The federal budget proposal and its potential impact on UW-MadisonTweet
President Donald Trump’s first budget request to Congress has understandably caused some concern on our campus and across the higher education landscape. The $4.1 trillion proposal lays out an aggressive plan to reduce discretionary non-defense spending as a way to offset large proposed defense spending increases. The cuts are broad and deep, but a significant chunk of the savings proposed would come out of student aid and research spending.
- The budget proposal funds the Department of Education at $59 billion, which is $9 billion less than FY 2017 levels, or a 13 percent cut in funding. While investment in Pell Grants would remain at current levels, President Trump’s proposal would drain $3.9 billion from the Pell surplus, speeding the time when Congress will be faced with increasing the funding appropriated each year or cutting the size of the maximum grant.
- Beginning in July 2018, the Public Service Loan Forgiveness program is eliminated. This forgives the remaining balance on student loans for borrowers who work full-time in public service and who make on-time payments for 10 years. Ending this program would impact students who pursue careers in teaching, non-profit and social service agencies, and with the military and local, state, federal and tribal agencies.
- The president’s plan also allows the Perkins Loan program to expire on Sept. 30, eliminating a source of low-interest campus-based loans for high-need students. This program helped 3,265 students attend UW-Madison last year. The proposed budget also cuts the Federal Work-Study program by nearly half, to $500 million, from $990 million. Cuts to work-study student aid would affect about 2,000 student workers at UW-Madison. Because our housing office employs a large number of work-study students, ending this subsidy to low-income student wages would also potentially lead to higher student fees and housing costs.
- Under the president’s plan, the National Institutes of Health would be funded at $26.9 billion, a $7.2 billion decrease from the current budget. This 21 percent cut would result in almost 2,000 fewer grants. A reduction for NIH would severely impact lifesaving research on our campus and will slow the development of new treatments for cancer, Alzheimer’s and other diseases. These cuts will also impact our graduate training programs that educate the next generation of science leaders.
- The proposal also caps NIH indirect-cost reimbursements at 10 percent. This could result in a loss to campus of more than $50 million per year. Indirect cost reimbursement covers administrative and facilities costs that part of the cost of research. By drastically reducing indirect cost reimbursements, over time, the facilities and support for research that we can afford will decline, reducing the capacity and quality of such research. I’ll have a blog post soon that dives more deeply into indirect costs.
- The National Science Foundation is budgeted at $6.7 billion, a decrease of $819 million, or 11 percent. While $6.7 billion will fund approximately 8,000 new research grants, that only amounts to 19 percent of the research grant proposals NSF receives. A reduction for NSF would impact groundbreaking work in the areas of advanced manufacturing and material sciences research.
- The administration’s FY 2018 budget proposal requests $17.9 billion for USDA, a $4.7 billion, or 21 percent, reduction from FY 2017. The proposal would provide $1.3 billion for the National Institute of Food and Agriculture, a reduction of $110.1 million, or 8 percent. A reduction for USDA would limit our ability to generate innovations in agriculture that translate directly to gains in farm productivity.
- The National Oceanic and Atmospheric Administration is budgeted at $4.8 billion, a reduction of $987 million, or 16 percent. The Trump budget sets funding for NOAA’s Oceanic and Atmospheric Research at $350 million, a $139 million, or 26.8 percent, decrease. A reduction to the NOAA could harm our efforts to enhance weather forecasting capability and preserve coastal areas.
- The proposed $919 million reduction for the Department of Energy’s Office of Science would threaten innovative research happening at the Great Lakes Bioenergy Research Center and high-energy physics.
- The budget proposal would eliminate the National Endowment of the Humanities and the National Endowment for the Arts. The elimination of NEA and NEH would have ripple effects across campus, hurting programs to study the Constitution, preserve film history and even to assist veterans through innovative programs like the Warrior Book Club. The arts and humanities are also vital to the education of our students and support of our faculty.
I understand why these proposals are alarming, but the president’s budget request is just that – his request. Though the document signals to Congress the administration’s spending and tax policy priorities, it is Congress that makes the final budget decisions.
Unsurprisingly, congressional Democrats rejected the plan. But perhaps more telling was the less-than-enthusiastic response the plan received from Republicans. This suggests that we will likely see major changes before a final budget is adopted.
Next the House and Senate Budget Committees will draft their budget resolutions. These resolutions set the spending targets for each chamber’s appropriations committees. I don’t want to get too far in the weeds on the process, but suffice it to say that the federal budget process is a marathon, not a sprint. Given disagreements about the president’s budget proposals, it is likely to take longer for all parties to reach an agreement on spending levels. That means Congress will need to pass a continuing resolution to operate under last year’s budget by the end of September or face a government shutdown.
In the meantime, our federal relations staff has been working to ensure that the importance of these funds to our institution, and to the greater state and national economy, is fully apparent to our congressional delegation. When administration officials come to the Hill to testify, we are arming our representatives with questions to ask. We have encouraged our congressional delegation to sign Dear Colleague letters in support of programs that are important to UW and our students. Almost every program has a champion in Congress, so we will look for ways to work with them.
In addition to coordinating with national higher ed associations and science coalitions, we also work hand-in-hand with other Big Ten universities. In the past few months we have also coordinated Capitol Hill meetings for campus faculty; more such visits are planned.
In April I was in D.C. to testify at a congressional hearing about regulatory reform, I also led a Big Ten delegation meeting with Speaker Paul Ryan. During that meeting he made clear he understands the importance of federally funded research.
An excellent summary of the complete budget proposal and its potential impact on campus can be found here. You can also receive periodic updates by clicking on the subscribe tab at the bottom of the to the Federal Relations home page.
If you have further questions about how the federal budget will affect your department, or if you have information you think would be helpful to our federal relations team, please contact Assistant Vice Chancellor for Government Affairs and Strategic Partnerships Ben Miller here on campus, or contract our Federal Relations office in D.C. and speak to Director Mike Lenn or Assistant Director Cate Johnson.