To: AASCU Presidents and Chancellors
From: Ed Elmendorf, Sr. Vice President of Government Relations and Brittny McCarthy, Director of Federal Relations
Date: March 7, 2008
Re: Higher Education Act and Federal Budget

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This email provides updates on the reauthorization of the Higher Education Act and the federal 2009 budget.

The Higher Education Act

• Both the U.S. House and Senate have passed their bills to reauthorize the Higher Education Act (H.R. 4137 and S. 1642). Congressional staff are currently "pre-conferencing" their two bills in preparation to reconcile the differences - of which there are many.
• Final action on the legislation is not expected until after the 2-week Spring Congressional recess in late March. Because the current "extension" of HEA expires at the end of March, a new extension of the current law will have to be passed soon.
• There are a few issues of contention that are delaying action on the legislation until after the Spring Congressional recess, including issues AASCU supports- such as a State Maintenance of Effort provision in the House bill.
• Attached to this email is the letter AASCU sent to the Hill outlining provisions of interest to AASCU membership. Also attached is the ACE memorandum and related documents sent to the Hill on behalf of several higher education associations, including AASCU.
• AASCU continues to work with the Hill, AASCU membership, and other associations to improve provisions of concern and to ensure inclusion of provisions AASCU is supportive of.
• Your campus is likely receiving communications from various groups or Members of your Congressional Delegation regarding various provisions in the bill. If you need assistance, background information, or have questions about AASCU's positions on specific provisions in the bills, please do not hesitate to contact Ed Elmendorf at elmendorfe@aascu.org or 202-478-4651or Brittny McCarthy, AASCU's director of federal relations, at mccarthyb@aascu.org or 202-478-4653.

The Federal Budget

• After the release of the President's fiscal year 2009 budget back in February, Congressional budget committees went to work crafting non-binding budget resolutions that will guide the fiscal year 2009 spending bills and tax legislation.
• This week both House and Senate budget committees passed budget bills providing boosts in the "accounts" of concern to higher education, rejecting the President's proposal to cut and eliminate programs.
• The House resolution allows for $22 billion more in overall discretionary spending than the President's proposal, and the Senate resolution allows for $18 billion more in overall discretionary spending than the President's proposal.
• "Reserve funds" for higher education and education benefits for servicemembers, veterans, and their families were created. The details of what these funds will be used for is uncertain at this time though it provides some budget flexibility for Congress to allocate funds in these areas. A Senate amendment made note that the fund includes a possibility of increasing Pell Grants.
• The Senate bill does not provide a "budget reconiciliation" instructions, while the House bill does as a way to address the AMT patch (the "middle class" tax issue receiving a lot of press recently).
• Much of the debate on the budget resolutions focused on tax cuts and "pay-as-you-go" rules- ideological differences exist between Congressional Democrats and Republicans on how to offset costs. In the House the committee debate included earmarks, while Senate committee members took a few moments to discuss the merits of earmarks.
• A moratorium on Congressional earmarks may be in the works for this year. Though the impact of such a decision may not be much since Congress likely will not even finish the budget process until a new President is in the White House. It may likely be a political strategy by House Democrats to demonstrate fiscal responsibility.
• Both committees passed their resolution on party-line votes.
• Floor action in both the House and the Senate is expected next week, before both chambers recess for 2 weeks.

Please contact Brittny McCarthy, AASCU's director of federal relations, at mccarthyb@aascu.org or 202-478-4653 with questions about this advisory.