AASCU Update

To:       AASCU Presidents, Chancellors and Government Relations staff

From:   Ed Elmendorf, Senior Vice President of Government Relations and Policy Analysis
           Makese Motley, Assistant Director of Federal Relations and Policy Analysis

Re:       Federal Budget

Date:    10/17/2013


Late last night, the United States Senate and House of Representatives approved the bipartisan agreement negotiated by the Majority and Minority Leaders of the Senate to reopen the federal government and avoid a default on the nation’s debt. The last-minute deal will fund the government through January 15^th, 2014, raise the debt ceiling through February 7^th, 2014, and does not contain any of the policy demands from the House Majority that led to the shutdown in the first place. President Obama signed the bill early this morning.

Here’s the basic framework of the agreement:

• The federal government is funded through January 15 at sequestration levels.
  
• The debt limit is suspended until February 7 (the debt limit is whatever the actual level of debt is on that day)
  
• A budget conference was established to come up with long-term spending plans by December 13, 2013. Senator Patty Murray (D-WA) and Representative Paul Ryan (R-WI) will be the conference committee leaders. This committee is set up to find a budget agreement.
• Income verification is required for recipients of subsidies under the Affordable Care Act’s newly-established exchanges.
• Back pay is awarded to furloughed federal workers
• A provision that requires a proactive vote to disapprove extending the debt limit is now in place.
  

What is not in the agreement:

• No flexibility in how government agencies make budget cuts to their programs, as they are required to under sequestration.
• No repeal of the “extraordinary measures” provision that allows the Treasury to do accounting tricks to avoid default post February 7.
• No ‘Vitter Amendment‘ that would have taken away employer contributions from the health plans of Congressional staff.
• No provisions related to birth control access.
• No repeal or delay of the medical device tax. 
• No repeal or delay of the reinsurance tax. 
• No repeal, replacement, or delay of any aspects of the Affordable Care Act’s exchanges or individual mandate.
  

The budget deal preserves the sequester caps through January. Many outside groups in the education and defense industry have been lobbying hard to get the caps removed. We believe that the upcoming conference could be the last real opportunity to get the sequester caps removed. Many Republicans with strong ties to the defense industries along with many education advocates have pushed hard for the removal of caps.  As more details of the budget agreement and conference emerge AASCU will keep you abreast of any changes that directly impact higher education.