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Updated 10:00 AM February 13, 2006




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Fiscal year 2007 federal budget has good news, bad news

The 2007 federal budget unveiled Feb. 6 by President George W. Bush includes a major increase for the National Science Foundation (NSF) and the Department of Energy (DOE) Office of Science. The budget proposal, however, cuts other important research programs significantly while slashing funding for student aid.

President Bush announced in his State of the Union address Jan. 31 a new American Competitiveness Initiative to focus on keeping the nation competitive with emerging economies around the globe. As a result, agencies that would see increases for FY 07 include the NSF, DOE Office of Science, National Institute of Standards and Technology, and Department of Defense research accounts. NSF would see an overall increase of nearly 8 percent for research activities. The budget, however, also projects a cut of $17 million in the agency's education account. At DOE, a 14 percent increase is proposed for research, with funds for universities increasing by 22 percent. Defense basic research accounts would rise more than 11 percent from last year's request. That figure takes out earmarked projects, however, and actually could be viewed as a 3.5 percent cut from the appropriated level for FY 06.

Agencies that might not fare as well include the National Institutes of Health (NIH), which will be flat-funded, or see no increase from FY06. After doubling during a five-year period, NIH could see 2,000 fewer grants supported if Congress upholds that level of funding. NASA basic research also is a victim in the proposed budget, with more of its money being focused on manned space flights and less on science. The National Oceanic and Atmospheric Administration also could see its research accounts reduced dramatically.

As for student aid, the administration budget proposes to keep the maximum Pell Grant at $4,050 for the fifth year in a row. It also proposes to eliminate the Perkins loan program by not providing any new funding and recalling the federal contributions made to campuses in previous years. At U-M, this would be more than $50 million. The administration also has proposed flat funding other campus-based financial programs (Federal Work Study and Supplemental Educational Opportunity Grants). Distribution of these funds is based on formulas and U-M will continue to see its share decrease as more schools become eligible.

As for other agencies of interest, the administration proposes flat funding for the National Endowments for the Humanities and the Arts. For the Corporation for National and Community Service, the administration proposes to cut of millions from both the AmeriCorps and Learn and Serve programs.

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