Federal R&D Funding FY-13

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The Week Ahead
Capitol Hill October 8, 2012 

Federal research and development (R&D) funding could face significant reductions under the “trigger” implication of the Budget Control Act. The Administration’s fiscal year 2013 budget request for R&D programs includes $141 billion in base funding, a $2 billion increase from the fiscal year 2012 funding level of $139 billion. Federal R&D funds play a critical roll in supporting university and laboratory basic research. The request represents the President’s R&D priorities of which Congress has yet to adopt through the appropriations process. In particular, Congress will play a central role in determining the extent to which federal R&D investment can grow in the context of increased pressure on discretionary spending and how available funding will be prioritized and allocated. Under the six-month Continuing Resolution agreement, R&D programs are administered at the FY-12 enacted levels through March of 2013.
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Committee Hearing Schedule Highlights  

**Congress is in recess until Tuesday November 13th**

Congress adjourns for the elections… What’s next?

Both chambers of Congress have adjourned for the final campaign stretch before the November presidential elections. A number of critical issues remain unresolved and will need consideration when Congress returns in November through the end of the calendar year. Implications of the Budget Control Act top the list of issues which could trigger a $1.2 trillion reduction in federal spending programs. The impact of such cuts is calculated to raise unemployment to 9% nationwide. The National Association of Manufacturers has listed the below potential impacts of sequestration:

  • 1,010,000 private sector jobs, including 130,000 manufacturing jobs could be lost by 2014.
  • GDP could be 1% lower by 2014.
  • Total job losses could increase the unemployment rate by 0.7 percent.
  • California could experience the largest loss (148,000) followed by Virginia (115,000) with Pennsylvania experiencing (34,700) potential employment loss.

Several bi-partisan proposals have been floated to avert implications of the Budget Control Act. The National Commission on Fiscal Responsibility (Simpson-Bowles) is the most popular proposal which calls on Congress to adopt sweeping reforms in discretionary spending, tax reform, & social security. Momement appears to grow around Simpson-Bowles to adopt large measures in the lame duck Congress which could freeze the potential economic consequences of the Budget Control Act. Below is short list of the proposal’s recommendations:

  • Limit fiscal year 2013 appropriations to FY- 2008 levels and all future outlays to half of inflation through fiscal year 2020.
  • Adopt a 15 cent per gallon gas tax creating a new Highway Trust Fund with spending capped at the above amount through fiscal year 2020.
  • Simplify the tax code to 12%, 22%, and 28% respectively and reduce the corporate tax rate to 28% with individual deductions and charitable giving to be negotiated by Congress and the Administration.

While the acting Congress did not attach a legislative vehicle to repeal the sequester in the Continuing Resolution passed last week, there is still a short opportunity to address this matter in the lame duck session. The problems cited are fundamentally structural and the only viable way to lower deficits will require curbing entitlement spending and raising additional tax revenues. Regardless of potential election outcomes, when the Congress reconvenes on November 13th these challenges will remain.

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H.R. 5865 – “The American Manufacturing Competitiveness Act of 2012

On Tuesday the House approved H.R. 5865 – “The American Manufacturing Competitiveness Act of 2012”. The bill directs the President to create a “National Manufacturing Competitiveness Strategy” through executive order on the first day of each new administration. It requires each new administration to publish a strategy to sustain the nation’s manufacturing sector through job growth, innovation, investment, and a focus on technology which supports national security. Furthermore, the legislation will direct the Secretary of Commerce to establish a Manufacturing Competitiveness Board made of governors from two states and ten individuals from the private sector. The Board shall include in the national manufacturing competitiveness strategy recommendations for achieving such goals and the recommendations may include:

  • Actions to improve manufacturing competitiveness to be taken by the President, Congress, State and local governments, and the private sector.
  • Actions to improve government policies and coordination among entities developing such policies.
  • The consolidation or elimination of government programs.
  • Actions to improve government interaction with the manufacturing sector and communication regarding the effects of proposed or active government regulations or other executive actions on the manufacturing sector and its workforce.
  • The reform or elimination of regulations that place the United States manufacturing sector at a disadvantage relative to other nations.
  • Actions to reduce business uncertainty, including, where appropriate, finalization of regulations applicable to manufacturers.
  • The bi-partisan legislation was passed in the short two week session before Congress adjourns until after the November elections.  Congress also approved H.J. Res. 117 the Continuing Resolution to fund the government until March of next year providing funding at the FY-12 enacted levels until appropriators take up the final FY-13 measure in the 113th Congress. Both bills reveal an effort to restore confidence in the Congress‘s ability to cooperate prior to the November elections.  For details of the American Manufacturing Competiveness Act visit the “read more” link.

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    Newsletter September 10, 2012

    The Week Ahead

    Capitol Hill September 10, 2012

    Both chambers convene Monday after a long August recess and two national conventions. Legislators return to Washington for a short two week session the last before the November elections. Several bills are under suspension of rules, including H.R. 5865 the American Manufacturing Competitiveness Act of 2012. Appropriators must pass a Continuing Resolution during this session to keep the government running through November and well into the 113th Congress.  The agreement, a six month CR, will allow Congress to focus on resolving potential issues triggered by the Budget Control Act during the lame duck session. Visit the “read more” link for a detailed look at legsiation under consideration.
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    Committee Hearing Schedule Highlights
    HOUSE ARMED SERVICES: 21st CENTURY CHALLENGES
    Full-Committee Hearing
    September 11, 10:00 a.m. 2118 Rayburn
    House Armed Services  (Chairman McKeon, R-CA) will hold a hearing titles “Framework for Capacity Building Programs in the 21st Century”

    HOUSE ENERGY & COMMERCE: “WHERE THE JOBS ARE”
    Sub-Committee Hearing
    September 12,  9:45  a.m. 2322 Rayburn
    Commerce, Manufacturing & Trade Sub-Committee (Chairwomen Bono Mack R-CA) will hold a hearing titled “Where the jobs are” focusing on efforts to overcome obstacles to job growth.
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    Six Month Continuing Resolution

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    House & Senate leaders have agreed to a Continuing Resolution appropriation funding the government into fiscal year 2013 for six months at the $1.047 trillion topline amount agreed a year ago August in the Budget Control Act. The measure still needs a GAO budget score and floor passage by both chambers in September.  A Continuing Resolution or “stop gap” funding measure will keep federally funded programs operational until March of next year (2013). The legislation also delays spending debates through the November election, passed the lame duck session of Congress, and well into the 113th session of Congress beginning January of 2013.

    The last time Congress adopted a six month CR was directly following President Obama’s mid-term election culminating in H.R. 1473 the yearlong Continuing Resolution for fiscal year 2011. The CR is a common legislative procedure used to “continue” the appropriation cycle without adopting each of the 12 sub-committee reports individually or as a whole in an omnibus appropriations act. Below are a few commonly accepted terms of the CR process:

    Continuing Resolutions fund federal agencies and programs when one or more of the twelve general bills are not enacted by September 30th the beginning of the federal fiscal year.

    a.            Traditionally, continuing resolutions were intended for short-term situations, but in some cases agencies have been funded for an entire fiscal year using this method.

    b.            The continuing resolution expires either at a specified date or upon the enactment of a regular appropriation bill. In this case the CR expires March 2013.

    c.             The trend is away from “continuing” spending at last year’s level to setting dollar amounts for each account just as in the regular appropriation bills. These “continuing” amounts are negotiated within the CR.

    d.            Report language is allowed in the House version of continuing resolutions.

    e.            The fact that CR’s are done at the last minute and contain so many provisions, force Congress and the President into up-or-down approval without full deliberations.

    Provisions and language included in each of the individual passed bills as well as topline spending levels agreed to in those bills are not necessarily included in the Continuing Resolution process.  It is possible, however, to make recommendations and include provisions in the final joint explanatory statement of a Continuing Resolution originating in the House.  Many of these provisions and topline spending levels are recognized through H.R. 1473 the final FY11 spending agreement.

    Newsletter July 23, 2012

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    The Week Ahead
    Capitol Hill July 23, 2012

    The House convenes Monday with 8 legislative days left before August target adjournment. Several bills are under suspension of rules, floor action on the committee approved Farm bill is not expected until next week. The Senate will consider S.3412 the Bush tax cut extender for individuals earning less than $250,000 annually. The House is expected to bring a companion tax bill to the floor before recess which extends tax cuts for all individuals. Appropriation bills continue to stall in the Senate with no signal of mark up before recess.
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    Committee Hearing Schedule Highlights
    HOUSE SMALL BUSINESS: SURVIVAL IN THE RECESSION
    Full-Committee Hearing
    July 25th, 1:00 p.m. 2360 Rayburn
    House Small Business  (Chairman Graves, R-MO) will hold a hearing titled “Tales of Resilience: Small Business in the Recession”.

    SENATE APPROPRIATIONS: LABOR HHS
    Full-Committee Mark Up
    July 25, 10:00  a.m. 124 Dirksen
    Senate Appropriations Committee (Chairman Harkin, D-IA) will hold a hearing on fiscal year 2013 appropriations for the Departments of Labor and Health & Human Services.
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    Newsletter July 16, 2012

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    The Week Ahead
    Capitol Hill July 16, 2012

    The House convenes Tuesday and will consider 5 bills under suspension of rules. Floor action is scheduled for H.R. 5872 the Sequestration Transparency Act which requires the Office of Management & Budget (OMB) to report impacts of proposed automatic spending reductions. H.R. 5856 the fiscal year 2013 House Defense Appropriations bill is also scheduled for consideration without an approved Senate companion bill. The Senate Finance Committee will mark up legislation creating permanent normal trade relations with Russia.
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    Committee Hearing Schedule Highlights
    HOUSE WAYS & MEANS: MANUFACTURING SECTOR TAX OVERHAUL
    Full-Committee Hearing
    July 19th, 9:30 a.m.
    House Ways & Means (Chairman Camp, R-MI) will hold a hearing titled “Tax Reform and the U.S. Manufacturing Sector”.

    SENATE FINANCE: PNTR WITH RUSSIA
    Full-Committee Mark Up
    July 18, 9:30 a.m. 215 Dirksen
    Senate Finance Committee (Chairman Baucus, D-MT) will mark up legislation establishing permanent trade relations with Russia.
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    Newsletter July 9, 2012

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    The Week Ahead
    Capitol Hill July 9, 2012

    Both chambers return from recess Monday with a full legislative agenda. The House is scheduled to consider 7 bills under suspension of rules. Appropriators have stalled mark up on remaining spending bills which could slip until August recess and beyond. A largely symbolic House vote this week will “Repeal the Health Care Act” recently upheld by the Supreme Court. In the Senate cloture is filed to consider S.2237 the Small Business Jobs and Tax Relief act.
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    Committee Hearing Schedule Highlights
    HOUSE ARMED SERVICES: AIR FORCE READINESS
    Sub-Committee Hearing
    July 12th, 11:00 a.m. 2213 Rayburn
    House Readiness Subcommittee (Chairman Forbes, R-VA) will hold a discussion on “Aircraft Force Structure Reductions”.

    SENATE FINANCE: JOBS THROUGH TAX OVERHAUL
    Full-Committee Hearing
    July 10, 2:00 p.m. 215 Dirksen
    Senate Finance Committee (Chairman Baucus, D-MT) will hold a hearing titled “Opportunities and Growth Through Tax Reform.”
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    Newsletter July 2, 2012

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    The Week Ahead
    Capitol Hill July 2, 2012

    Both the House & Senate are in recess this week for Independence Day district work period. Late last week Congress passed the Surface Transportation reathorization which extends federal highway funding through 2014.  H.R. 4348 the Transportation Conference Report may be the last major piece of legislation approved by Congress until after the November elections. Both chambers return to formal session the week of Monday July 9th, when the Senate Defense Sub-Committee could mark up the fiscal year 2013 Defense bill.
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    Future Hearing Schedule Highlights
    HOUSE AGRICULTURE: 2012 FARM BILL
    Full-Committee Markup
    July 11th, 10:00 a.m.  1300 Longworth
    House Agriculture Committee (Chairman Lucas, R-OK) will mark up legislation re-authorizing the 2012 Farm Bill.

    SENATE INDIAN AFFAIRS: FEDERAL TRIBAL RECOGNITION
    Full-Committee Markup
    July 12th, 2:15 p.m. 628 Dirksen
    Senate Indian Affairs Committee  (Chairman Akaka, D-HI) will hold a hearing titled “Federal Recognition: Political and Legal Relationship between Governments.”
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    Newsletter June 25, 2012

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    The Week Ahead

    Capitol Hill June 25th, 2012
    Both the House & Senate are in session to consider several measures before Independence Day recess. The House will mark up two fiscal year 2013 spending bills covering Transportation-HUD  and Agriculture appropriations. Three House measures impacting energy policy are under suspension of rules and scheduled for votes on Tuesday. The Senate is focused on S.1940 the Flood Insurance reauthorization and S.3187 the FDA user fee bill.  For details of the Majority Leader’s schedule visit the “read more” link.
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    Committee Hearing Schedule Highlights
    HOUSE BUDGET: SEQUESTRATION TRANSPARENCY
    Full-Committee Markup
    June 27, 10:00 a.m.  210 Cannon
    House Budget Committee (Chairman Ryan, R-WI) will mark up legislation requiring the President to provide a report detailing sequester implications of the Budget Control Act.

    SENATE FINANCE: CAPITAL GAINS TAX
    Full-Committee Joint Hearing
    June 28, 10:00 a.m. 210 Capitol Visitors Center
    Senate Finance Committee (Chairman Baucus, D-MT)  will hold a joint hearing with House Ways & Means Committee (Chairman Camp, R-MI) on proposals relating to taxation of capital gains.
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