President Introduces FY13 Budget Proposal
The White House today released the President’s budget request for the 2013 fiscal year, which begins on October 1. Although non-binding on the Congress, the President’s budget is significant because it kicks off the budget process and sets the political table by laying out the Administration’s priorities for the coming year and provides greater detail to initiatives outlined in his January State of the Union address. In analyzing the President’s priorities, of particular interest to the Harvard community is the budget’s prioritization of research and support for students because, in a continuingly austere fiscal environment, starting from a favorable position will be key as the overall budget will likely represent the high water mark as the process unfolds. In the coming days, we will also be looking closely for additional clarity on the President’s student aid proposals as they relate to college costs.
The Budget Year Ahead:
Overall, this budget attempts to portray the President as a responsible fiscal steward, identifying revenue increases and entitlement cuts that lower the deficit, reduce federal debt and meet the Budget Control Act targets (obviating the need for a sequester). Within that context, the proposal manages to champion targeted investments like the overall $141 billion (a 5% increase) proposed for research and development. This is welcome, though not a surprise, as science-sponsoring agencies have enjoyed strong support from the Administration in each of its three previous proposals. On the heels of a contentious FY12 funding agreement that ultimately demonstrated a bipartisan reservoir of support for university-based research, the President’s proposals offer continued momentum.
However, with the politics of a presidential election and congressional elections that determine party control of the House and Senate, we expect the year ahead to be heavy in political posturing and light on outcomes until voters go to the polls in November. Congress has already acknowledged as much by scheduling a post-election lame duck session where many of the budget issues will come to a head. The sequester, ordered for January 2013 as a result of the “Supercommittee’s” failure to identify $1.2 billion in savings over the next decade, is likely to be a magnet for politics throughout the year. Fiscal conservatives of both parties indicate an interest in early implementation, pulling the savings required into current funding bills, in order to demonstrate their budgetary responsibility. Others will seek to protect particular programs, like the Department of Defense, NIH, Medicare or other favorites from the mechanical, across-the-board, application of sequestration. Furthermore, a number of additional big ticket budget items will be facing end-of-year deadlines, including: expiration of the Bush tax cuts, the patch shielding the middle class from the AMT, and other tax extenders, as well as the necessity of another debt ceiling increase. No doubt, all these issues will continue to roil throughout the year as Members of Congress seek the political upper hand.
President’s Budget Request (PBR):
Within the political framework discussed above, the FY13 budget proposal works to protect priorities while registering in at $3 billion below FY11 levels, as required under the Budget Control Act. Encouragingly, key priorities include research and higher education. While NIH receives no increase over last year’s levels, the budget continues to take strides toward a multi-year goal of doubling funding for NSF, DOE’s Office of Science, and NIST, proposing a combined increase of $13.1 billion for the three agencies. NASA is the unfortunate exception, as science funding suffers under a decreased agency budget. Of all the research agencies, NIH enjoys the broadest range of support on the Hill and, therefore, we will work secure a possible increase along with the other key agencies in any end-of-year budget agreement. Some highlights are included below along with a more detailed chart that outlines funding proposed for numerous federal programs with strong participation at Harvard:
- NIH would be level-funded at $31 billion and commits greater resources to Alzheimer’s research and the translation of discoveries into clinical trials. In addition, the budget overview makes reference to changes in “grant management” to increase the number of grants by 7%.
- NSF would receive $7.4 billion, an increase of $340 million or 4.8%
- DOD’s basic research account would receive a slight increase of $2 million, or 0.1%
- DOE’s Office of Science would receive $5 billion, an increase of 2.3%
- NASA Science would receive $4.9 billion, a decrease of 3.2%
On the student aid front, the request supports the scheduled inflationary increase in the Pell grant maximum to $5635, increases funding for Work Study, identifies funding to delay for a year the doubling of the undergraduate student loan interest rate, and expands the Perkins Loan program. The budget includes few new details on the President’s recently announced college affordability initiative which proposes to tie a college or university’s campus-based aid funding to net tuition changes.
Contact
Harvard Federal Relations staff closely follows budget and other issues of interest to the University as they come up in Washington. If you have any questions related to our advocacy efforts, please feel free to be in touch with Suzanne Day or Jon Groteboer in Harvard’s Washington office at (202) 863-1292.