The University Record, May 7, 1996

Federal budget funds financial aid, releases research dollars

By Jared Blank

After 13 temporary spending measures, two government shutdowns and seven months of wrangling with Congress, President Clinton signed into law the 1996 Omnibus Appropriations Bill on April 25. The $160 billion bill includes some positive news for proponents of the direct lending program, student aid and federally funded research.

"I am sure I speak for many researchers on campus when I say that we are pleased and relieved that the 1996 budget has finally been settled and that the results for many of the agencies that fund research on our campus were more favor able than had been predicted a few months ago," says Homer A. Neal, vice president for research. "The hard work that many of our faculty performed, in different settings, to help make the case for continuing strong federal support for the nation's research activities have certainly paid off."

"Following a year and a half of great uncertainty and turmoil, not much harm was done to higher education. Yes, there were losses here and there, but the fundamental importance of the federal role in research and student aid was reaffirmed---that was our goal," says Thomas A. Butts, associate vice president for government relations. "While $23 billion was cut from overall discretionary spending, education and research programs were not big contributors."

The House of Representatives proposal to eliminate the Federal Direct Student Loan Program was not included in the final agreement. Colleges and universities will be free to choose whether to participate in the direct lending program or the Federal Family Education Loan Program. In addition, there is no cut in in-school interest subsidies for students.

The U-M was one of the first schools to switch to the direct lending program, where the government provides loan funds directly to universities, bypassing banks and loan guarantee agencies.

Other student-related programs also were funded at levels higher than expected by many, says Butts. The maximum Pell Grant award was increased by $130 to $2,470, the Work Study program received no funding cut and new federal contributions to the Perkins loan program were saved from elimination. Currently at the Ann Arbor campus, 3,200 students receive Pell grants, 2,800 are in the work-study program and 5,600 receive Perkins loans.

Clinton's national service program, AmeriCorps, which the House and Senate Appropriations committees voted to eliminate last fall, will receive $400.5 million, down from $468 million last year, after the administration promised to reign in spending on the program.

"I think the higher education community is beginning to learn that you do not need to buy into false choices to reach an agreement---that you don't need to trade an in-school interest subsidy in return for no cap on direct lending, for example, or applied research for basic research," says Butts. "You don't have to walk away from one thing to include another. I t is important for us to stick up for what is right. We should not have to compromise what we think is important for higher education."

Robert Samors, government relations officer, says that researchers feel a sense of relief because the 1996 budget has been settled. "There has been a great sense of uncertainty among researchers because agencies have not been providing full funding for research awards. Now that the budget is settled, researchers will see the full amount of their awards."

"Faculty can now get back to devoting more effort to their main business of research and teaching," says Neal, "although we must all continue to be vigilant and active in communicating our views to the public and to Congress. I urge our faculty to remain attentive and informed, and we in the Administration will continue with our efforts to help develop, at the national level, a more solid and consistent long-term framework for federal funding of research."

The National Science Foundation received $3.22 billion, $40 million above the level previously agreed to by House and Senate conferees.

The National Endowment for the Arts and the National Endowment for the Humanities were spared elimination, but both received cuts of more than 30 percent. NASA's Science, Space and Technology account received $83 million more than the amount originally agreed to in the Conference agreement, though this is less than the President's budget request. In addition, Congress directed NASA to suspend the recently announced downsizing of its headquarters staff.

Congress already has begun to work on the appropriation bills for the 1997 fiscal year, which begins Oct. 1. "Because of the huge fight over major issues in 1996, Congress has little time to work for the 1997 budget," Butts says. "It is unlikely we'll see a repeat of the acrimony and showmanship of the last year and a half. The 1997 appropriations numbers could look very much like the 1996 numbers."

"We owe a special thanks to some key members of Congress, such as John Porter and Michigan's own Vern Ehlers, who effectively championed various components of the federal R&D budget," says Neal.

"It's been a tough year," Butts says. "But all of the voices from campus really have made a difference."