Risks Are High When Congress Reconvenes
August 12, 2011
After the bruising summer debate over a deal to lift the federal debt ceiling and address deficit spending, Congress immediately departed Washington for its annual August break. The Senate will convene for business again on Tuesday, September 6, and the House will return on Wednesday, September 7.
During the month of August, most legislators will spend time in their districts meeting with constituents and working hard to repair abysmal approval ratings—according to a recent CBS News/New York Times poll, 82 percent of Americans disapprove of the way Congress is doing its job.
When Congress returns to Washington, DC in the fall, they will be focused on completing the FY12 spending bills and on the work of the 12-member joint congressional committee that will consider deficit reduction legislation on the order of $1.5 trillion. If enacted, the legislation proposed by the congressional “super committee” could set spending and tax policies for the next ten years. It is important to ensure that your elected officials understand what may be at stake for your institution.
NACUBO encourages you to work with your campus president, government relations staff, and other appropriate officials to reach out to your U.S. senators and members of Congress when they are in the districts during the month of August. Invite them to campus and reinforce the message that federal student aid, research, education, and other programs are vital to the students and your institution. It is also likely that key congressional staff members may also be taking a break from Washington to visit with communities and constituents and they may value the opportunity to visit your college or university.
Your institution may want to include additional priority concerns, but NACUBO urges you to address the following:
- Pell Grants: We applaud the President and Congress for providing funding to sustain the maximum Pell Grant award for students in the 2012-2013 academic year. Pell Grants are awarded to the neediest students and provide them with the opportunity to attend college. As Congress moves forward making decisions about the budget and addressing how to reduce budget deficits further, we ask you to continue to make funding for Pell Grants and other federal student aid programs a top priority.
It is possible, if not likely, that the “super committee” will seek to raise revenue by making changes to the tax code. Two concerns business officers will want to address include:
- Tax-Exempt Bond Financing: Because it was proposed last year by President Obama’s National Commission on Fiscal Responsibility and Reform, we believe the committee may consider eliminating or limiting tax-exempt interest for all newly issued municipal securities. Revenue from operations or from restricted gifts usually does not provide enough funds to build, expand, and renovate the plant, equipment, or property needs of an institution’s mission and taxable debt is more costly. We urge Congress to protect this important tool, which contributes to the financial health of many institutions.
- Preserve the Charitable Deduction: President Obama’s FY 2012 budget included a provision that would limit at 28 percent the value of tax deductions for charitable donations, state and local taxes, and mortgage interest for families earning more than $250,000. This was the third time the administration has proposed the cap and we believe it is another revenue option the committee may consider. Studies indicate that donors give for many reasons—tax deduction incentive among them. We ask Congress not to accept this barrier that limits charitable giving when resources for public and nonprofit higher education institutions are already restricted or diminishing.
Director, Congressional Relations