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Government Relations Update

August 2013

State and Federal Overview

Washington, D.C.:

  • Rice Owls land in D.C.
  • Federal funding update 
  • President Obama’s nomination for NSF director 
  • Student loan deal

Texas:

  • State funding update

STATE AND FEDERAL OVERVIEW

Congress has adjourned for the summer recess and will return Sept. 9 for a nine-day session to deal with a lot of unfinished business. History will be repeating itself as September is filled with looming deadlines. Congress will need to pass a funding bill by Oct. 1 to avoid a government shutdown. Later this fall, Congress also will need to pass an increase in the debt limit to prevent a default. Other important issues that will compete for limited floor, committee and debate time include comprehensive immigration reform, a defense authorization, the farm bill, corporate tax reform, all 12 appropriations bills and a handful of other items.

The prospects for accomplishing one of the items on that agenda grew darker last week due to the inability of the House and the Senate to pass the session’s first appropriation bill — Transportation, Housing and Urban Development. House leadership pulled the bill from the floor in a tacit acknowledgment that there were not enough votes for it to pass. The House bill would sustain sequestration-level reductions for these departments and would actually go beyond that to help offset proposed defense cuts envisioned under the Budget Control Act.

Increasing the debt limit will be an even larger and more difficult fight because of Republicans’ demands that any increase also include spending cuts of equal or larger value. Democrats counter that domestic spending has already been cut too drastically and that new tax revenues are needed. Congress and the president will take this debate to their constituents during the recess, but the prospects of any grand compromise appear unlikely until right up to the deadline. 

In Texas, the extended special session has officially concluded, and the third time turned out to be the charm. The last remaining item — HB 1 — soared through both chambers after being delayed multiple times throughout the summer. HB 1 is the enabling legislation for a constitutional amendment redirecting revenue from the Rainy Day Fund to the state’s dedicated highway fund. The Legislature is now adjourned until 2015 when the next regular session will convene, but only after Texas voters head to the polls in 2014 to elect a whole new slate of statewide officials. We will election updates as the races pick up steam.

WASHINGTON, D.C.

Rice Owls land in D.C.

Government Relations worked with the Association of Rice Alumni and Washington, D.C.-area alumni to host a reception for the newest cohort of Rice summer interns June 5 in the U.S. Capitol. Close to 100 people attended the reception to welcome the 24 interns. Working with our partners in D.C., we helped secure spots for Rice students with Sen. John Cornyn, the House Science and Technology Committee, Rep. Joaquin Castro, the U.S. Chamber of Commerce’s energy competitiveness department, the Department of Education and the National Science Foundation, to name just a few. The reception’s keynote speaker, Rep. Pete Olson ’85, encouraged Rice’s future leaders to make the most of their D.C. experience. Rice alumni in the area have scheduled a whole slate of events for the interns to attend throughout the summer. This was the third year for the welcome reception, which is gaining interest and participation from a growing number of local alumni.

Federal funding update

The vast differences between the House and Senate topline funding allocations for FY 2014 ($967 billion versus $1.058 trillion) have resulted in vastly different allocations for each of the 12 appropriations subcommittees. The House subcommittee allocations make security-related spending for defense, homeland security, veterans and law enforcement a priority. The president has indicated he would veto appropriation bills that have the $967 billion spending target set by the House.

The full House has passed four of the 12 appropriations bills so far this year. The House Appropriations Committee has completed committee action on all bills except the Labor Health and Human Services bill. The Senate failed last week to pass the Transportation, Housing and Urban Development bill after not security the 60-plus votes necessary to begin debate. The Senate Appropriations Committee has completed action on 10 of the 12 bills. The committee reported out its FY 2014 defense appropriations bill this week. 

Given the absence of an agreement on the final discretionary spending level for FY 2014, behind-the-scenes work on a short-term continuing resolution has begun. The measure will have to be in place by Sept. 30 and is likely to be based on the “current” rate of spending. The discretionary spending cap for FY 2013 is $1.043 trillion before sequestration and $988 billion after sequestration. The House is likely to insist on a formula that provides funding for the government at a rate of $967 billion, which is equivalent to the FY 2014 discretionary spending cap in the House budget resolution. The Senate’s position is unclear at the moment, although Senate Majority Leader Harry Reid has indicated that the $967 level is unacceptable. The initial continuing resolution is likely to last for 30 to 60 days. 

Determining the actual current rate of spending is not a straightforward exercise. The Budget Control Act does not specify how to construct a current rate for purposes of a continuing resolution. In addition, a determination of the actual current rate of spending, accomplished through either an Office of Management and Budget or Congressional Budget Office process, will not yield a result at either the $1.043 trillion pre-sequestration cap or the $988 billion post-sequestration cap due to numerous factors. In any case, there is no recent precedent for determining a current rate after the enactment of a full-year continuing resolution followed by sequestration, as we experienced in FY 2013. 

With the exception of a few agencies, we continue to see decrease in R&D funding across the board.  To see how the House and Senate funding levels currently impact research and development funding important to Rice, please visit the AAAS website for greater details:http://www.aaas.org/spp/rd/fy2014/total14c.pdf.

President Obama’s nomination for NSF director

President Obama has nominated France Córdova, former president of Purdue University, as the next director of the National Science Foundation (NSF). She is currently chair of the Board of Regents of the Smithsonian Institution and a member of the National Science Board, which oversees NSF. Córdova is also a former chancellor of the University of California at Riverside and chief scientist at NASA, and received a B.A. in English from Stanford University and a Ph.D. in physics from the California Institute of Technology. No stranger to Rice’s campus, she attended our weeklong celebration of the 50th anniversary of the Johnson Space Center and the university’s first half-century of formal NASA collaboration. To read more about the week-long events, visit http://news.rice.edu/2011/09/12/weeklong-rice-nasaversary-begins-sept-9/.

Student loan deal

The House approved the Bipartisan Student Loan Certainty Act of 2013 (S. 1334) July 31 and sent the measure to the president, who has signed the bill into law. The bill pegs the interest rate for federally subsidized and unsubsidized loans for undergraduates at the 10-year Treasury bond yield plus 2.05 percent, with rates for unsubsidized loans for graduate students at plus 3.6 percent and for parents at plus 4.6 percent. The rates will be capped at 8.25 percent for undergraduates, at 9.5 for graduate students and at 10.5 percent for parents. For undergraduates this fall, the loan rate will be 3.86 percent. 

The rates in the final bill are slightly higher than those in the tentative deal worked out by a bipartisan group of senators in early July, which had to be reworked when the Congressional Budget Office determined that it would cost the federal government $22 billion over 10 years. The new plan would save the government $715 million over 10 years.

To read more about the deal, visit http://www.nationaljournal.com/congress/senators-reach-deal-on-student-loan-rates-20130717.

TEXAS

State funding update 

The House and Senate reached a final budget agreement toward the end of the regular special session. Overall, the budget provides $94.6 billion in general revenue (GR) funding and $191 billion in total funding for the biennium. The GR figure represents an 8.3 percent increase over the current baseline, and total funding represents a 4 percent increase. 

Below is a snapshot of the funding levels for the programs relevant to Rice contained in Article III (Education) of the budget:

Program Item FY 2014FY 2015
B-On-Time Loan Program (BOT) $57,582,806 $54,382,895
Tuition Equalization Grants (TEG) $90,047,827 $90,047,827 
College Work-Study (CW-S) $9,404,639 $9,404,639
N Hackerman ARP (NHARP) $1,000,000 Unexpended Balance

The funding level for TEG represents a 6.7 percent increase over the last biennium, which partially makes up for the 20 percent reduction from the prior session.  The Hackerman Advanced Research Program received level funding from the last biennium, when the survival of the program was in doubt. The CW-S program received its highest ever funding level.