February 23, 2018
Budget Deal Keeps Government Open Until March 23
As part of a Budget deal enacted earlier this month, Congress and the White House are now working towards finalizing FY 2018 appropriations, six months into the fiscal year.
The overall parameters of the agreement, which will keep the government open until March 23, include: raising the statutory spending caps by $300 billion for Defense and Non-Defense government spending for two years (FY 2018 and FY 2019); providing almost $90 million for emergency disaster relief for hurricanes and wildfires, including significant funding for higher education; extending the debt ceiling until March 1, 2019; and creating an advisory committee on the budget process.
For higher education, the deal targets an additional $4 billion over two years to be spent on “college affordability,” and an additional $2 billion for National Institutes of Health research.
The Appropriations Committees now have until March 23 to write final funding bills incorporating the new spending levels. The Labor-HHS-Education Subcommittee, which funds education, will use bills the House and Senate wrote last year as its starting point. Those bills included increases for TRIO and GEAR UP in the House, and a $100 increase in the Pell Grant maximum in the Senate, and neither cut or eliminated student aid programs.
Tax provisions
The budget deal also includes two notable higher education tax provisions. First, the formula for the recently enacted private college endowment tax was tweaked to reinstate the language “tuition paying.” The revised language now excludes Berea College from being on the target list for the tax penalty. The final conference report on the Tax Cuts and Jobs Act was held up on the Senate floor while “tuition paying” was stripped out under the Byrd Rule, since it only applied to one institution. The entire tax bill required a revote in the House because of this provision. The budget agreement is not subject to the Byrd Rule, so the language was successfully put back in. This is a small fix, and only exempts Berea.
Also, the budget deal extends several expiring or expired tax benefits, including the above-the-line tuition deduction for higher education expenses. The tuition deduction had expired on December 31, 2016. The extension would only retroactively cover 2017, so it was renewed – and has already expired once again.
The overall parameters of the agreement, which will keep the government open until March 23, include: raising the statutory spending caps by $300 billion for Defense and Non-Defense government spending for two years (FY 2018 and FY 2019); providing almost $90 million for emergency disaster relief for hurricanes and wildfires, including significant funding for higher education; extending the debt ceiling until March 1, 2019; and creating an advisory committee on the budget process.
For higher education, the deal targets an additional $4 billion over two years to be spent on “college affordability,” and an additional $2 billion for National Institutes of Health research.
The Appropriations Committees now have until March 23 to write final funding bills incorporating the new spending levels. The Labor-HHS-Education Subcommittee, which funds education, will use bills the House and Senate wrote last year as its starting point. Those bills included increases for TRIO and GEAR UP in the House, and a $100 increase in the Pell Grant maximum in the Senate, and neither cut or eliminated student aid programs.
Tax provisions
The budget deal also includes two notable higher education tax provisions. First, the formula for the recently enacted private college endowment tax was tweaked to reinstate the language “tuition paying.” The revised language now excludes Berea College from being on the target list for the tax penalty. The final conference report on the Tax Cuts and Jobs Act was held up on the Senate floor while “tuition paying” was stripped out under the Byrd Rule, since it only applied to one institution. The entire tax bill required a revote in the House because of this provision. The budget agreement is not subject to the Byrd Rule, so the language was successfully put back in. This is a small fix, and only exempts Berea.
Also, the budget deal extends several expiring or expired tax benefits, including the above-the-line tuition deduction for higher education expenses. The tuition deduction had expired on December 31, 2016. The extension would only retroactively cover 2017, so it was renewed – and has already expired once again.
For more information, please contact:
Stephanie Giesecke