# President’s “Win the Future” FY12 Budget; Disarray on FY11 Continuing Resolution February 14, 2011 Today’s release of President Obama’s FY12 budget proposal and the continued wrangling in the House over completing action on FY11 funding underscored once again the dominance of deficit reduction on Washington’s policy landscape. While the situation remains fluid and continues to develop almost hour by hour, we wanted to provide you with a brief budget update and share some of the latest activity. **Also attached is a chart that details the funding levels proposed for specific programs of importance to Harvard in both the President’s FY12 budget and in the House FY11 bill.** We also wanted to remind you that some budget reporting has been confusing because the Congress is grappling simultaneously with funding for FY 11, which is still pending half way through the fiscal year, and FY 12 deliberations, which started today with the President’s budget submission. As the details of the President’s budget come out in the press in next the 24 hours, the House and Senate will continue to struggle with the FY 11 budget and the focus there on the $100 billion in cuts the House has proposed and how the Senate will respond. **President’s Budget Request (PBR):** As detailed below, the President’s budget makes good on his State of the Union commitment to prioritize funding in key investments while keeping the overall budget flat through hard cuts elsewhere. Education is a big winner, with increases in K-12 education and Pell grants bumping up departmental funding by over $13 billion. Research agencies also see additional funding, although mostly at modest levels. • NIH grows by more than $800 million or 2.7%. • NSF increases nearly $900 million or 13%. • Energy’s Office of Science sees an increase of over $500 million or 10.4%. • The Pell maximum is stabilized at $5550, although this is accomplished through the elimination of summer Pell grants and with a proposal to eliminate the in-school student loan interest subsidy for graduate and professional students. • Several small aid programs are eliminated, including Javits Fellowships, Byrd Honors Scholars, and LEAP (Leveraging Education Assistance Program). Overall, his proposal has been greeted skeptically today from both ends of the ideological spectrum. Many believe the cuts are inadequate to address the deficit, avoiding the major recommendations of the bipartisan deficit reduction commission. Others are concerned some of the cuts to key safety net programs (such as low income heating assistance and community assistance programs) will fall too hard on the most vulnerable. However, this reaction is not unlike what one sees every year, as the President's budget is a statement of his priorities – rarely a mirror-image of either party on the Hill. Congressional budget committees will begin hearings this week on the President’s proposals and the process of putting together the Congressional budget resolution. While both chambers are expecting to complete theirrespective budgetsthisspring, itseems unlikely they will come to agreement and adopt a common outline forthe appropriations process. **FY11 Funding:** Against this backdrop, uncertainty continues around federal funding for the current year. Because Congress did not pass any of the 12 annual appropriations bills last year, all agencies of the federal government are currently being funded at last year’s levels under a Continuing Resolution (CR) enacted last December and scheduled to expire March 4. The House majority is moving forward a proposal to fund the seven remaining months of the fiscal year at significantly reduced levels. The challenge of turning political rhetoric into actual policy became obvious last week when Republican leaders in the House attempted to produce a budget package for the remainder of FY11 that was at once politically balanced, potentially sellable to the Senate, and satisfactory to the conservative faction that ran on cutting $100 billion in the current budget. Faced with the difficult task of identifying such savings with half the year already gone, the leadership chose to "pro-rate" the savings and satisfies the pledge with $32 billion in cuts for the remainder of the fiscal year. This strategy was publicly rebuked by the rank-and-file as not aggressive enough and sent the Appropriations Committee chairman back to the drawing board to find $60 billion more in savings. Several leading agencies have been slated for elimination including AmeriCorps and the Corporation for Public Broadcasting; and others are slated for major cuts, including Head Start, the CDC, student aid, special education, food safety, the EPA, mass transit, worker training and foreign aid. Many programs of direct interest to Harvard and higher education are implicated. The Pell grant maximum for the next academic year would fall $845 to $4705 and several other undergraduate grant programs would be entirely eliminated. Energy’s Office of Science would be cut nearly 20%; NIH’s funding is rolled back nearly to 2008 levels; and NSF, while not hit as deeply, would be pared back by over $300 million. The bill is expected on the House floor tomorrow. It will be open to amendment but, because of new rules adopted by the Congress, amendments to add funding are almost impossible because new dollars cannot be added to the bill and in general funds cannot be transferred across agencies. It is expected the House will have the votes to pass this measure, with the likely addition of more cuts. Although the House bill is grim, this is in no way the end of the process. Democratic appropriators and leaders in both the House and the Senate issued statements strongly opposing these cuts and arguing they are wrong for the economy, for job creation, needy citizens and vital government functions. However, congressional Democrats and the Administration have made clear that they are willing to consider reasonable proposals to cut federal spending as a way forward on completing FY11 funding. With the Congress heading into a recess week for President’s Day, these issues will come to a head the week of February 28. With the CR expiring on March 4, there will be little time to negotiate. At this point, it appears likely another short-term CR will be adopted. However, there is the chance of a government shutdown given the over-heated posturing on spending and cuts. Given Harvard’s participation in federal programs (both research and education), we remain very engaged in these funding issues—especially through our continued robust partnership and collaboration with peer institutions and advocacy coalitions across the sciences and in education. We will stay in touch as these issues continue to develop. Please feel free to be in touch with Suzanne Day or Jon Groteboer in Harvard’s Washington office (at 202 863‐1292) should you have questions or concerns. See also:- [ Budget and Appropriations ](/issues/budget-appropriations) Share on:- [ Facebook ](#) - [ Twitter ](#) - [ Linkedin ](#)