September 23rd, 2011 | View Archive
PRESIDENT OBAMA RELEASES JOBS BILL
Two weeks ago, President Obama released the American Jobs Act which includes $253 billion in tax cuts and $194 billion in spending.
The tax cuts include $175 billion for an extension of last year's employee payroll–tax cut, $65 billion to cut employers' payroll taxes in half, and $5 billion for a bonus payroll tax cut for new hires. Under his plan, taxes would be halved on the first $5 million in wages.
The new spending would include tax credits for companies hiring veterans, aid to state and local governments to prevent the layoffs of police, firefighters and teachers, the modernization of public schools, and a $10 billion infrastructure bank to help modernize roads, bridges, railroads and airports.
As battles in Congress continue over tax provisions, the Presidents bill is unlikely to pass in current form but rather be voted on in piecemeal agreements on minor provisions. As Congress heads toward a one-week recess at the end of September, action on jobs provisions appears likely to stretch into December.
The American Jobs Act can be viewed here: (http://www.whitehouse.gov/the-press-office/2011/09/12/message-president-congress-sectional-analysis-and-text-american-jobs-act)
THE PRESIDENT'S DEFICIT REDUCTION PLAN RELEASED
On Monday, President Obama unveiled his deficit reduction plan to reduce the federal deficit by $3 trillion over the next decade. The plan is intended to pay for the President's jobs bill released last week and give direction to the joint committee on deficit reduction which is charged with finding at least $1.2 trillion in budget savings by November 23.
The plan is set to reduce the deficit by overhauling the tax code and reforming entitlement programs. Contained in the bill is a $580 billion reduction in mandatory spending programs, including $248 billion from Medicare and $72 billion from Medicaid and other health-related spending. Of particular interest to the campuses with medical schools, the plan includes a cut of 10 percent to Indirect Medical Education (IME) add-on payments to teaching hospitals beginning in 2013
The bill also contains two major tax provisions that will affect the University community. The more familiar provision is the one that caps the tax deduction for charitable donations for individuals earning more than $200,000 and families earning more than $250,000. The second is one that would limit the tax-exempt interest exclusion for all municipal bonds. Universities mainly use such bonds to fund many building projects on campus.
The President's proposal has little chance of becoming law unless Republican lawmakers bend. But by focusing on the wealthiest Americans, the president is sharpening the contrast between Republicans and Democrats. In laying out his proposal, aides said, Mr. Obama expressly promised to veto any legislation that sought to cut the deficit through spending cuts alone and did not include revenue increases in the form of tax increases on the wealthy.
The Deficit Reduction Plan can be viewed here: http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/jointcommitteereport.pdf
Speaker Boehner's full remarks on the deficit plan can be viewed here: at: http://www.speaker.gov/News/DocumentSingle.aspx?DocumentID=260229
SENATE APPROPRIATIONS COMMITTEE APPROVES LABOR-HHS-EDUCATION FUNDING
This week, the Senate Appropriations Committee approved an FY 2012 spending plan for Labor, Health and Human Services, and Education. Contained in the bill is a measure that would maintain the maximum Pell Grant award at $5,550 for the 2012-13 academic year by ending the government interest subsidy for undergraduate borrowers during the six-month grace period after they leave school. The appropriations bill additionally preserves FY 2011 funding levels for Supplemental Education Opportunity Grants, the Federal Work Study Program and the TRIO Programs. The appropriations bill would allocate a total of $68.4 billion for the Department of Education for FY 2012, an $80 million increase from 2011.
NIH would be funded at $30.5 billion, a cut of $190 million from FY 2011. Contained in the bill is the creation of the National Center for Advancing Translational Sciences (NCATS) within NIH, designed to transform the way NIH pursues the translation of basic science into treatments and cures. A new program within NCATS — the Cures Acceleration Network [CAN] — will help speed the translation and application of discoveries that have shown signs of success at the laboratory level but have not advanced far enough to attract significant investments from the private sector. CAN, for which the Committee provides $20,000,000, will make grants to biotech companies, universities, and patient advocacy groups, and will also help facilitate FDA review for the high-need cures that are funded by this initiative. All of the other changes involved with the restructuring of the National Center for Research Resources (NCRR) are budget neutral.
Prospects for the Senate measure are uncertain. The House has approved six of the 12 bills needed, but the Senate has not considered any of the measures passed by the House. The House Appropriations Committee has already cancelled markups on the Labor-HHS-Education funding bill, and it is widely believed that there will not be any further effort to move that bill through the House.
A continuing resolution (CR) which would have kept the government funded through Nov. 18 passed the House of Representatives Thursday evening but failed in the Senate today. A CR will be needed to keep the government running after Sept. 30, the end of FY 2011.
A summary of the bill can be viewed here: http://www.appropriations.senate.gov/news.cfm?method=news.view&id=498a6a47-e7fa-4a08-bed3-f9059869dfd2
DISTANCE EDUCATION EXPANSION FOR SERVICE MEMBERS
The Defense Department is intensifying its oversight of online education, amid growing Congressional scrutiny of its tuition-benefit program.
The tuition-assistance program provides active-duty service members with up to $250 per credit hour, for a maximum of $4,500 per year. The 18 largest for-profit colleges received $175-million from Defense Department educational programs in 2010, according to a recent report by the Senate education committee.
Beginning in January, the department will require an independent, third-party review for any distance education program receiving tuition-assistance benefits. The department announced its new policy in March, two weeks after the Government Accountability Office released a report that found major gaps in the Defense Department's oversight of the program.
The report by the Senate education committee can be viewed here: http://harkin.senate.gov/documents/pdf/4d01011f6076e.pdf
The report by the Government Accountability Office can be viewed here: http://www.gao.gov/new.items/d11300.pdf
ACTIVITIES OF THE JOINT COMMITTEE ON DEFICIT REDUCTION
The Joint Committee on Deficit Reduction held its first meetings recently in order to move forward on recommending $1.5 trillion in cuts over 10 years. Although the Committee's members are expressing near unanimous support for overhauling the tax code, the dozen lawmakers have considerably different ideas over how to make those revisions.
This week, a group of more than 130 university presidents and chancellors wrote to the Committee encouraging members to reach an agreement that reduces budget deficits and creates economic and job growth. The letter, led by AAU and APLU urges members of the committee to reach "a big agreement – not incremental steps" while working to close the nation's budget deficit.
The press release by AAU/APLU can be viewed here: http://www.aau.edu/WorkArea/DownloadAsset.aspx?id=12630
TEXAS DEMOCRATS ASK CMS TO DENY STATE MEDICAID WAIVER
Late last week, the Centers for Medicare and Medicaid Services (CMS) gave a tentative thumbs up to Texas' application for a section 1115 Medicaid waiver. The CMS sent Texas officials a letter outlining its desire to continue to work on the issue. CMS hopes to make a final decision later this fall.
The Texas plan would expand Medicaid managed care across the state and create funding pools to finance hospital infrastructure and quality improvement programs. The new funding pools are essentially a workaround to keep money flowing to hospitals that would otherwise be canceled out by the managed-care expansion. Hospitals have expressed concern over whether the proposal would meet approval at the federal level.
The Texas Health and Human Services Commission had initially sought approval by Sept. 1, to quell hospitals' concerns before an initial managed care expansion began on that date. The proposal, according to Texas' initial request, will "help transform the current delivery of care and payment systems in Texas to a system that is more transparent, accountable, and ready to serve newly insured individuals who would enroll in Medicaid or federally subsidized insurance under current law starting in 2014." That's a reference to the 2010 federal health law, which Texas is also suing in federal court to block, an effort joined by 25 other states.
On Thursday, nine Texas House Democrats sent a letter to CMS opposing the state's current request that Medicaid beneficiaries get their prescription drugs through managed care plans. The letter can be found here. The delegation fears that approving Texas' proposal "could force small Texas pharmacies to close and seriously endanger patient access to vital prescription drugs."
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