May 2010 Update

OFFICE OF GOVERNMENT RELATIONS
Legislation and Policy Report
May, 2010

WASHINGTON, D.C. –  President Barack Obama nominated Elena Kagan, Solicitor General, to the U. S. Supreme Court. If confirmed by the Senate, Ms. Kagan will succeed Justice John Paul Stevens, who announced his retirement. Congress had a full agenda during the month of May, addressing legislation focused on financial regulatory system overhaul, reauthorization of the America COMPETES Act, and agreeing on a FY2011 budget resolution. Additionally, House Majority Leader Steny Hoyer (D-MD) expected the House to pass the tax and benefit program extension and an FY2010 war supplemental appropriations measure by Memorial Day.   

The President's Council on Science and Technology (PCAST) met on May 21. The Council's agenda included updates on the Advanced Research Projects Agency-Energy (ARPA-E), National Oceanic and Atmospheric Administration (NOAA), the U. S. Geological Survey and a discussion on PCAST reports.

The Congressional Joint Economic Committee issued a report focusing on the importance of the federal investment in basic research. The Pivotal Role of Government Investment in Basic Research report states, "Increased federal funding for basic research may be warranted. Even though the federal government has stepped in to make up for the private sector's underinvestment in R&D, overall R&D spending may still be too low. One study estimated that R&D expenditures may be less than half of the optimal level. Underinvestment in basic research may be greater than that, since basic research can have a much larger impact than applied research or development..." View the report

1. Appropriations and Budget: FY2010 Supplemental – The Senate approved a $59 billion FY2010 supplemental funding bill (H.R. 4899) to support the wars in Iraq and Afghanistan. The bill includes funding for current and future disasters, including the oil spill in the Gulf of Mexico. The measure does not include funding for the Pell Grant shortfall, which was requested by several higher education associations, nor does it include Senator Tom Harkin's (D-IA) $23 billion education jobs bill, S. 3206.  

In the House, Appropriations Committee Chairman David Obey (D-WI), postponed a mark-up of his $84 billion supplemental spending measure, which includes both the education jobs package and funding for the Pell Grant shortfall. Capitol Hill sources indicated that the postponement likely reflects concerns of House moderates and fiscal conservatives in both parties about the increasing reliance on borrowed money.

FY2011 budget resolution– House Democrats continue efforts to reach an overall discretionary spending level for the FY2011 budget resolution. It has been reported by Congress Daily that members of the conservative Blue Dog Coalition continue to push for a two-percent annual cut in non-security discretionary spending for three years, with a freeze for another two. Liberal Democrats oppose those cuts as damaging programs important to constituents. A less comprehensive deeming resolution, which acts as a proxy resolution that allows the chamber to move forward on the budget and set discretionary spending levels, is under consideration.

The Senate Budget Committee approved its version of the FY2011 budget resolution on April 22, accommodating the President's FY2011 requests for defense, homeland security and veterans programs, but proposing a cut of $4 billion below the President's planned freeze on non-security discretionary spending. The proposed reduction would be taken from the State Department.

Senate Democrats had hoped the chamber could approve the budget resolution before the Memorial Day recess, but they may not take the measure to the floor if House Democrats decide not to move their own version. Congress can take up the FY2011 appropriations bills without a budget resolution, but it cannot use the reconciliation process. Reconciliation allows measures affecting taxes and mandatory spending to pass the Senate with a majority vote, rather than the 60 votes needed to overcome a filibuster.

Coburn legislation on earmarks– Senator Tom Coburn (R-OK) introduced bipartisan legislation to create a centralized, publicly available database on all "congressionally directed spending items," including earmarks in appropriation and authorization bills. The main difference between the bill and other transparency-in-earmark proposals is that his bill would include all earmark requests regardless of whether the earmark is submitted into legislation and funded through appropriations.

2. Higher Education: Student aid– The Student Aid Alliance sent two letters to Capitol Hill urging added funding for federal student aid programs in the FY2011 budget. The letters noted that pressure on federal student aid programs has increased significantly as a result of the economic downturn, with workers returning to college to improve their skills and families struggling to keep their students in college.

The first letter urges Congress to cover the current $5.5 billion Pell Grant shortfall through an FY2010 supplemental appropriations measure rather than the FY2011 Labor/HHS/Education appropriations bill. Without supplemental FY10 funds, according to the letter, appropriators in FY2011 will have to pay for the shortfall by reducing FY2011 funding for other programs or reducing the Pell Grant maximum award from the $5,550 promised by Congress to $2,840. The second letter requests significant funding increases for federal student aid programs in FY2011, providing detailed recommendations for eight major aid programs.

Additional aid to K-12 and public colleges/universities– Senator Tom Harkin (D-IA) introduced S. 3206, Keep our Educators Working Act, which would provide $23 billion in emergency funding to prevent layoffs at public schools and public institutions of higher education in the wake of the states' crippling budget shortfalls. The funds would support compensation, benefits, and other expenses needed to retain existing employees and hire new ones at public educational institutions. The legislation is modeled on the State Fiscal Stabilization Fund that was established under the American Recovery and Reinvestment Act. The majority of the funds would be awarded to states through a formula that considers each state's share of individuals age five through 24, and each state's share of the nation's total population.

Congressional Budget Office report on tax-exempt bonds– The Congressional Budget Office (CBO) has released a report commissioned by Senator Charles Grassley (R-IA), ranking member of the Senate Finance Committee. The report suggests that universities are issuing tax-exempt bonds for facilities and other capital projects that they could afford to finance without the federal subsidy. The report states that this practice enables institutions to hold other tax-exempt investments with a return that is higher than the interest they pay on their tax-exempt debt, thus benefitting from a "form of indirect tax arbitrage."

The CBO report makes no recommendations for action, but it says that universities' use of tax-exempt bonds for capital facilities cost the U.S. government an estimated $5.5 billion in foregone tax revenues in 2010.

Student data systems– The Department of Education has announced its intentions to make further regulatory changes in the Family Educational Rights and Privacy Act (FERPA). The announcement was expected as FERPA is viewed by proponents of statewide longitudinal data systems as an obstacle to use and expansion of those systems.

3. Energy: Yucca Mountain– U. S. Secretary of Energy Steven Chu has stated that he plans to proceed with the termination of Nevada's Yucca Mountain nuclear waste repository despite Congressional opposition. The Secretary added that he believes the Department has the legal authority to do so.

Senate climate bill– Senators John Kerry (D-MA) and Joe Lieberman (I-CT) released a draft of their much-anticipated climate change legislation, the American Power Act. The legislation focuses on enhancing job creation and energy independence. It seeks to reduce greenhouse gas (GHG) emissions 17 percent below 2005 levels by 2020 and over 80 percent by 2050 using a combination of approaches for various sectors of the economy. The bill includes incentives for nuclear power, carbon capture and storage, renewable energy and offshore drilling, and would refund most the revenue created by the bill to consumers.

NASA – NASA Administrator Charles Bolden has assigned new roles to field centers if Congress approves the agency's plan to cancel the Constellation program, a five-year-old effort to replace the space shuttle with new rockets and spacecraft optimized for the Moon. The President's proposed $19 billion NASA budget request for FY2011 would increase the agency's top-line spending by 1.5 percent next year, followed by three years of better-than-inflation increases. While that translates to $1.6 billion more for NASA between 2010 and 2013 than the previous Administration proposed, the part of the agency in charge of Constellation—Exploration Systems Mission Directorate—would see its budget shrink by $5.2 billion compared with previous plans. Of local interest, Glenn Research Center would be responsible for managing the Exploration Technology Development and Demonstration Program Office and the Space Technology Research Grants Program Office.

4. NASA-Russian Space Agency deal– NASA has signed a new $335 million contract with Russia to buy six seats on Soyuz spacecraft to launch American and partner astronauts into space after the space shuttle fleet is retired. After the scheduled retirement of NASA's three orbiter space shuttle fleet this fall, American astronauts will have to rely on Russia for transportation to the International Space Station (ISS) until U.S. commercial firms can build spaceships capable of carrying humans.

New robot generation– NASA's new space exploration plan includes a heavy emphasis on robot missions that would land on the Moon, Mars and possibly asteroids to pave the way for human exploration. The agency's FY2011 budget proposed by President Obama calls for funding two such missions starting next year. One would be a lunar expedition that would test the ability to control robots remotely from Earth or the ISS. The next wave could include testing technologies for mining or extracting water, rocket propellant and other resources.

Shuttle delay– The agency has announced a delay for the last flight of Space Shuttle Endeavour from July to November at the earliest to allow time to modify its cargo—a $1.5 billion science experiment—for a longer stay on the ISS. Endeavour initially was targeted for a July 29 launch with a crew of six astronauts in order to deliver the Alpha Magnetic Spectrometer (AMS) to the space station.

National Institutes of Health: Health Care Reform-Buried within the 2,400 pages of the landmark health care reform bill are several provisions that affect clinical research. One most closely tied to healthcare is a provision that focuses on comparative effectiveness research (CER)-evidence based studies that compare the value of medical treatments that would help identify best interventions for patients, thereby improving quality and lowering cost of healthcare. The bill also creates an independent, non-profit Patient-Centered Research Institute to conduct this research. It picks up on the $4 billion in two-year funds for CER that last year's stimulus package gave to the National Institutes of Health (NIH) and the Agency for Healthcare Research and Quality (AHRQ). The new institute will set a research agenda and award contracts through NIH and AHRQ. Funding for the institute is expected to increase to $150 million in 2012, to be supplemented after that by a trust fund drawn from fees on health insurance.

A less-noticed section of the legislation creates a new translational research program, Cures Acceleration Network (CAN), within the NIH Director's office targeting drug development. The program will award grants and contracts of up to $15 million a year to companies, academic researchers, and patient groups to help bridge the "valley of death"—the gap between the initial discovery of a drug and the lab and animal studies a developer needs to conduct in order to obtain regulatory approval for clinical trials. The NIH Director will determine who receives the awards, which must focus on "high need cures" or high priority therapies that are unlikely to be developed by the commercial market. CAN also will have an advisory board of 24 with at least one-third representing patient advocacy groups. The bill authorizes up to $500 million a year for the initiative, but no appropriations to fund it have been provided yet. The bill elevates the NIH's Center on Minority Health and Health Disparities to an Institute. And, beginning in 2013 medical device companies will be required to file annual reports to the Department of Health and Human Services (HHS)listing all payments or other "transfers of value" to doctors and hospitals of more than $10 per event or $100 total per year. The information will be posted on an online public database.

Financial conflict of interest, proposed rulemaking– Partnerships between NIH-funded researchers and industry are often important to moving discoveries from the bench to the bedside. Managing Financial Conflicts of Interests (FCOI) can be challenging due to complex relationships among government, academia and industry. The NIH has issued a Notice of Proposed Rulemaking, which would provide a general revision to existing regulations, is open for public comment until July 20, 2010. More information about the notice is available online.

6. Research: National Science Foundation's new proposal requirement - This month the National Science Foundation (NSF) announced that beginning in October 2010, it will require that all grant proposals include a data management plan in the form of a two-page supplementary document that will be subject to peer review. The step is part of the agency's efforts to address how best to make government-funded research to the public.

NASA's basic research losing ground– A National Research Council (NRC) study concludes that NASA missions are being jeopardized by a significant decline in the agency's basic research capabilities. Deferred maintenance and old equipment are serious problems at the space agency's major facilities. Read more.

Select agency research– A new study in the Proceedings of the National Academy of Sciences indicates that research on select agents, or agents that can be used as biological weapons, has become much less efficient-meaning that the same amount of funding now produces significantly fewer papers than it did prior to 2002, the year Congress passed the Public Health Security and Bioterrorism Preparedness Act and the year after passage of the USA PATRIOT Act. Read more about the study.

Defense Department reaffirms fundamental research exemption– Under Secretary of Defense Ashton Carter issued a memorandum to the military services and defense agencies reiterating that the publication of the results of fundamental research should remain unrestricted. The document reinforces guidance issued in 2008 by then Under Secretary John Young and reaffirms the commitment of Pentagon leaders to compliance with the National Security Decision Directive (NSDD) 189. The memorandum represents an important step in resolving ongoing issues that universities have had with the Defense Department over the inclusion of clauses in subcontracts from industry prime contractors to universities that unnecessarily restrict publication of research results.

The Directive, first issued by the Reagan Administration, states that to the maximum extent possible, results of university fundamental research to remain unrestricted. A copy of the May 24, 2010 memorandum from Under Secretary of Defense Carter is available by contacting the University's Office of Government and Community Relations.

7. Taxes: Tax extenders legislation– The House passed the tax and benefits extender bill, H.R. 4213, on May 28 before leaving Washington for the Memorial Day District Work Week. Democratic leaders significantly reduced the size of the package in response to rising concerns about federal spending and increasing federal deficits. For example, the measure extends unemployment support and health care benefits through November rather than through the end of the 2010 calendar year. It also extend through 2010 expired tax benefits including the R&D tax credit, the IRA charitable rollover, and a modified above-the-line tax deduction for qualified education expenses. The Senate will take up the bill during the week of June 7.

IRS report– The Internal Revenue Service (IRS) released the interim report of its Colleges and Universities Compliance Project. The report summarizes responses to the questionnaire the IRS sent in 2008 on institutional financial practices and identifies issues the agency intends to address in follow-up examinations of more than 30 institutions selected on the basis of their survey responses. It is expected that the follow-up examinations and additional analysis of the survey responses will focus primarily on unrelated business income and executive compensation. The IRS also will look at the use of, and relationships with, controlled entities and related organizations. Findings and related information will be included in the final report.

8. Odds and Ends: The Office of Science and Technology Policy blog reports that it is unveiling a new feature- "Ask the President's Science Advisor." To submit a question to Dr. Holdren, send an email toAskDrH@ostp.gov or tweet your short question to @whitehouseostp with hashtag #AskDrH. Dr. Holdren will select one question each week and answer it via a short blog post to appear every Friday beginning on May 14.

Bayh-Dole Act– The Association of Technology Managers (AUTM), the Association of American Universities (AAU), the Association of Public Land-Grant Universities (APLU), and the Bioetechnology Industry Organization have joined together to sponsor a new website to celebrate the 30th anniversary of the Bayh-Dole Act. The site highlights the wide variety of innovations made possible by the legislation included improved medical diagnostics and therapies, better food crops, and energy conservation technologies. It also features statistics about technology transfer and the history of the Act, and soon will include an economic impact map of the U.S. Visit the website.

America COMPETES Act– On May 28 the House passed H.R. 5116, reauthorization of the America COMPETES Act. The legislation would authorize $85.6 billion in spending over five years that includes significant authorized increases in the budgets for the National Science Foundation, National Institute for Standards and Technology, NASA and Department of Energy Office of Science. It also reauthorizes the Department of Energy's Advanced Research Project Agency-Energy (ARPA-E). The vote represented the third Democratic effort during the month to pass the bill, which will now move to the Senate. Current authorizing legislation expires at the end of 2010.

9. Comings and Goings: Representative David Obey (D-WI), chairman of the House Appropriations Committee, announced that he will retire at the end of this term. Chairman Obey has served in Congress since 1969.

Representative Tim Ryan (D-OH) has been named to the subcommittee on Defense of the House Appropriations Committee and will no longer serve on the subcommittee on Energy & Water. He also serves on the subcommittees on Financial Services and Labor/HHS/Education.

President Obama nominated Harold Varmus, former director of the National Institutes of Health and current president of the Memorial Sloan-Kettering Cancer Center, as director of the National Cancer Institute.

Representative Mark Souder (R-IN) resigned unexpectedly.

11. 2010 Elections: Utah– Three-term incumbent Senator Bob Bennett (R-UT) will not be seeking a fourth term as the Republican Party nominee in November following the Republican state convention this month. Pitted against seven other candidates, Senator Bennett received 26 percent and 27 percent during the first two rounds of voting. Moving to the third round of balloting, businessman Tim Bridgewater won with 57 percent, followed by attorney Mike Lee with 43 percent of the vote. Neither has held public office but both have support from the Tea Party movement. They will face-off in the Utah primary on June 22.

Pennsylvania– Five-term incumbent Senator Arlen Specter (D-PA) was defeated in the Democratic primary by Congressman Joe Sestak, who is serving his second term in the U.S. House. Representative Sestak will be challenged by former Republican Congressman Pat Toomey in November.

West Virginia– In the Democratic primary, fourteen term incumbent Representative Allan Mollohan (D-WV) was defeated by state Senator Mike Oliverio. Mr. Mollohan has been a powerful member of the House Appropriations Committee.

THE BUCKEYE STATE

The General Assembly spent the month attending to a series of legislative initiatives with the expectation that members would recess for the summer by June 3. Included is a bill that provides guidelines, oversight and regulations related to a Constitutional amendment permitting casino gambling in Columbus, Cleveland, Cincinnati and Toledo, which was approved by Ohioans in November 2009. After the General Assembly breaks for the summer, members are not expected to return until after Labor Day.

1. Comings and Goings: Ohio Board of Regents Chancellor Eric Fingerhut announced the appointment of Dr. Byron White as Vice Chancellor for Economic Advancement.

2. Other States: K-12 English language and mathematics standards– In March 2010 the National Governors Association and the Council of Chief State School Officers released Common Core State Standards (CCSS) for English language arts and mathematics. The goal is to have all states adopt these as their standards, making more uniform the knowledge and skills expectations for students in preparation for success in college and careers.

3. May 4 Primary Election Results- *Incumbent

Locally–Republican and former State Representative Matt Dolan has filed as a candidate for Cuyahoga County Executive. It is expected that Mayors Georgine Welo (S. Euclid) and Ed Fitzgerald (Lakewood) and Terri Hamilton Brown, currently leading the Opportunity Corridor initiative, will file as candidates in the Democratic primary. Former Cuyahoga County Commissioner Tim McCormack and businessman Ken Lanci are expected to file as independents. The primary election for County Executive and County Council seats will be held on September 7.

Contact the CWRU Office of Government and Community Relations for additional information on items in the report.