education Secretary Arne Duncan defended the Obama administration's higher education proposals.
At a recent hearing of the House Appropriations Subcommittee on Labor, Health and Human Services, Education and Related Agencies, Duncan summarized the administration’s plans for higher education, including a Race to the Top-like program for college affordability and completion and a major expansion of the Perkins Loan Program. While much of the discussion was about elementary and secondary education, many of the most pointed questions from members of Congress dealt with the administration’s proposed new spending on higher education.
Much of the administration's proposed $70 billion increase in the Education Department's budget for 2013 will go to higher education, including the Perkins loan expansion, the Race to the Top for College Affordability and Completion, and the president’s proposal to spend $8 billion on community colleges over the next two years, according to Duncan. The proposal is not expected to add new money to existing programs, including the TRIO and GEAR UP programs for college readiness and federal aid that helps minority-serving colleges. Secretary Duncan defended the community college spending as necessary to help unemployed workers in the troubled economy. The new Race to the Top program, as well as a similar competition to encourage innovation, are needed to encourage colleges to keep prices down and states to spend more on higher education.
Duncan also warned of the consequences for the Education Department in Representative Paul Ryan’s proposed budget that would cut spending in 2013 beyond the levels agreed upon when Congress voted to raise the debt ceiling in August. It would also fund Pell Grants with discretionary, not mandatory, spending, meaning that Congress could vote to cut the program substantially in future years, and assumes that income-based repayment of student will be repealed, according to the Committee on Education Funding. Over all, the budget could lead to an 18.5 percent cut in education spending by the end of 2014, including cuts that Duncan called "catastrophic."
March 12, 2012. Members of the Senate Tea Party Caucus have announced a plan to balance the Federal budget in five years and cut spending by nearly $11 trillion compared to President Obama’s budget. The plan, known as “A Platform to Revitalize America,” is a list of policies that are unlikely to be passed by the Democratic-controlled Senate or be signed into law by the president. The ambitious blueprint would achieve a $111 billion surplus in fiscal year 2017 and include an overhaul Medicare, Medicaid and Social Security.
March 5, 2012. A small, bipartisan group of federal lawmakers in both the House of Representatives and Senate are drafting deficit legislation that cuts entitlements and raises new revenue. The task of writing the bills is currently underway, but the date to unveil the details of the legislation has not been announced.
The core House group of roughly 10 negotiators is derived from a larger Gang of 100 lawmakers led by Representatives Mike Simpson of Idaho and Heath Shuler of North Carolina, who urged the debt supercommittee to strike a grand bargain last year. That larger group includes Representative Steve LaTourette of Ohio, who wants Republicans to abandon their no-new-tax-revenue pledge, as well as Tea Party-backed members like Representative Cynthia Lummis of Wyoming. The key test in the coming months will be if the core group can get buy-in from many of the 100 members who loosely support “going big” on the deficit once real cuts and tax increases are identified. Simpson is not taking the lead in drafting the legislation, but is mainly involved at this stage to educate members of the need to compromise and solve the looming deficit problems sooner rather than later.
Due to the sensitive nature of the preliminary talks, some members involved do not yet want to be identified. The House members are working in tandem with Senate negotiators who are looking to turn the outline produced by the Senate’s Gang of Six into legislative language. The goal of both groups is the same: make sure the debt is not growing bigger than the size of the economy.
February 20, 2012. The U.S. Senate has voted 60-36 to extend the payroll tax holiday and unemployment benefits after Senate leaders agreed to lower the threshold for passing the legislation. The approved measure prevents taxes from rising on an estimated 160 million voters.
Fourteen Republicans voted for the legislation, including Senate Republican Leader Mitch McConnell of Kentucky. Five Democrats and Senator Bernie Sanders of Vermont, an independent who caucuses with Democrats, voted no — including Senators Ben Cardin and Barbara Mikulski of Maryland, Tom Harkin of Iowa, Joe Manchin of West Virginia, and Mark Warner of Virginia.
The legislation will now go to the White House for President Obama’s signature. Once signed, it will extend a 2 percentage-point cut in the payroll tax through the year, as well as extend federal unemployment benefits and prevent a scheduled cut to doctors' payments under Medicare from taking effect.
The procedural agreement allowed the legislation to pass with a 51-vote margin, meaning only a handful of Senate Republicans would have had to vote for it. In the end, that precaution was unnecessary because enough Republicans did vote in favor. The move by Senate Republicans to require only the 51-vote margin vote was unusual. In recent years, nearly every controversial bill has needed 60 votes to overcome a filibuster before receiving final consideration.
A senior GOP aide said Republicans had no intention of filibustering the bill. Doing so could have delayed the final passage or even have killed the compromise. The bill’s hasty passage did however create some confusion about which provisions made it into the final legislation. Senate Democrats initially said a provision that seeks to keep welfare funds from being spent in strip clubs did not survive the final cut, but it was included.
Obama’s Budget Proposal for Higher Education. President Obama's budget proposal for fiscal year 2013 would increase spending on higher education. Specifically, the proposal increases Education Department spending to $69.8 billion — a 2.5 percent jump.
The President’s plan for higher education would focus on new financial incentives for colleges and universities that are able to keep their costs down, and add more funding for research grants. He is also asking for billions of dollars to go toward training programs in community colleges, including help for schools for that are able to help graduates secure internships and jobs in their field. However, the president would cut-off for-profit colleges from this type of funding.
While last year the focus was on holding the line on the maximum Pell Grant, this year’s proposal called for a host of new programs, from the community college fund to additional money for the Perkins Loan Program and a $1 billion “Race to the Top” for higher education.
The proposal includes an increase in funding for the National Science Foundation by 5 percent, to $7.4 billion. The National Endowment for the Humanities would get a slight increase, from $146 million to $154 million. Subsidized loans for financially needy undergraduate students, which have eroded gradually in financial aid funding compromises in recent years, would take another hit and borrowers would lose eligibility for the program if they stay enrolled full-time longer than three years for an associate degree, or six years for a bachelor’s.
Some proposed changes to the tax code would also affect higher education, making permanent the American Opportunity Tax Credit, which provides up to $2,000 per year for tuition, but including a cap on deductions for charitable donations.
While some research priorities received increased funding, the National Institutes of Health would remain at its current funding level. The administration reports a new grant-making process will enable the agency to do more with less.
February 14, 2012. President Obama's budget plan for 2013 has been released. White House Chief of Staff Jack Lew reported the plan is the proper balance between short-term stimulus and long-term deficit reduction. Republican leaders have responded with a very different assessment, describing the proposal as another product of a "tax-and-spend" administration lacking fiscal discipline.
Republicans have criticized the document for its proposals to increase spending in such areas as infrastructure and for its tax increases. House Republicans are expected to release their counter-proposal in late March which will put forward a sharp alternative to the President’s plan. Their proposal will provide deficit reduction through an overhaul of Medicare and other programs and will not call for tax increases.
The budget for the government's next fiscal year, which takes effect October 1, would shrink the deficit by $4 trillion over the next 10 years by cutting federal spending and by raising taxes on people earning at least $250,000 per year. For 2013, the White House projects a deficit of $901 billion, or 5.5 percent of GDP. That figure is down from an estimated $1.33 trillion in fiscal-year 2012, 8.5 percent of GDP. The goal is to reduce the budget gap to 2.7 percent of GDP, or $575 billion, by 2018.
The plan calls for deficit reduction to be achieved chiefly by slashing government expenditures. President Obama is proposing $2.50 in spending cuts for every $1 dollar the government would raise in revenue by raising taxes on high income-earners and from eliminating corporate tax breaks. Discretionary spending, annual government outlays approved by Congress on everything from health research and pollution control to education and child care, is slated to decline from 8.7 percent of GDP in 2011 to 5 percent in 2022. As part of these cuts backs, the defense budget would decrease $487 billion.
The bill itself is largely symbolic, as Congress almost always dismisses the White House budget in favor of its own spending plans. Still, such sweeping proposals are a good summary of a party's legislative priorities, and the budget is sure to play a major role on the campaign trail this year. Both sides will work to have the upper hand in the coming debate, with Republicans planning their focus on spending cuts similar to fiscal year 2010, and Democrats banking that voters are more concerned with jobs and the preservation of government programs.
January 31, 2012. President Obama will raise the nation’s debt limit to $16.39 trillion after the Senate on Thursday killed a measure to stop the president from adding $1.2 trillion to the total. After just over two hours of debate, the Senate voted 44-52 to block a motion to disapprove the debt-limit increase, which the House passed overwhelmingly.
The $1.2 trillion debt increase is expected to cover the nation’s borrowing requirements until after the November election. A GOP aide reported Congress would have to vote on another increase if the administration spends the money faster than anticipated.
The House voted 239-176, largely along party lines, to stop the president from raising the debt limit. But the measure needed to be approved by the Senate, as well. Democrats argued that raising the debt limit simply covers obligations the federal government has already incurred and does not authorize new spending.
All but one Republican — Senator Scott Brown of Massachusetts — voted to deny the President’s request to increase the nation’s legal borrowing limit. All but two Democrats — Senators Joe Manchin of West Virginia and Ben Nelson of Nebraska — voted to support the president’s request.
The complicated procedural maneuver, part of last summer’s bipartisan agreement to increase the debt ceiling, was designed to require President Obama to send a formal request to Congress before raising the debt ceiling. In a letter written to House Speaker John Boehner of Ohio earlier this month, the president explained the greater borrowing authority is needed to meet existing agreements.
January 24, 2012. Last Wednesday, the House of Representatives voted 239-176 to reject a request by President Obama to raise the debt ceiling. The vote was largely symbolic, since the Senate is expected to allow the debt ceiling hike. Regarding the House vote, six Democrats voted along with Republicans to oppose the debt ceiling increase.
The proposal came before the House as part of the bipartisan debt deal struck in August 2011. Under the deal, President Obama was required to submit a request to Congress to raise the debt ceiling in three stages. The latest request, which was the final stage, would raise the debt ceiling by another $1.2 trillion.
Despite Wednesday's vote, the president would still have the authority to raise the debt limit unless the Senate follows suit. Even then, both chambers would likely need to muster a two-thirds majority in order to override a presidential veto.
Under last year's debt increase law, the debt limit is automatically raised 15 days after the president officially notifies lawmakers that the government is close to the current $15.2 trillion cap — unless Congress votes to deny the borrowing increase. The agreement also permits a total debt limit increase of $2.1 trillion in exchange for an equivalent amount in spending cuts, which would be spread out over the coming decade. The first $900 billion comes from caps on the day-to-day operations of federal agencies.
With President Obama’s State of the Union speech scheduled for Tuesday and a Senate Republican retreat set for Wednesday, it is unlikely much work will get done on those days beyond basic floor debate. The Senate is expected to cast a vote on Thursday.
October 16, 2012
President Obama has formally notified Congress of his intent to raise the nation’s debt ceiling by $1.2 trillion. His notification comes two weeks after he had postponed the request to give lawmakers more time to consider the action.
Congress will have had 15 days to mull over before the nation’s debt ceiling automatically is raised from $15.2 trillion to $16.4 trillion. In a letter to House Speaker John Boehner of Ohio, the President explained that further borrowing is required to meet existing commitments. President Obama had sought to make the request at the end of last month, when the Treasury came within $100 billion of its borrowing limit. However, with Congress on recess, lawmakers from both parties asked the president to hold off. Since that time, Treasury officials have used special revenue and accounting measures to maintain the nation’s solvency. The White House cast the delay as a technicality, saying there is no chance the limit will not be increased, even if Republican lawmakers attempt to object. Currently, the House is out of session until January 17 and the Senate until January 23.
Under an agreement reached in August, Congress and the White House moved to raise the debt limit in three increments while also implementing $2.4 trillion in budget cuts. The deal, however, also gave Congress the option of voting to block each of the debt-ceiling increases by passing a “resolution of disapproval.” Even if such a resolution were passed, the President could veto it, and he could be overridden only by a two-thirds supermajority in each chamber. In September, when the first debt-limit hike was scheduled to take effect, the Republican-led House passed a disapproval resolution, but the Democrat-controlled Senate blocked it and the debt ceiling was raised.
White House officials said they do not expect the Senate to support a disapproval resolution this time even if the House passes one again.
October 31, 2011. Amid a flurry of counter-proposals from the deficit-reduction committee, House Speaker John Boehner of Ohio has rejected a Democratic offer to slash $3 trillion from future debts because it contained significant tax increases.
While GOP negotiators offered a slimmer package of savings with virtually no tax hikes, Speaker Boehner said the Democratic request for $1.3 trillion in new tax revenue was a non-starter. He also gave his most pessimistic outlook to date that the Super Committee would achieve its deficit target by the Thanksgiving deadline.
The 12-member panel reconvened Thursday morning, followed by a separate meeting later of the six Democrats. Democrats reported they had put forward a good-faith offer that included legitimate savings against the swelling federal debt and included a package of more than $300 billion in economic stimulus.
Earlier in the week, Democrats presented a plan to achieve $3 trillion in deficit savings over the next decade, cutting as much as $500 billion from Medicare, Medicaid and other health programs and raising $1.3 trillion in new revenue.
In contrast, Republicans have offered more than $2 trillion in savings over 10 years, highlighted by nearly $700 billion in spending reductions to Medicare and Medicaid. According to lawmakers and aides familiar with the GOP proposal, it includes an offer of more than $600 billion in savings from new tax revenue.
October 10, 2011. Congress has passed a spending bill to fund the government through mid-November. The 352 to 66 vote sent the measure to President Obama for signature and ended a spar over the sticking point involving disaster relief.
For several weeks, lawmakers debated over disaster assistance after House Republicans decided that $1 billion in emergency aid for victims of Hurricane Irene and other natural disasters should have been offset by cuts elsewhere in the budget. House and Senate Democrats opposed the idea, particularly over cuts to a loan guarantee program that helps automakers retool factories to meet new fuel economy standards. However in a recent compromise, the Senate dropped the $1 billion in aid and the cuts to clean energy programs. That action paved the way for the spending bill’s passage.
A far more difficult task continues as Congress prepares for a series of tough decision making over spending and policy that include everything from labor law and environmental regulations, to abortion and the Pentagon budget. Lawmakers must pass the 12 spending bills that lay out the day-to-day operating budgets for Cabinet agencies and departments.
The task may have been made easier by the fact that the GOP-controlled House, the Democratic-run Senate, and the president were in agreement on an overall $1 trillion-plus budget. Still, there remains some disagreement over which programs should be increased and which should be cut the deepest.
Republicans are pressing for big cuts to foreign aid and to preserve some budget gains for the Pentagon, while Democrats and President Obama want more money for domestic programs such as job training, Pell grants, and heating subsidies.
October 3, 2011. U.S. lawmakers have passed a stopgap spending measure to avert a government shutdown after September 30. The legislation refills disaster aid coffers drained by a series of recent storms, fires and tornadoes.
The compromise measure which passed the Senate last Monday, provides $2.7 billion in disaster aid, less than both Democrats and Republicans had aimed for. The disaster funding was cut back by $1 billion after a battle over whether that portion of the aid should have been paid for with spending cuts to clean energy programs favored by Democrats.
Republicans had insisted on requiring cuts to a loan guarantee program benefiting the auto industry to offset the most urgently needed portion of disaster aid – $1 billion in funding to prevent the Federal Emergency Management Agency from running out of disaster money. The battle had raised the possibility of a government shutdown, but the situation was defused after FEMA disclosed that the emergency money was not needed after all.
Since Congress was on recess, the measure passed the House with the unanimous permission of all members present in a chamber. The only three lawmakers present for the five minute session included Republican Congressmen Andy Harris of Maryland and John Culberson of Texas, and Democratic Congressman Chris Van Hollen of Maryland. Representative Harris presided and Representative Culberson offered the motion to pass the bill.
The administration says the influx of disaster money will allow FEMA to resume funding longer term rebuilding projects that had been put on hold to conserve aid to provide immediate help to victims of Hurricane Irene and other recent disasters. The stopgap bill funds the government through Tuesday, allowing lawmakers to return this week and hold a recorded vote on another measure that would keep the government open through mid-November.
The approved legislation now goes to the White House for President Obama's signature.
House Subcommittee Releases Proposed Education Budget. Lawmakers in the House have released a proposed budget for the 2012 fiscal year that would preserve the maximum Pell Grant at $5,550. However, details highlight changes in the program’s eligibility criteria. In addition, the proposed legislation raises the budget for the National Institutes of Health (NIH) by 3.3 percent, an increase of $1 billion, reversing a Senate-approved cut of 1.8 percent and representing a major change from the 5 percent cut proposed earlier this year.
Regarding impacts on the Pell Grant program, students who attend college less than half-time would no longer be able to receive the grants. The grants could be used for only 12 semesters, not 18. Students who are eligible for less than 10 percent of the maximum grant would receive nothing. The bill would also change income protection allowances and lower the income level that results in an expected family contribution of zero. Over all, the changes would cut $2.3 billion from the Pell Grant program in 2012.
Unlike the Senate’s proposed budget, approved by its Appropriations Committee two weeks ago, the House version would continue subsidizing student loan interest payments during the six-month period between when borrowers leave school and when they must start paying back the loans. The Senate committee had eliminated that benefit, using the savings to keep the Pell Grant at its current maximum without any eligibility changes.
The budget proposal would also cut all national and community service programs, including AmeriCorps, and programs in international and foreign language education. In addition, it would block implementation of two of the Education Department's "program integrity" rules -- the state authorization rule and the data collection for the "gainful employment" provision.
For more information, visit the website of the Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies, HERE.
September 26, 2011. As the “super committee” continues to address the nation’s debt, talks of another potential government shutdown have surfaced. On Friday, the Senate rejected a House temporary spending bill which will keep federal agencies funded through November 18.
The measure currently under deliberation includes critical new disaster funding assistance for states hit hard by Hurricane Irene, Tropical Storm Lee, and a series of recent wildfires and tornadoes.
As lawmakers in the House and Senate continue to disagree on the level of disaster aid and how to pay for it, Senate Majority Leader Harry Reid of Nevada has announced his intention to push for a vote on a new package this week. His compromise package incorporates the GOP's lower overall disaster relief spending levels and eliminates cuts to clean energy programs.
Both chambers of Congress must agree on the new spending legislation to avoid a partial shutdown after the close of the current fiscal year on September 30. Economists are closely monitoring this latest standoff as it could have far-reaching negative consequences beyond the political arena.
September 19, 2011. Senator Mark Warner of Virginia and Senator Saxby Chambliss of Georgia are spearheading a new effort to urge their colleagues serving on the “super committee” to seek deficit reductions beyond the proposed minimum.
The bipartisan group of senators, organized by Senators Warner and Chambliss is requesting the deficit-cutting panel to “go big” and reduce the deficit by $4 trillion over 10 years, instead of the planned $1.2 trillion to $1.5 trillion. The new coalition also wants the 12-member super committee to consider tax code changes to generate more revenue, as well as changes to entitlement programs such as Social Security, Medicare and Medicaid. According to Senators Warner and Chambliss, the larger reduction in the deficit will have the right impact on the financial markets.
Senator Warner’s goal is to build on the work of the Gang of Six — three Republicans and three Democrats, including himself — who developed a bipartisan plan endorsing $3.7 trillion in savings. The six senators also supported rewriting tax codes to broaden the tax base, cutting defense spending, and overhauling entitlement programs.
The coalition — made up of 18 Republicans, 17 Democrats and one Independent — represents more than one-third of the members of the U.S. Senate and includes all the members of the Gang of Six, except Senate Majority Whip Dick Durbin of Illinois.
August 29, 2011. House Speaker John Boehner of Ohio has requested the Obama administration provide Congress with a list of upcoming regulations that will have an economic effect greater than $1 billion. The request comes ahead of planned House votes this fall on GOP legislation that would require congressional approval of major federal regulations and after the White House announced plans to streamline hundreds of existing regulations across all government departments.
The plans stem from a January executive order that also called for ensuring that future federal rules, while protecting heath and the environment, also promote growth and use the “least burdensome” tools to achieve their goals.
August 22, 2011. Following the debt ceiling debate, White House budget chief Jacob Lew has ordered agency heads to submit spending plans for the upcoming budget at least 5 percent below this year’s levels. He has also requested them to propose ways to trim a total of at least 10 percent of their spending.
By requesting two sets of potential savings from agencies, the move is toward fulfilling the debt-ceiling deal, which created a series of annual spending targets and would save tens of billions of dollars a year. The spending that federal agencies have been ordered to trim is expected to consume more than $1 trillion of this year’s $3.8 trillion federal budget. The rest of the budget covers benefit programs and interest payments on the government’s $14.3 trillion debt.
Budget Chief Lew suggests that savings can be found by eliminating unneeded programs and making agencies more efficient. He also invites agency heads to propose initiatives that would spark economic growth and would help the administration make decisions about living within overall spending limits.
When Congress returns from its summer recess in September, work will begin with the special bipartisan panel of 12 lawmakers that the debt-ceiling agreement created to try to craft a compromise $1.5 trillion, 10-year debt reduction package. As another part of the debt-cutting deal, the two sides agreed to a separate $900 billion in 10-year savings from agency budgets. The details of those cuts will have to be worked out every year, but they will be evenly divided between national security and domestic programs.
Republicans are holding firm that tax and spending cuts are needed to blow life back into the economy and create jobs. President Obama plans to unveil a jobs proposal next month mixing tax reductions, construction initiatives and deficit reduction.
In reaching the debt ceiling compromise, President Obama and Congress have agreed on a change that would make graduate students responsible for the interest that accrues on their loans while they are in school. For now, Pell Grants and other financial aid programs remain untouched.
The move eliminates subsidized federal loans for graduate students -- loans, distributed by need, on which the government pays the interest that accrues while the student is enrolled in school. The cuts will save the government about $18 billion over 10 years and the change does not reduce the amount that students can borrow, but it will shift about $125 billion from subsidized loans to unsubsidized loans.
Congress voted to cut the subsidies as part of the final, last-minute deal, but the eventual elimination of subsidized graduate loans had been up for discussion since February, when President Obama proposed the cut to protect Pell Grants and other student aid programs in his budget plan for the FY 2012. Keeping the maximum Pell Grant at $5,550 was the administration’s top priority and ending subsidized loans for graduate students was seen as the most palatable option.
For graduate schools, the cut presents a challenge of how to help students and encourage enrollment.
August 15, 2011. As part of the deal to increase the debt ceiling, the Joint Select Committee on Deficit Reduction was created. This 12-member team, known as the "super committee," will begin work when Congress reconvenes following the August recess. The team is comprised of three Republican Senators and three House Republicans, three Senate Democrats and three House Democrats. Members are tasked with putting together a plan that will save the United States an additional $1.5 trillion in debt savings in the next 10 years.
Last week, the leaders of both parties announced their respective appointees. On the Republican side, Senate Minority Leader Mitch McConnell (KY) appointed Senator Jon Kyl (AZ), member of the Finance Committee and the second highest ranking Republican in the chamber, Senator Rob Portman (OH) who served as the White House budget director during the Bush administration and current member of the Budget Committee, and Senator Patrick Toomey (PA), member of the Budget and Banking committees. House Speaker John Boehner (OH) appointed Representative Jeb Hensarling (TX) (co-chair), chairman of the House Republican Conference, Representative Dave Camp (MI), chairman of the House Ways and Means Committee, and Representative Fred Upton (MI), chairman of the House Energy and Commerce Committee.
On the Democratic side, Senate Majority Leader Harry Reid (NV) appointed Senator Max Baucus (MT), chairman of the Senate Finance Committee, Senator John Kerry (MA) who holds senior positions on the Finance, Commerce, and Small Business committees, and Senator Patty Murray (WA) (co-chair), member of the Appropriations committee. House Minority Leader Nancy Pelosi (CA) completed the membership by naming Representative Xavier Becerra (CA), senior member on the House Ways and Means Committee, Representative James Clyburn (SC), a veteran member on the Appropriations Committee, and Representative Chris Van Hollen (MD) who was a part of the debt talks led by Vice-President Biden and is also the ranking Democrat on the Budget Committee.
The Committee has until November 23 to come up with a deficit reduction plan. If a majority approves the plan, the House and Senate must vote on it by December 23. If the plan is rejected, it will automatically trigger $1.2 trillion in cuts in areas like Medicare and national security.
August 1, 2011. Sunday night, President Obama and congressional leaders sealed a deal to raise the federal debt limit that includes sharp spending cuts but no new taxes, breaking a partisan impasse that has driven the nation to the brink of a government default. The agreement brings to an end a crisis that has consumed Washington.
The deal was negotiated primarily by Vice President Biden and Senate Minority Leader Mitch McConnell of Kentucky with input from Speaker John Boehner. President Obama finalized the agreement in phone calls to each of the four congressional leaders shortly after 8 p.m.
The agreement raises the $14.3 trillion debt limit in two stages by as much as $2.4 trillion and the increase would last into 2013. Under the plan, a new joint congressional committee would be charged with coming up with $1.5 trillion in additional deficit reductions which actuaries report is sufficient enough to match the Treasury’s remaining borrowing needs to get though 2012.
The deal puts in place the annual discretionary spending caps found in the bill the Republican-controlled House passed last week worth about $917 billion in cuts over 10 years. But those caps, from $1.043 trillion in fiscal 2012 to $1.234 trillion in fiscal 2021, are now split between “security” and “non-security” spending, enforceable by across-the-board cuts. The bill defines the “security category” as ‘discretionary appropriations associated with agency budgets for the Department of Defense, the Department of Homeland Security, the Department of Veterans Affairs, the National Nuclear Security Administration, the intelligence community management account, and all budget accounts under international affairs.
To give some added flexibility, the plan allows for a situation where the committee will not meet its full target but still generates $1.2 trillion in savings, for example, to match an equivalent debt increase.
The spending reductions themselves can be delayed to take effect in 2013 to soften the impact on the economy. And in some cases, across-the-board cuts could be used as a tool to fill gaps in the committees work product. The plan also includes using severe across-the-board cuts if the committee of 12 cannot reach an agreement on spending cuts. The cuts would affect Democratic domestic priorities, including Medicare, but also about 50 percent would come from defense spending, which is a major priority for many Republicans. The goal is to give both parties an incentive to avoid a deadlock in the committee.
The severity of the potential defense cuts included in the bill, resulted in backlash from House Republicans, which could force the negotiators to make more changes to the bill if it is to pass in the House. A final vote is expected to take place before the debt ceiling is reached on Tuesday, August 2.
To view more highlights of the deal, visit HERE.
July 26, 2011. Last Tuesday, the "Gang of Six" [a bipartisan group composed of three Republicans, Saxby Chambliss of Georgia, Mike Crapo of Idaho, and Tom Coburn of Oklahoma, plus three Democrats, Kent Conrad of North Dakota, Mark Warner of Virginia, and Senate Majority Whip Dick Durbin of Illinois] released their debt reduction plan as a possible way out of the debt ceiling crisis. Democratic and Republican lawmakers both were pleased the Gang’s efforts to move toward consensus as the framework of the Plan included ideas to which both sides could agree. Both sides however raised questions about the lack of details in the Plan that explained exactly what programs and benefits would be cut.
Under the group's proposal, $500 billion in budget savings would be immediately imposed, with marginal income tax rates reduced and the controversial alternative minimum tax ultimately abolished. The plan would create three tax brackets with rates from 8% to 12%, 14% to 22%, and 23% to 29% - part of a new structure designed to generate an additional $1 trillion in revenue. It would also require cost changes to Medicare's growth rate formula as well as $80 billion in Pentagon cuts.
President Obama urged Congressional leaders to use the plan as a blueprint, but his quick endorsement of the proposal may make it even tougher to sell to House conservatives. In addition, talks between the President and House Republicans have now halted. Speaker John Boehner and the President continue to talk and develop a “grand bargain” plan that the two both feel their parties could accept.
With the August 2 deadline by which a plan to decrease spending must be achieved to avoid the nation reaching its debt ceiling, both sides continue to propose plans to reduce debt, but where those reductions come from and whether or not raising revenue either through the closure of certain tax breaks or credits or through the elimination of tax breaks or an increase in certain taxes still remains the point at which talks stall.
Republicans and Democrats largely agree on a set of spending cuts included in the first phase of a proposal offered by Republicans amounting to about $1 trillion over 10 years. It's the second phase — in which a congressional committee would be charged with finding nearly $2 trillion in savings — that runs into significant hurdles.
Negotiations will continue this week under Secretary Tim Geinter’s stark warnings that the world market continues to watch Congressional movement.
July 18, 2011. According to White House Budget Director Jack Lew, there is still time for President Barack Obama and Congressional leaders to reach a major deficit-reduction agreement. Mr. Lew has said the president is prepared to strike a deal to reduce the deficit by as much as $4 trillion over the next decade, but is waiting for Republican leaders.
House Republicans have coalesced behind the Cut, Cap and Balance Act that would cut spending by $111 billion in fiscal year 2012 and cap spending at 18 percent of gross domestic product by 2021. It would also require Congress pass a balanced budget amendment before raising the debt limit by $2.4 trillion.
The Senator suggests $1 trillion in savings could come from eliminating special tax breaks, such as the tax subsidy for ethanol. According to Senator Colburn, revenues can be increased by adjusting the tax code and lowering it, saving over $1 trillion.
Senator Coburn has also proposed cutting $1 trillion from the Defense Department budget over the next decade and more than $500 billion from other government agencies. He favors saving $1 trillion in federal interest payments over the next nine years by curbing the projected growth of Medicare, Medicaid and Social Security.
July 11, 2011. President Barack Obama and Republican leaders in Congress clashed Sunday over the scope of an effort to cut the federal deficit. The president urged the top eight congressional leaders from both parties during the latest meeting at the White House to strive for the largest possible package, some $4 trillion over 10 years. Republicans, however, made a pitch for a scaled-down plan of roughly $2 trillion over 10 years that does not include about $1 trillion in tax increases the White House is seeking.
Republicans have linked a vote on raising the government's $14.29 trillion borrowing limit to a deficit-reduction deal. Republican and Democratic leaders have said they will not let the U.S. default, but the Treasury Department says the government could begin defaulting on its financial obligations, including debt payments, after Aug. 2 if the debt ceiling is not increased.
Officials from both parties report the leaders have made little progress toward reaching a deal that could win support from conservatives opposed to tax increases and liberals opposed to Medicare cuts. In the meeting on Sunday, President Obama tried to break the deadlock over taxes by saying he is willing to reform the tax code in a way so Republican members of Congress will not have to vote for a tax increase. Republicans restated their position that a $4 trillion plan, which would presumably include tax increases, could not pass the House. They also emphasized the lack of time to pull the deal together and push it through.
The president plans to host additional meetings throughout the week with leaders and has requested Republicans lay out the type of deficit reduction deal they would like to see. At this point, President Obama has stated to lawmakers he will reject a series of short-term debt ceiling increases because they would create too much uncertainty.
July 5, 2011. Last week, Senate Majority Leader Harry Reid announced on the Senate floor that the Fourth of July recess would be cancelled. His announcement came one day after the President chided Congress for not stepping up its working pace to hammer out a deficit deal.
The Senate is expected to come into session this afternoon and remain in session all day Wednesday, July 6. However, the rest of the week is still to be determined. Items that could be on the agenda include the McCain-Kerry Libya resolution authorizing a limited one-year mission for U.S. forces, plus some jobs packages. Senate Budget Chairman Kent Conrad is also ready to unveil a long-awaited Democratic budget plan.
The battle over the deficit has now spilled out in a big way on Capitol Hill after several weeks of relatively quiet bipartisan negotiations led by Vice President Joe Biden. Now both sides are digging in on their respective positions. Democrats are hammering the message that Republicans would rather protect the wealthy from more taxes while Republicans say Democrats are trying to hike taxes and spend more.
June 27, 2011. Deficit reduction talks scheduled for last Thursday were cancelled after House Majority Leader Eric Cantor of Virginia announced he was withdrawing from the negotiations.
According to Representative Cantor, he made the decision to withdraw from talks because Democrats were insisting on tax increases. As a result, Congressional Republicans demanded that President Obama meet directly with GOP leaders to resolve the issues. With the clock ticking toward an August 2 deadline, negotiations are now deadlocked as Republicans say they will not back the $400 billion in new taxes on corporations and the nation’s wealthiest households proposed by the Democrats, while the Democrats say they will not reduce health benefits for retirees under the Medicare program as proposed by Republicans.
The breakdown of the talks comes after seven weeks of negotiations that all sides say made real progress toward a plan. Vice President Biden and negotiators from both parties had tentatively agreed to more than $1 trillion in savings and had begun to tackle the toughest issues including Democratic demands for higher taxes and spending cuts at the Pentagon, and Republican demands for sharp cuts to health and retirement programs.
Though Democrats do not back the deep cuts to annual spending that Republicans have proposed, they do support a five-year freeze that could save roughly $500 billion. Both sides also back cuts to military spending that could save roughly $180 billion. And while Democrats will not consider major changes to Medicare, the Medicaid program could see significant cuts.
June 20, 2011. As talks continue, Vice President Joe Biden recently commented that negotiators and the White House are working toward a comprehensive deficit-reduction plan that will be able to secure significant support among members of both parties.
Last Thursday’s meeting focused largely on non health care mandatory spending. The group agreed to continue the faster pace with as many as four meetings scheduled this week. Plans for future meetings will include discussions on health care and discretionary spending.
According to House Majority Leader Eric Cantor of Virginia, the group is very serious about seeing if they can come to some resolution, covering every type of spending program there is. Rep. Chris Van Hollen of Maryland, another participant in the talks, confirmed after last Thursday’s meeting that the working group members are hoping to agree to the basic framework of an agreement by July 1.
Congress faces an August 2 deadline set by the Treasury Department to vote to raise the federal borrowing limit or else the country will default on its debt obligations.
Virginia Senator Mark Warner recently filed legislation to create a single electronic platform to track all federal spending and increase transparency. The Digital Accountability and Transparency Act (DATA) mirrors legislation already introduced in the House by Representative Darrell Issa of California, Chairman of the U.S. House Committee on Oversight and Government Reform. The DATA would establish an independent body to track all grants, contracts, loans and agencies' internal expenses, with all of that information available online for the public.
June 13, 2011. Vice President Joe Biden met with Republican negotiators last Thursday in another closed-door meeting to discuss the nation’s debt limit. It was reported that talks continue to show how far apart both sides remain on the issue. In the 2 1/2-hour meeting, the sixth meeting held between the administration and a handful of top lawmakers, Vice President Biden and Treasury Secretary Timothy Geithner made a pitch for more revenue.
Both sides hope to pass the measure well before an estimated early August deadline to avoid default on U.S. obligations. With the debt ceiling raised, the government could then resume borrowing more than $100 billion a month to pay its bills.
Negotiators recognize talks are moving slowly and agree to pick up the pace. They have scheduled three meetings for this week and taxes remain the biggest sticking point. In earlier talks, negotiators focused only on reducing expenditures. Democrats in the group pushed their party's argument that the deal should include tax increases and not just spending cuts. But Republicans showed no sign of budging from their opposition to tax increases.
Majority Leader Eric Cantor, who's representing House Republicans in the talks, told the administration that it will be extremely difficult for tax increases to pass the GOP-controlled House. Strategy has become more complicated with the demand for any increase in the government's borrowing limit be matched with spending cuts of equal or greater size. Under current estimates, it will take at least $2.4 trillion in new borrowing simply to keep the government afloat until 2013.
There's no sign the negotiators are discussing cuts of that magnitude, but the Vice President reports the group will continue to aim for more than $1 trillion in deficit savings. To view an interactive graphic of the federal debt ceiling, visit HERE.
June 6, 2011. A vote last week in the House has highlighted an important marker, signaling Republicans in Congress will not raise the national debt limit without conditions attached to curb future spending. On May 31, the Republican-led House voted down a measure that would have approved a new round of federal borrowing without such conditions. Public opinion polls suggest many Americans are averse to simply raising the US debt limit one more time with no strings attached.
Republican lawmakers are generally opposed to any net increase in government tax revenue. By contrast, Democrats argue that fiscal reforms should ultimately involve reforms that keep tax rates low, but also raise additional federal revenue by limiting things like credits and deductions in the tax code.
Policy analysts feel that given the political lay of the land, it is unlikely that negotiations to raise the debt ceiling will yield anything like the $4 trillion in deficit reduction spread over 10 years, proposed last year by President Obama's bipartisan fiscal commission. Instead, many believe that legislators will chose to reduce spending by $1 trillion to $1.5 trillion over ten years as a “down payment” and means to increase debt capacity temporarily until after the 2012 elections
Negotiators behind closed doors have identified $1 trillion in agricultural subsidies, federal pensions and other programs as areas for possible reductions. The White House has also proposed squeezing savings from federal payments to Medicare providers, which would not reduce benefits to seniors. The idea of an annual cap or automatic sequestering process on federal spending is also being discussed. Advocates are urging legislators to exempt Medicaid from any caps or sequestering.
Treasury Secretary Timothy Geithner has warned if Congress fails to approve a boost in the debt ceiling by early August, the federal government will find it very difficult to maintain normal operations.
May 31, 2011. Last Wednesday, the US Senate rejected a proposed budget that would transform Medicaid into a block grant program. The proposal would have also meant steep cuts in Medicare by privatizing the health program for the elderly. The Senate voted against the budget plan which had already been passed by the House, by a 57 to 40 margin. Five Republican Senators voted with the majority against the plan. Both of Virginia’s Democratic senators joined their colleagues in opposing the House budget.
The House passed the budget plan on April 17, 2011, by a 235 to 193 vote. The budget blueprint calls for tax cuts for the richest Americans and most notably, a reduction in costs for both Medicare and Medicaid.
The Senate defeat comes at a time of strong voter opposition to any cuts in the government-backed health care plans. Fears about Medicare cuts contained in the rejected budget proposal are said to have influenced the recent outcome of a special election for a House candidate in a New York state district that is traditionally very conservative. It is reported that the win has possibly boosted Democratic prospects in the 2012 presidential and congressional elections.
May 23, 2011. The Senate’s annual budget process has been placed on hold to give the outcome of bipartisan deficit-reduction talks a chance to materialize. Senate Budget Committee Chairman Kent Conrad has decided to not move forward with a budget plan of his own until the group of lawmakers led by Vice President Joe Biden has completed their work.
This decision could make it easier for Congress to pass any agreement the bipartisan group works out by allowing a plan to bypass procedural hurdles that frequently derail legislation in the Senate. However, it increases the pressure on the group. At this point, the group is seen as the best hope for a bipartisan deal on taxes and spending that could give lawmakers the opportunity to increase the country's $14.3 trillion borrowing limit.
Chairman Conrad has been involved with several other efforts to craft a deal to keep the country's fast-rising debt under control, but they have run out of steam as lawmakers struggle to resolve a deep divide over taxes and healthcare costs. Also, the “Gang of Six”, negotiators seeking consensus on deficit reduction plans, lost a member last week. Senator Tom Coburn (R-Oklahoma) left talks last Tuesday over proposed cuts to Medicare. Senator Coburn’s departure is significant as it sends a hard blow to hopes for a bipartisan settlement of the budget negotiations. Budget experts report the Biden talks involving the debt ceiling may not be capable of producing the possible results of the Gang’s discussions on tax and entitlement reform, discretionary and mandatory spending cuts, and caps.
As chairman of the Budget Committee, Conrad is responsible for coming up with a plan on taxes and spending that is supposed to pass by April 15 each year. Unlike other legislation, it only requires a simple majority vote to pass the Senate. The House passed their own budget plan last month, which calls for sharp spending cuts and an overhaul of government-run health programs in order to keep the country's debt under control.
May 16, 2011. Despite recent optimism that the framework of a deal on deficit spending might be coming together, Senate Democrats and Republicans still appear headed in opposite directions. Dueling messages were apparent as bipartisan congressional negotiators convened in a second session with Vice President Joe Biden. Although both sides are keeping any detailed proposals quiet, the early posturing suggests negotiators have substantial differences to resolve before any deal can be struck. The meeting did not yield any specific developments, although participants reported progress.
At this point, it appears Budget Chairman Kent Conrad (D-North Dakota) lacks the votes needed to get a fiscal 2012 budget resolution through his committee. Conrad’s resolution aims to cut $4 trillion from the deficit over the coming decade. According to Conrad, the ultimate fate of his nonbinding budget blueprint is unclear and it might not see a floor debate, given the broader debt talks.
Initially government officials warned that a vote to increase the nation’s debt capacity would have to occur when the nation’s approved debt capacity reaches the current $14.3 trillion limit. In recent days however, Treasury Secretary Timothy Geithner reports it is possible to continue to pay debt off without increasing the limit through August 2, when the United States would run the risk of default. A vote on increasing the debt capacity will not likely occur until just before this deadline and there is some speculation that a vote to raise debt capacity could be stalled until after elections in November.
Lawmakers in both parties continue to say they are willing to raise the limit, but only in exchange for a plan to reduce future borrowing.
May 9, 2011. Vice President Joe Biden hosted a meeting at Blair House with the congressional task force responsible for developing a plan to address deficits and spending. This was the commission’s first meeting and participating was Finance Chairman Max Baucus (D-Montana), Senate Minority Whip Jon Kyl (R-Arizona), Senate Appropriations Chairman Daniel Inouye (D-Hawaii), House Majority Leader Eric Cantor (R-Virginia), Assistant House Minority Leader James E. Clyburn, (D-South Carolina), and ranking Budget Committee Democrat Chris Van Hollen of Maryland.
It is unclear if some Republican members will insist on the type of entitlement cuts that were proposed in the budget resolution adopted on the House floor last month (H Con Res 34), but negotiators will need to settle on how long a debt limit increase will last. They understand it is an economic decision fraught with political implications, such as whether another debt ceiling vote will be needed before the 2012 elections. With those questions up in the air, Budget Chairman Kent Conrad (D-North Dakota), who is a member of the Gang of Six, has plans to move a fiscal year 2012 budget resolution through his committee. However, the battle earlier this year over fiscal 2011 discretionary spending and the impending debt ceiling vote, may have impacted the normal budget process.
It is possible that the annual budget resolution will become the vehicle for a broader debt debate and we would see a vote on the Senate floor. Congressional leaders and the negotiators meeting with Vice President Biden may decide that instead of debating a debt reduction plan through the normal budget process, they may want to move directly to writing legislation.
The task force plans to meet again on Tuesday and to continue discussions on the most important challenges.
May 2, 2011. The Obama Administration and Congress have begun to focus on setting policies to lower and decrease the nation’s debt dramatically.
President Obama has launched a congressional task force to help cut the federal deficit and reduce borrowing. The commission will be chaired by Vice-President Biden and consist of two Senate and two House Democrats and one Republican Senate and one Republican House member. Virginia Congressman Eric Cantor has been named to serve on the task force.
Discussions are scheduled to begin May 5, and the President’s goal is to have a bipartisan plan to address deficits and spending. Lawmakers from both parties are calling for some agreement on deficit reduction before the government reaches a limit in the coming months. The Treasury projects the federal debt will reach its statutory limit by the middle of this month, though it will be able to take measures to extend the borrowing capacity until the beginning of July.
The Pell Grant Program. With deficit reduction as a priority, The Pell Grant Program, the federal government's primary financial aid plan for needy college students, may be at risk for additional cuts in the future. The program has increased by about 150 percent since 2005-6, from $14.4 billion to an estimated $34.4 billion in 2010-11.
A group of economists who specialize in higher education and financial aid has weighed in with a series of recommendations about how Congress might do the least damage to the program’s key goal which is, aiding the neediest students who are capable of success in college and helping them make educational progress.
The changes proposed would alter eligibility requirements in several ways. One would increase to 15 from 12 the number of credit hours in which a student must be enrolled to qualify for the maximum Pell Grant. This change may align the Pell Grant requirement more closely with what most colleges define as a full-time student, even though federal data show that more than 4 in 10 Pell recipients are enrolled at least 12 but fewer than 15 hours.
A second proposed change would decrease from nine the number of years for which a student could qualify for a Pell Grant. Only 3 percent of Pell recipients have grants for more than six years.
The economists also endorse the idea of rolling back some of the changes lawmakers have made in recent years to broaden students' eligibility for Pell Grants, although they urge Congress not to do things that work against the general trend.
April 25, 2011. Details of the long-term continuing resolution (CR) for fiscal year 2011 (H.R. 1473) have been released. The following information provides specifics associated with higher education, scientific research and healthcare.
The CR provides $157.7 billion for Labor, Health and Human Services (HHS), Education and Related Agencies programs, about $5.5 billion or 3.36% less than in fiscal year 2010. It included a 0.2% spending cut for all non–defense programs.
Among HHS reductions, the CR terminates the Patient Protection and Affordable Care Act's Consumer Operated and Oriented Plan (CO-OP) and Free Choice Voucher programs. The CO-OP program would provide $6 billion in grants and start-up funds beginning in July 2013 to foster the creation of non-profit, member-run health insurance companies that operate inside and outside state insurance exchanges. The voucher program, effective in January 2014, would require employers that offer minimum essential coverage and contribute to the premium, to give qualified employees a voucher to purchase coverage through the exchanges.
Finally, the CR also included a $600 million cut to community health centers, $47 million cut to Children’s Hospital Graduate Medical Education (CHGME) funding and $7 million cut to poison control centers.
April 18, 2011. With Congress hurtling toward its next fiscal showdown — this time over the government’s borrowing — pressure is mounting on a bipartisan group of senators to reveal their long-term debt-fighting plan.
The “Gang of Six” has been working behind the scenes to produce a plan that would tamp down the nation’s reliance on credit and appeal to both parties. For months, the group has reported to have no deadline and only a desire to get the substance right. But an upcoming vote on the statutory debt limit, which now stands at more than $14 trillion, could create some pressure.
The six senators include Mark Warner, D-Virginia; Saxby Chambliss, R-Georgia; Majority Whip Richard J. Durbin, D-Illinois; Michael D. Crapo, R-Idaho; Budget Chairman Kent Conrad, D-North Dakota; and Tom Coburn, R-Oklahoma. They have been working to draft legislation based on the 2010 recommendations of the president’s fiscal commission to address the deficit. It is expected to be a plan that puts everything on the table including discretionary spending, entitlement program changes, eliminating many tax incentives and a broader overhaul of the tax code.
The lawmakers have been talking and working with a range of other senators and some members of the House. Senator Conrad has delayed the introduction of his fiscal 2012 budget resolution in the hope that the group can produce a bipartisan plan.
Shared Prosperity & Fiscal Responsibility. Last week, President Obama released his framework for shared prosperity and shared fiscal responsibility. The purpose of the framework is to address the need for a comprehensive, pro-growth economic strategy that invests in winning the future, lays the foundation for strong private-sector job growth and ensures that shared prosperity will keep the American dream alive for generations to come. According to the president, a key component must be a commitment to fiscal responsibility. During his fiscal speech, the President introduced his comprehensive, balanced deficit reduction framework to cut spending, bring down debt and increase confidence in the nation’s fiscal strength, while supporting economic recovery and ensuring we are making the investments we need to win the future. Visit HERE to view a Fact Sheet of the framework.
April 11, 2011. During the late night hours on April 8, lawmakers reached a last-minute deal to avoid a government shutdown, which would have begun at 12:00 a.m. on Saturday. The agreement was announced just one hour before the shutdown was to occur and includes $38.5 billion in budget reductions. Both political parties were able to come to an agreement that will cut spending and keep government open.
Lawmakers decided on a six-day extension, or "bridge" of government funding, which would allow Congress to work out a final solution to last the remainder of the 2011 fiscal year, ending in September. Voting for the resulting agreement is expected to take place this week.
The last complete US government shutdown occurred in 1995, lasting five days. In the event of a government shutdown, essential federal employees are still required to work, but nonessential personnel are placed on unpaid furloughs. Essential staff includes military personnel, air traffic controllers, emergency officials, and intelligence officials.
Federal Budget Details Released. On April 5, Representative Paul Ryan, Chairman of the House Budget committee released the committee’s proposed fiscal year 2012 budget resolution.
Chairman Ryan’s proposed budget includes a $5.8 trillion cut in spending over 10 years compared with the current congressional baseline. Many of the cuts proposed diminish the federal government’s support of health care benefits through Medicare and Medicaid. It would cut taxes by $4.2 billion over 10 years, driven by a reduction in the top rates on corporate and individual income. The proposed budget establishes a binding cap on total government spending as a percentage of the economy with automatic enforcement by sequester.
Also included in the proposed budget is a repeal of the expansion of Medicaid coverage as written in the Affordable Care Act. The proposed budget rescinds all funding for implementation of heath reform but retains Medicare payment cuts included in the Affordable Care Act.
Cuts totaling $771 billion to Medicaid over 10 years are included in the proposal. This cut in spending will be achieved by converting Medicaid to a state block grant and removing federal Medicaid “program requirements and eligibility criteria.”
The budget proposal also fundamentally restructures Medicare. Starting in 2022, new beneficiaries would no longer receive traditional Medicare benefits. Instead, they would choose a health insurance plan offered by a federally-administered exchange and would receive a federal subsidy to cover part of their monthly premium.
The proposals in Chairman Ryan’s budget are illustrations of a desire to decrease the federal deficit and reduce government spending. They set the stage for the debate that is to come between the Senate, House and the White House.
President Obama is expected to release the White House deficit reduction plan this week.
April 4, 2011. A possible deal on fiscal 2011 appropriations may be taking shape, with negotiators zeroing in on a top-line number for spending cuts. However, lawmakers have not been quick to compromise as they weigh a desire for big spending cuts against the risks of a government shutdown.
President Obama has made separate phone calls to Speaker Boehner and Senate Majority Leader Reid to discuss the ongoing negotiations on the Continuing Resolution (CR). He discussed the need to cut spending and highlighted the progress that has been made. The President has instructed his team to continue to work to help reach resolution on the composition of cuts, and reiterated opposition to cuts that will undermine economic growth, job creation, and the ability to win the future.
Running short on time, President Obama urges Congress to reach a final solution and avoid a government shutdown which would be harmful to economic recovery. With one week before the current spending law (PL 112-6) expires on April 8, leaders in both chambers have said they want the current stopgap funding law to be the last short-term CR this fiscal year.
March 21, 2011. House and Senate leaders have begun talks to figure out how to fund the government for the rest of the fiscal year, but they have yet to agree on which areas of the federal budget should be targeted for cuts. To strike a deal on a fiscal 2011 spending bill, discussions may have to target domestic discretionary spending, military spending and entitlement programs. The Senate and House remain deadlocked over a final fiscal 2011 spending bill and whether it will include major spending cutbacks or more moderate reductions.
Staff representing the House, Senate and the White House met last Wednesday to discuss how to fund the government after the latest short-term continuing resolution (H J Res 48) runs out on April 8, just less than six months before the end of fiscal 2011 on September 30. Lawmakers in both chambers have said the latest stopgap spending bill, may be the last. Negotiators only have a few weeks to strike a broad spending deal.
March 14, 2011. As another government shutdown moves closer to reality, last Wednesday U.S. Senators voted to reject two proposals to cut federal spending. A proposal passed by the House that would slash another $57 billion from the fiscal 2011 budget failed 44 votes to 56. An alternative plan to cut $6.2 billion in federal spending also failed to garner any support with a vote 42 to 58. House leaders have begun behind-the-scenes negotiations on another short-term stopgap spending measure to keep the government operating beyond March 18. The measure would likely be similar to the two-week continuing resolution that cut $4 billion, which passed earlier this month.
Children’s Services, CHGME. Last week, U.S. Representative Frank Pallone Jr. (New Jersey) announced his intention to introduce legislation that funds training for resident pediatricians at children's hospitals. The Obama administration's proposed budget for 2012 would eliminate the $300 million annual appropriation that funds graduate medical education programs to train resident pediatricians, replacing the program with targeted investments to increase the primary care workforce. Eliminating the program has a major impact on access to primary and specialty care for children. Due to the current shortage of subspecialists in pediatrics, Rep. Pallone plans to introduce a bill in the near future that reauthorizes and funds the program. Rep. Pallone currently has a seat on the Energy and Commerce Health subcommittee.
March 7, 2011. Last week, Congress agreed on a bill that puts off the possibility of a government shutdown for two weeks. The Senate cleared the temporary spending measure by an overwhelming 91-9 vote after being passed in the House. President Obama signed the Continuing Resolution (CR) on Wednesday, March 2, and the resolution includes $4 billion in cuts.
Future talks around budget priorities are expected to be tough as the administration’s goal is to cut spending and reduce deficits without damaging economic growth or gutting investments in education, research and development. The House and Senate continue to differ on budget priorities and spending reductions. Discussions around reductions currently blend dramatic cuts from almost every domestic agency and block taxpayer money from going to public broadcasting and Planned Parenthood family planning efforts. Money for food inspection, college aid, grants to local schools and police and fire departments, clean water projects, job training and housing subsidies are impacted.
The recent stopgap will keep the government running through March 18, however big spending questions wait resolution. For example, decisions need to be made about a House-passed bill (HR 1) that would fund the government through September 30. That measure would cut $62 billion in spending and would slash funds for implementation of the health care law.
February 28, 2011. With the temporary funding bill expiring this Friday at midnight, congressional Democrats and Republicans must reach an agreement with the White House to pass a budget bill or another funding extension before the Continuing Resolution (CR) runs out. On Friday, the House GOP leadership released details of a CR that will last two weeks so further talks on a bill to fund the government for the rest of this fiscal year can continue. The House plans to debate this legislation this week. The two sides may differ on the $100 billion in cuts, but it is likely the CR will include some savings.
February 21, 2011. Released last week, President Obama’s $3.73 trillion fiscal year 2012 budget proposal would institute a five-year freeze on overall non-security discretionary spending to reduce the deficit by more than $400 billion over the next decade. The budget includes 211 program terminations, reductions, and savings measures that would save more than $33 billion in fiscal year 2012. Under the budget proposal a number of agencies see their top line reduced from 2010 enacted levels.
The submission of the president’s budget request to Congress is just the first step of the federal budget process. The Senate and House Budget Committees must develop their own budget resolutions, which will lay out general spending limits and revenue targets for fiscal year 2012 and it is expected that Congress will be facing a high-stakes confrontation over spending, and a possible government shutdown.
House Republicans and Senate Democrats have different ideas about how to fund the government through Sept. 30, when the fiscal year ends. The House bill would cut funding by $61 billion, compared with fiscal year 2010, while Senate appropriators are writing legislation that would freeze discretionary spending at fiscal year 2010 levels.
If Congress does not clear a new spending measure or reach accord on a temporary spending bill by March 4, the nation would see the first government shutdown since the mid-1990s.
February 14, 2011. This week, President Obama will send his fiscal year 2012 budget request to Congress. It is expected the request will include eliminating billions of dollars in oil industry tax breaks, while reserving money for top clean-energy policy priorities. The budget comes as Republicans are looking for massive cuts in spending, unveiling a proposal this week to fund the government through the end of this fiscal year that would cut $100 billion in spending.
President Obama’s 2012 budget request will also make major budget cuts, freezing domestic spending for the next five years. While the President’s budget will be marked by cuts, the administration will make a series of investments in clean energy. For instance, more than $8 billion for clean energy programs, including money for research and development, in addition to a plan to make commercial buildings 20 percent more energy efficiency by 2020, and a plan to put 1 million electric vehicles on the road by 2015. Details of the budget proposal provided by the White House before its official release, showed the deficit rising to $1.645 trillion in fiscal 2011, then falling sharply to $1.101 trillion in 2012. This trend would trim the deficit to 3.2 percent by 2015 from 10.9 percent this year.
Resolution Calling for Constitutional Convention on Federal Balanced Budget Amendment. Last week, Governor Bob McDonnell sent down a resolution for consideration by the General Assembly that calls on the United States Congress to pass a balanced budget amendment to the U.S. Constitution. Carried by Delegate Ben Cline of Lexington, the resolution also requests a constitutional convention for adoption of a balanced budget amendment. According to Governor McDonnell, over the last two years the federal government has added approximately $3.37 trillion to the national debt, making the total national debt an unsustainable $14 trillion. The Governor feels that it is critical that Washington get its fiscal house in order and reduce spending to ensure the future prosperity and security of our great nation.
To view the full text of the resolution, visit the following address: http://www.governor.virginia.gov/News/viewRelease.cfm?id=602
February 8, 2011. The Congressional Budget Office (CBO) is predicting the federal government’s largest-ever budget deficit for the current fiscal year. CBO’s projection of a $1.48 trillion shortfall between what Washington will spend this year and how much it will take in is a stark reminder that the government’s budgetary imbalance is the top priority for good reason.
At almost 10 percent of gross domestic product, such a sizable deficit imposes a huge demand on the money available to be borrowed, and will require vast expenses to repay over time.
House Republicans are expected to kick off what is likely to be a monumental struggle over the federal budget with the announcement of the fiscal 2011 spending caps. House leaders have said they are aiming to make $55 billion to $60 billion in cuts, while a more conservative faction is pushing for $100 billion in cuts.
The atmosphere of austerity that has settled over Capitol Hill was underlined Feb. 1, when Senate Democrats promised to abandon the practice of earmarking money for special projects requested by members, matching similar vows from their Republican colleagues in both chambers. However, congressional Democrats and the Obama administration are unlikely to accede to the level of cuts Republicans are expected to propose, possibly making for a long fight ahead.
Senate Democrats eventually may be persuaded to agree to some cuts, especially with more than 20 members of their caucus seeking re-election in 2012.
Many Senate Republicans report they plan to examine the House measure carefully.
March 19, 2010. Last week, the House voted to eliminate earmarks (congressionally directed provisions that direct approved funds to be spent on specific projects). However, the Senate rejected the measure in a 68 to 29 vote. House Republicans have imposed a one year earmark ban and are encouraging their colleagues in the Senate to adopt their own earmark moratorium.
February 19, 2010. VCU is finalizing its FY 2011 appropriations requests for key federal priorities: Massey Cancer Center, simulation equipment for the new School of Medicine building and Multi-functional Oxide Materials research. We will be working with the offices of Senators Webb and Warner, and Congressmen Scott and Wittman.
February 5, 2010. On Monday, President Obama introduced a $3.8 trillion budget proposal for FY 2011. The proposal includes $49.7 billion for the Department of Education and $81.3 billion for the Department of Health and Human Services. Key higher education centered initiatives in the budget proposal include raising the maximum Pell Grant award to $5,710 and increase the funding available to Virginia students to $642.7 million. The introduced budget would also make it easier for low-income students to repay their loans by reducing monthly payments and allow students to have their remaining debt forgiven after 20 years.
The FY 2011 budget includes a $25.5 billion extension of Federal Medicaid Assistance Percentage (FMAP) funding for the states. The FMAP funding, which was increased in the 2009 American Recovery and Reinvestment Act and slated to expire in December 2010, would be extended until July 2011. Additional health related initiatives included in the budget center on increased funding for health centers providing primary and preventative care to underserved populations, increasing medical providers in underserved areas and expanding community health activities.
January 29, 2010. Due to the efforts of Senator Mark Warner and Congressmen Rob Wittman and Bobby Scott, Massey Cancer Center received $600,000 in the omnibus spending bill. In addition, VCU was appropriated $750,000 for a project in the School of Engineering for research on multi-functional oxides.
December 18, 2009. A $446.8 billion omnibus spending bill cleared Congress on Sunday with a Senate roll call vote of 57 to 35. The bill funds most domestic federal agencies, including Education and Health and Human Services, for the rest of this fiscal year (ending September 30, 2010). Both Virginia Senators Mark Warner and Jim Webb voted for the measure. The President signed the bill into law Wednesday evening.
The House voted 395 to 34 on Wednesday to approve a Defense Appropriations Bill for FY2010 which includes a measure to delay the 21% Medicare physician payment cuts until March 2010. The House has completed all of its scheduled legislative business and no additional votes are expected this year.
September 4, 2009. Senior Senators speculated this week that Congress will not pass all 12 spending bills before the end of the fiscal year on September 30th. The House has passed all of its appropriations bills, but the Senate has only approved four at this time. The Senate Labor-HHS appropriations legislation has not been heard. The appropriations bills will need to be reconciled in a House-Senate conference after the Senate approves the measures. Should Congress not pass the appropriations bills before October 1st, a continuing resolution will need to be passed to fund government operations.
July 31, 2009. It was announced this week that the VCU Health System was awarded $48,824 in ARRA funds to develop community-based, competitive employment opportunities for individuals with Asperger's syndrome and other Autism Spectrum Disorders (ASD).
July 24, 2009. The House passed the Labor-Health and Human Services Appropriations bill today with a vote of 264 Yeas – 153 Nays and 16 No Votes. $600,000 for Massey Cancer Center was included in this bill thanks to the support of Congressmen Scott and Wittman. The Senate Labor-Health and Human Services-Education Appropriations Subcommittee is scheduled to mark up its version of the bill on Tuesday, July 28.
July 10, 2009. I am pleased to report that $600,000 was included in the House Labor – HHS Appropriations bill for Massey Cancer Center. This bill was scheduled for mark-up this morning. We are working with our Congressional Delegation on making sure this money is included in the final versions in both the House and Senate.
May 29, 2009. We have been working with our Congressional Delegation over the past few months on appropriations requests for VCU's federal priorities. The Congressional offices submitted the following budget requests on behalf of VCU:
Senator Jim Webb
• $1,000,000 for Atlantic Rivers Institute
Senator Mark Warner
• $1,000,000 for Atlantic Rivers Institute
• $500,000 for Massey Cancer Center Vivarium
Representative Bobby Scott
• $1,000,000 for Atlantic Rivers Institute
• $1,000,000 for Massey Cancer Center Vivarium
Representative Rob Wittman
• $1,000,000 for Massey Cancer Center Vivarium
Representative Mary Jo Kilroy (OH)
Over the next month, staff of these offices will be working with budget committee staff on these requests. We will provide updates as the process progresses.
May 8, 2009. The Department of Health and Human Services released its proposed FY 2010 Budget in Brief this week. According to that document, the President's budget calls for an FY 2010 program level of $30.996 billion for the National Institutes of Health (NIH). This is an increase of $443 million (1.45% over the FY 2009 comparable, excluding American Recovery and Reinvestment Act (ARRA) funding. A summary of the President's budget for NIH can be found at NIH Office of Budget site.
In other budget news, for Title VII health professions training programs, the budget requests $265 million, a 19.4% increase over the FY 2009 omnibus. This funding level represents increases for most Title VII programs, as well as a substantial increase for state dental health improvement grants authorized under section 340G of the Public Health Service Act.
The budget also requests $263 million for the Title VIII nursing education programs, including an $88 million (237 percent) increase for the Nursing Education Loan Repayment Program. Additional details on program specific funding levels in the President's FY 2010 request to appropriated funding levels in FYs 2005-2009 can be seen here.
President's House 910W. Franklin Street
P.O. Box 842512
Richmond, Virginia 23284-2512
Phone: (804) 828-1235
Fax: (804) 828-1764