Federal Update: September Outlook in Washington

With attention focused on the White House and the upcoming November midterm elections, Congress made notable progress this summer on FY19 funding measures but returns this week to a busy and likely contentious fall session. Members will be working against several major deadlines: the start of the new fiscal year October 1, which will drive attention to appropriations, and the start of the fall Supreme Court term also on October 1, which conservatives are eying as a deadline for confirmation of nominee Brett Kavanaugh. In addition, Congress and the Administration will increasingly be focused on the midterms with majorities in the House and Senate hanging in the balance. While we will have to wait until November for clarity on who controls Capitol Hill, we know now that there will be a lot of new faces in the next Congress, given near record Republican retirements, a well as turnover on the Democratic side – including last night in Massachusetts, where Boston City Councilwoman Ayanna Pressley defeated 10-term Representative Michael Capuano in a district that includes Allston and Longwood.Ahead of this busy fall, below is an update on University priorities, with a focus on federal funding where there is significant progress and some gains to report.

FY19 Appropriations

After an unusually productive summer, lawmakers return with the majority of the 12 appropriations bills having passed one or both houses, although each still needs to be reconciled and completed before going to the President for signature. Momentum on FY19 began with an earlier bipartisan budget deal that set topline funding at a level slightly above FY18. This modest increase allows appropriators to use previously approved funding levels as the foundation for their bills and to augment funding in priority areas.

Unexpectedly the Senate has outpaced the House both in passing appropriations bill but also in passing them by strong bipartisan margins. Thus far, the Senate has passed nine of the 12 funding bills. This pace is due to a bipartisan agreement reached by appropriations leaders and now adopted by most members to avoid poison-pill policy riders on funding bills and to focus on spending levels. The House has taken an opposite approach by drafting partisan bills, passing six to date, all with fairly one-sided votes.

Research accounts have fared well so far in all the bills, both House and Senate. The Senate’s Defense appropriations bill would dramatically increase funding for DOD basic research (+19.4%) and DARPA (+12.2%). And both chambers increased funding for NIH, with the House adding $1.5 billion and the Senate adding $2 billion. Support for the Department of Energy’s Office of Science also continued after last year’s surprise increase, with the research office gaining 5.4% in the House and 6.2% in the Senate. Student aid accounts are generally flat, although the Senate bill provides a $100 increase in the Pell maximum grant. A full chart of priority accounts is below.

In terms of policy provisions, both chambers continued the prohibition on the Administration changing facilities and administrative reimbursement rates at NIH. While the Senate honored its agreement to avoid controversial policy provisions, the House moved ahead with several familiar poison-pill riders, including restrictions on fetal-tissue research as well as other controversial environmental, health, and other provisions.

Where both chambers have approved bills, members have been meeting to finalize legislation, hoping to avoid a showdown with the President. Last year, President Trump expressed significant frustration about the numerous Continuing Resolutions (CRs) and the final government-wide omnibus FY18 funding bill that he was forced to sign to avoid a government shutdown. Members hope that real progress this month will defuse his concerns and keep the government operating. A compromise version of the Energy-Water, Military Construction-VA, and Legislative Branch appropriations package could be reached this week with approval anticipated soon thereafter, which would leave nine bills outstanding with dwindling time before the new fiscal year. This time crunch will likely require a CR—its duration depending entirely on how much Congress is able to finalize this month or come close to finalizing by the September 30 deadline. Members, especially the dozens facing difficult elections in the House, will be eager to adjourn to allow for more time on the campaign trail, which could either facilitate a broader deal or force Congress to punt decisions to the lame-duck session.

Other Issues

As with funding, Congress has pushed to make progress in some must-do policy areas ahead of the midterms. Most notably, Congress completed the annual National Defense Authorization Act, which sets policy for the Department of Defense. With concerns about Chinese economic and security threats in US research labs, several provisions were included in the legislation that prohibit sourcing from certain Chinese companies (with implementation over the next two years), restrict funding for certain programs at schools housing Confucius Institutes, and create a new forum for universities and the Pentagon to work together to protect sensitive research and prevent spying and theft.

In other areas, political activity has stymied progress. In both houses, there were efforts to take up immigration reform with a key goal of resolving the issues around DREAMers and the DACA program, but majorities in both houses were insufficient to move legislation forward. Unless prompted by a major decision from the courts, Congressional leadership has shelved these issues until after the midterms when the politics as well as the makeup of the House and Senate will have shifted. At some point this year, the Congress will have to confront the President’s insistence on a funding for a border wall; however, Republican leadership seems to have convinced the White House to put off that dispute until the lame duck session that will follow the midterms.

Higher education legislation has also fallen by the wayside. The effort to rewrite the Higher Education Act this year derailed in the House with the very partisan and damaging PROSPER draft that would have cut $15 billion from student aid. In the Senate, bipartisan efforts to craft a bill fell apart over disagreements on student loan policy, simplification and potentially weakening of institutional accountability and consumer protection measures.

It may be, even in the midst of a fall dominated by politics, that some progress on relatively non-controversial issues may be possible. For example, different versions of legislation intended to coordinate and advance federally-funded quantum science has been approved by committees in both the House and Senate, and is likely to be considered in one more committee. Overall, the legislation would establish a new office, to be led by OSTP, that would coordinate quantum research activities across federal agencies and authorize – though not appropriate – new multidisciplinary centers and consortia, to be funded by NSF, DOE and NIST. To date, the legislation has progressed relatively quickly, has bipartisan support, and could be finalized and agreed to in the lame duck.

Looking Ahead

As Congress works through these issues and moves forward on FY19 funding, we will remain closely engaged and keep you up to date with the latest significant developments. If you have any questions or concerns, please feel free to reach out to Suzanne Day (suzanne_day@harvard.edu) or Jon Groteboer (jon_groteboer@harvard.edu) in the DC office.