Inside (the Beltway) Scoop

By | December 7, 2017

Congress Considers another Short Term Spending Agreement; Negotiations Begin on Compromise Tax Bill; FASEB Issues Alert Opposing Graduate Student Tuition Waiver Tax

After a short Thanksgiving break, Members of Congress returned to Washington facing several critical year-end deadlines; how to keep federal agencies operating after the current “continuing resolution” (CR) expires on December 8 is the most immediate.

Prior to the holiday, House and Senate leaders indicated their preference for another two-week CR so they could continue their ongoing negotiations on raising the Budget Control Act (BCA) spending caps. Democrats said they would support a short-term CR but warned Republicans of their reluctance to postpone budget decisions until January.

Appropriators also acknowledged their inability to finalize fiscal year (FY) 2018 funding levels for agencies until leadership reached an agreement on revising the spending caps. A short-term CR until late December is “almost a certainty,” said House Labor, Health and Human Services Appropriations Subcommittee Chairman Tom Cole (R-OK). His Senate counterpart, Roy Blunt (R-MO), told reporters, “Everybody believes there will be more money coming with some of it going to defense, and some number going to non-defense.”

On November 16, Senate Appropriations Committee Chairman Thad Cochran (R-MS) issued a press release urging the leadership to get an agreement on top-line funding levels. He noted that the CR expires December 8 and added, “We cannot afford to extend the CR into next year.”

FASEB also sent a letter to House and Senate leaders urging them to continue their efforts to reach an agreement on raising the budget caps. The letter also noted that without an agreement to adjust the FY 2018 spending cap for non-defense programs, it will be impossible for Congress to provide the $2 billion increase for the National Institutes of Health that was approved by the Senate Appropriations Committee.

Efforts to address the budget caps dispute hit a roadblock when House Minority Leader Nancy Pelosi (D-CA) and Senate Minority Leader Chuck Schumer (D-NY) declined to attend a meeting with Speaker Paul Ryan (R-WI), Senator Majority Leader Mitch McConnell (R-KY), and President Trump on November 28. The meeting had been called to discuss a deal to fund the government.

Congressional Quarterly reported that Republican leaders were considering a proposal to raise the defense cap by $54 billion and the non-defense cap by $37 billion in FY 2018 and FY 2019. According to Politico, Democrats rejected that offer because it did not provide an equal increase for non-defense programs.

With the December 8 deadline looming and leadership at an impasse, House Appropriations Committee Chairman Rodney Frelinghuysen introduced a CR to fund agencies through December 22. A press release from the chairman noted, “This CR will allow for additional time for a deal to be reached on top-line spending levels for this fiscal year. Once this agreement is made, my Committee will rapidly go to work with the Senate to complete the final legislation.” The House passed the CR on December 7. Senate approval of the CR is anticipated on Friday.

As Congress moved forward to prevent a government shutdown, Pelosi and Schumer announced they would meet with the president on December 7 to resume discussions on raising the spending caps. Republican leaders were also expected to attend the White House meeting.

Funding the government is not the only issue Congress hopes to resolve by year’s end. Leadership is also moving quickly to reconcile the differences in the Tax Cut and Jobs Act (HR 1), passed by the House November 16 and the Senate December 2. A conference committee must negotiate a compromise bill before the final legislation can be approved. Late on Monday, December 4, House Ways and Means Committee Chairman Kevin Brady (R-TX) was appointed to lead the conference committee.

Other members of the committee are Representatives Devin Nunes (R-CA), Peter Roskam (R-IL), Diane Black (R-TN), Kristi Noem (R-SD), Rob Bishop (R-UT), Don Young (R-AK), Greg Walden (R-OR),  and John Shimkus (R-IL). Democrats will be represented by Richard Neal (MA), Sander Levin (MI), Lloyd Doggett (TX), Kathy Castor (FL), and Raúl Grijalva (AZ). Senate conferees will likely be named within the next few days.

A key issue that must be resolved by the conference committee concerns taxation of tuition waivers provided to graduate students who serve as teaching or research assistants. The House bill treats tuition waivers as taxable income, which would increase students’ tax burden and possibly discourage many from pursuing advanced degrees. The Senate bill does not include language on tuition waivers.

Congress needs to hear from graduate students and the research community about the impact of the tuition waiver tax. FASEB issued an e-action alert so that Members hear constituent opposition to making tuition waivers taxable in the final tax bill.

FASEB also sent a letter to House Republican and Democratic leadership and issued a statement opposing the graduate student tuition waiver tax. Once Senators are named to the conference committee, FASEB will send letters to all conferees requesting that the House provision be removed.

In related news, Rep. Pete Sessions (R-TX) is collecting signatures from his House and Senate colleagues on a letter citing strong concerns about the graduate student tuition tax. The letter is addressed to the conference committee and notes that “. . . graduate students are our country’s future medical researchers who discover life-saving cures; engineers that develop cost-saving methods; and software programmers that code the next market-transforming mobile app.”