DC Digest - June 8, 2012
In Today's Issue:
- Senators Coburn, Burr Introduce 'Comprehensive Student Loan Protection Act'
- Senator Reid Offers New Plan for Postponing Student Loan Rate Increase
- House Approves FY13 Energy and Water Funding Bill
- Senators Introduce AOTC Reauthorization Bill
- OMP and OSTP Issue Memorandum on S&T Priorities in FY14 Budget
SENATORS COBURN, BURR INTRODUCE 'COMPREHENSIVE STUDENT LOAN PROTECTION ACT'
U.S. Senators Tom Coburn, M.D. (R-OK) and Richard Burr (R-NC) last week introduced the Comprehensive Student Loan Protection Act (S.3266), a bill to provide a long-term fix to the interest rate on subsidized student loans by changing the structure for all new federal student loans first disbursed after July 1, 2012, to become a fixed-variable rate. It requires the applicable rate of interest for student loans to be equal to the bond equivalent rate of 10-year Treasury bills auctioned at final auction prior to June 1st plus 3 percent. Lastly, it directs any remaining savings left over to be sent to the Treasury for the purpose of debt reduction.
Burr and Coburn's student loan interest rate reform bill is based on a proposal put forth last month by Jason Delisle, director of the Federal Education Budget Project at the New America Foundation.
Senators' Student Loan Interest Rate Bill Based on New America Proposal (NewAmerica.net)
Senators Coburn, Burr Introduce the "Comprehensive Student Loan Protection Act" (Burr.Senate.gov)
SENATOR REID OFFERS NEW PLAN FOR POSTPONING STUDENT LOAN RATE INCREASE
Republicans seem open to considering a new proposal by Senate Majority Leader Harry Reid (D-NV) to pay for the cost of postponing the doubling of student loan interest rates on July 1, reported CQ.com on Friday.
Senator Reid sent a letter on June 7 to Republican leaders proposing to pay for the measure by using some of the proceeds that would come from a change to rules for contributions to employer pension funds and an increase in employer premiums for the insurance provided by the Pension Benefit Guaranty Corporation. The two proposals would generate a total of $17.5 billion, reports CQ.com, which Senator Reid says would cover costs of both the one-year extension of the current 3.4-percent interest rate on subsidized student loans and the pending reauthorization of the surface transportation programs.
The issue has been at an impasse. The House on April 27 approved a measure (H.R. 4628) that would cover the one-year, $6 billion cost of extending the current interest rate by eliminating funding for a preventive health care fund in the Affordable Care Act. The Senate last month fell short of the 60 votes needed to pass a Democratic bill (S. 2343) that would have paid for the cost by eliminating a tax preference for certain small corporations. During consideration of that bill, the Senate also rejected a Republican amendment that matched the language of the House-passed bill.
HOUSE APPROVES FY13 ENERGY AND WATER FUNDING BILL
The House of Representatives approved its version of the FY13 Energy and Water appropriations bill (HR 5325) on June 6 by a vote of 255 to 165. The measure would fund the Department of Energy (DOE) Office of Science at $4.8 billion, which the committee report says is $72 million below the FY12 level and $191 million below the President’s FY13 request. The Advanced Research Projects Agency-Energy (ARPA-E) would receive $200 million in the House bill, which is $75 million below FY12 and $150 million below the President’s FY13 request.
The FY13 Energy and Water bill approved by the Senate Appropriations Committee would fund the DOE Office of Science at $4.9 billion, which the committee press release says is $35 million above the FY12 level, and ARPA-E at $312 million, which is $37 million above the FY12 level.
SENATORS INTRODUCE AOTC REAUTHORIZATION BILL
Three Democratic Senators introduced legislation on June 6 that would consolidate and permanently reauthorize several higher education tax benefits, including the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC). The six presidentially based higher education associations immediately endorsed the measure, the AOTC Permanence and Consolidation Act (S. 3267), in a letter to the three Senators the same day.
The bill, introduced by Senator Charles Schumer (D-NY) and co-sponsored by Senators John Kerry (D-MA) and Robert Menendez (D-NJ), would:
• Eliminate the need for two separate credits (AOTC and LLC) by creating a bifurcated credit: one for students enrolled at least half-time and one for students enrolled less-than-half-time.
• Increase the maximum credit to $3,000 (from $2,500 in AOTC/$2,000 in LLC) and make the credit permanent.
• Change the income phase-out. The current phase-out begins at $80,000/$160,000 and reaches zero at $90,000/$180,000; the new AOTC would begin its phase-out at the same place but end at $100,000/$200,000.
• Change lifetime limits from the number of years claimed (four years in the current AOTC) to the maximum monetary amount claimed ($15,000).
• Maintain the 40-percent refundability in the current AOTC.
Higher Ed Associations Endorse S. 3267 (pdf)
OMB AND OSTP ISSUE MEMORANDUM ON S&T PRIORITIES IN THE FY14 BUDGET
The White House Office of Management and Budget (OMB) and the Office of Science and Technology Policy (OSTP) issued a memorandum to federal agencies on June 6 outlining the Administration’s science and technology priorities for the FY14 budget.
The memorandum addresses broad goals and says, “Because of the crucial government role in supporting research, in general agencies should give priority to funding for research above funding for development activities.”
Memorandum for the Heads of Executive Departments and Agencies (whitehouse.gov)