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Federal File

Coverage of legislation and regulatory activity that affects higher education

By Liz Clark

What Midterm Elections Might Mean For Higher Education

Congress returned on Sept. 8 from its annual August recess to begin a short autumn work period in Washington, primarily to pass a temporary budget to fund the federal government. Despite a long list of issues to consider, party leaders have kept short the number of legislative items that "must pass" prior to voters going to the polls on Election Day, Tuesday, Nov. 4.

Action on pressing policy concerns, both foreign and domestic, is largely on the back burner until the balance of power of the next Congress is clear. It is highly unlikely that Democrats will unseat the Republican majority in the House of Representatives. However, the party leadership of the Senate is in question, and many Washington insiders are of the opinion that Republicans are likely to win enough seats to shift the majority their way.

To win control of the Senate, Republicans need to net six new seats-this would require the defeat of at least two incumbents. Political analysts are paying particularly close attention to Senate races that, according to polls, are too close to call, in Alaska, Arkansas, Colorado, Iowa, Louisiana, Michigan, New Hampshire, and North Carolina.

Before members of Congress began to focus all their energy on this fall's campaign trail, lobbyists and interest groups urged legislators to address a number of issues. However, passage of a funding bill to keep the federal government operating was the only "must-pass" legislation on the pre-election agenda. At press time, Congress still needed to pass a stopgap spending bill by Oct. 1, the start of the new federal fiscal year, in order to prevent a government shutdown.

In addition to highlighting the need to address pressing foreign policy concerns, particularly in the Middle East, lobbyists have been urging lawmakers to include on their autumn agenda the renewal of (1) the Terrorism Risk Insurance Act program (TRIA), and (2) a raft of tax breaks that expired at the end of 2013, known as "extenders."

High Stakes for 2015

Depending on the Election Day outcomes, lawmakers may convene in lame-duck sessions in November and December to address some unfinished business. Regardless, the stakes are high for colleges and universities once the 114th Congress is sworn in and politicians return to their work on Capitol Hill in January. With intense public scrutiny and concerns over the cost of college, student debt burden, and other college-related issues, lawmakers have responded by proposing new programs, rules, regulations, and reforms.

NACUBO has seen discussion drafts of a comprehensive tax reform proposal from House Ways and Means Chairman Dave Camp (R-MI) and a plan for reauthorization of the Higher Education Act (HEA) from Senate Health, Education, Labor and Pensions Committee Chairman Tom Harkin (D-IA). Both proposals would have significant impact on students and their families, the higher education workforce, and the fundamental business operations of colleges and universities.

This fall, further debate is expected when the Obama administration will make public its plan for a federal college ratings system, and as lawmakers continue policy discussions centered on the campus sexual assault issue.

The stakes are high for colleges and universities once the 114th Congress is sworn in and politicians return to their work on Capitol Hill in January.

Over the summer, a bipartisan group of senators—led by Sen. Claire McCaskill (D-MO)—introduced the Campus Accountability and Safety Act. The proposed legislation would require institutions to take preventive measures to protect students from sexual assaults, increase institution accountability, and require establishment of new campus resources for assault victims. McCaskill's bill would impose stricter penalties for Clery Act violations and create new transparency requirements through annual student surveys.

NACUBO supports those provisions that align with its own mission: to advance the economic viability, business practices, and support for higher education institutions in fulfillment of their missions. However, the association is troubled by proposals that would have the opposite effects: limiting resources available to students, families, and institutions, and/or creating undue burden or unfair treatment under laws and regulations.

When negotiations with Congress over these concerns take place next year, the environment on Capitol Hill will be uncharted territory, as newly elected lawmakers—regardless of Election Day outcomes—begin their legislative terms. In addition to new faces in Congress and possibly a different party leading the Senate, a considerable number of veteran legislators, with depth and expertise in higher education policy, have announced their retirements. Obviously, this will cause significant turnover in congressional leadership positions and committee chairmanships.

Tax Committee Chairman Will Retire

In February, House Ways and Means Committee Chairman Dave Camp (R-MI) released a comprehensive discussion draft of his proposed Tax Reform Act of 2014. Subsequently, Camp also announced that he plans to retire at the end of his current term.

Camp's proposals to restructure the existing tax code include a wide scope of changes that affect colleges and universities—including modifications to student and family higher education tax benefits, employee tax benefits, charitable giving, tax-exempt bond financing, treatment of unrelated business income, information reporting, and more.

Rep. Paul Ryan (R-WI) is expected to replace Camp as committee chairman. Notably, Ryan has been reluctant to fully espouse Camp's discussion draft, and it is unclear how he will approach tax reform, given other economic policy demands facing the next Congress. However, as chairman of the House Budget Committee, Ryan has embraced reforming the federal government's role in higher education, and he is likely to bring this perspective and critical view to the Ways and Means Committee.

In the Senate, should Republicans win the majority, it is likely that Sen. Orrin Hatch (R-UT) will become Senate Finance Committee chairman, with the current chairman, Ron Wyden (D-OR), shifting to the role of ranking minority member.

Not only will there be changes in the leadership lineup on these committees, there may also be a change in approach. As talk about tax reform heated up over the past couple of years, lawmakers and tax policy experts insisted that any significant changes to the code should be comprehensive and include both business and individual reforms. Tax writers argued that the two areas of the code are so intertwined that successful reform could happen only if they were altered in tandem.

However, the recent focus and public reproach of corporate inversions (by which American companies seek lower tax rates by moving their headquarters out of the country), has garnered significant scrutiny and may lead to piecemeal, rather than comprehensive, reform.

Higher Education Act Reauthorization

In June, the Democratic-led Senate Health, Education, Labor, and Pensions (HELP) Committee unveiled a 785-page discussion draft to reauthorize the HEA. Sens. Lamar Alexander (R-TN) and Michael Bennet (D-CO) released a proposal to simplify the process of applying for and receiving financial aid to attend college, and House Republicans released a white paper outlining their priorities for HEA reauthorization.

In the House, Education and the Workforce Committee Chairman John Kline (R-MN) and Higher Education and Workforce Training Subcommittee Chairwoman Virginia Foxx (R-NC) divided their objectives into four principles: empowering students and families to make informed decisions; simplifying and improving student aid; promoting innovation, access, and completion; and ensuring strong accountability and a limited federal role.

As with the changing landscape for the tax-writing committees, there will also be marked differences in the committees responsible for writing the HEA. This will change committee dynamics and the outlook for proposals as they are currently drafted. The lead Democrat on the House Education and the Workforce Committee, George Miller (D-CA), first elected to Congress in 1974, will retire at the end of this term. He has served on the education committee since he was first elected and has been a staunch supporter of the Pell Grant program. The lead Democrat on the committee in the 114th Congress is expected to be Bobby Scott (D-VA).

Notably, Sen. Tom Harkin (D-IA), the top Democrat on the Senate education committee, also decided not to seek re-election this year. The 785-page discussion draft of the reauthorization package released by Harkin will certainly contribute to discussions in the next Congress; but regardless of which party is in the majority, a new chairman will ultimately write the next HEA reauthorization. Under a Republican majority in the Senate, Alexander—who is a former governor of Tennessee, a former U.S. Secretary of Education, and president of the University of Tennessee from 1988–91—is expected to be the next HELP Committee Chairman.

It is unclear who will lead the HELP Committee should Democrats keep control of the chamber. Sens. Barbara Mikulski (D-MD) and Patty Murray (D-WA) follow Harkin in seniority, but both currently chair other committees. Mikulski is not expected to give up her top spot on the Appropriations Committee and Murray, the current Budget Committee chairwoman, has not made any official decisions. Sen. Bernie Sanders, the independent from Vermont, is currently chairman of the Committee for Veterans' Affairs, but could possibly move to the HELP Committee seat. Other Democratic senators currently on the committee include Bob Casey (PA), Kay Hagan (NC), Al Franken (MN), Michael Bennet (CO), and Sheldon Whitehouse (RI).

Although voters will have the final say, and the outlook for control of the Senate in the next Congress is cloudy, one thing is clear: Major changes are ahead in terms of the individuals who will determine the policies that will alter higher education laws—with substantial implications for students and their families, the higher education workforce, and the fundamental business operations of institutions. 

NACUBO CONTACT Liz Clark, director, congressional relations, 202.861.2553, lclark@nacubo.org, @lizclarknacubo

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