Federal budget proposal full of significant challenges for U-M

Updated 10:00 AM February 18, 2005

Federal budget proposal full of significant challenges for U-M

By Mike Waring
U-M Washington, D.C., Office

The federal budget for fiscal year 2006, which President George W. Bush submitted to Congress Feb. 7, poses serious challenges to universities nationwide, including U-M.

Faced with mounting pressures to cut the deficit, the proposed budget places severe limits on nearly every sector of discretionary federal spending. Here are some of the key recommendations for research funding that would affect U-M the most:

• Federal research and development funding would increase slightly, but basic research done by universities would see a 1 percent overall cut;

• U.S. Department of Defense basic research funding would drop by more than $900 million;

• Funding for the National Science Foundation would increase slightly, but with cuts particularly in the Education and Human Resources division resulting in fewer undergraduate, graduate and post-doctoral students participating in its program;

• National Institutes of Health research money would increase by less than 1 percent, meaning a cut in real dollars after inflation;

• U.S. Department of Energy Office of Science funding would drop by nearly 4 percent;

• Although NASA would see an increase of nearly 5 percent, the space and earth science programs would see an overall cut of $51 million, while the life sciences programs would be cut by about $200 million.

"Taken together, the inadequate fiscal year 2006 investments in research proposed by the administration would erode the research and innovative capacity of our nation," says Association of American Universities President Nils Hasselmo. "Those in the administration, the Congress and the research community who believe that research in these areas is a key to innovation, long-term economic growth and national security have our work cut out for us."

As for student financial aid funding, the president's budget calls for raising the maximum Pell grant by $500 during the next five years, but pays for this in part by eliminating the Perkins loan program that is a very important piece of the aid packages many U-M students receive. The administration then would recall the federal portion of the Perkins revolving fund, which at U-M amounts to $17 million. Other financial aid programs—SEOG, Work Study, GAANN, Javits and International Education—are funded at fiscal year 2005 levels.

The budget also proposes to eliminate around 150 federal programs, including the Trade Adjustment Assistance program for firms that are negatively impacted by import competition. U-M has one of 12 centers around the country that administers the program.

As always, the administration budget begins the yearlong process of Congress and the White House negotiating over how much to spend on which programs. U-M's Washington, D.C., office will be fully engaged with other universities and higher education associations in seeking to improve the funding for these research and higher education accounts and to preserve programs that benefit students and the state of Michigan.

Individuals with questions about any of the programs that may be affected by federal funding changes, should contact the U-M Washington, D.C., office at (202) 554-0578.

Federal budget proposal full of significant challenges for U-M

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