Federal Funding Landscape August 8, 2013 Kevin O’Neill & Jessica Monahan

1. Federal Funding Landscape August 8, 2013Kevin O’Neill & Jessica Monahan

2. Federal Funding Landscape • FY 2014 and FY 2015 appropriations • Tax Reform • Debt Ceiling (October/November) • Sequestration • Grand Bargain?

3. FY 2014 Appropriations • House: Passed 4 of 12 bills (Defense, Energy &Water, Homeland Security, and Military Construction/Veterans Affairs) • Senate: Passed 0 bills • Fiscal year ends September 30th, short-term CR likely CONFIDENTIAL

4. FY 2014 Sequester • Spending must be cut by $109.3 billion in FY 2014 • Reductions enforced by lowering spending caps – providing Congress more flexibility • Senate and House budgets are $91 billion apart • Failure to agree on appropriations at the reduced spending levels would result in across-the-board sequester – just as indiscriminate as FY 2013 CONFIDENTIAL

5. House vs. Senate FY 2014 Spending House Senate Proposals ignore sequester and builds on FY 2011 baseline, resulting in huge funding differences • Proposals act as if sequester will continue but violate 50-50 defense/non-defense cuts, pushing more onto discretionary domestic appropriations Congress’ failure to conference Ryan-Murray budgets adds to the problem as chambers are free to work off dramatically different blueprints CONFIDENTIAL

6. Implementation of the Affordable Care Act (ACA) • Employer Mandate: The ACA’s employer shared responsibility penalty and reporting requirements have been delayed until 2015 • Individual Mandate: Individuals who can afford medical insurance must obtain coverage by January 1, 2014 (or pay a penalty) • Open enrollment for the Health Insurance Marketplace starts October 1, 2013 with coverage beginning in 2014 • Variable-hour employees, including student workers, who work an average of 30 hours + per week, must be offered access to the employer medical plan CONFIDENTIAL

7. Tax Reform • House and Senate tax committees solicited recommendations for reform • “Blank slate” approach • Tax provisions of interest: • Education tax provisions (education savings, tuition tax credits and exemptions, student loan interest deduction and forgiveness, etc.) • Charitable giving incentives • Employee benefits • Tax-exempt bond financing CONFIDENTIAL

8. Reauthorization of the Higher Education Act (HEA) • HEA Reauthorization will address: • Reporting requirements • Financial aid • College affordability • Accountability measures • UA submitted comments and feedback to the House Education and the Workforce Committee on August 2nd • No major action in the Senate • Reauthorization of HEA unlikely before 2015

9. Other Legislation • Workforce Investment Act (WIA): • House passed WIA reauthorization earlier this year, Senate to bring their bill to the floor in the fall • Working to ensure UA’s eligibility for grants, minimize funding reductions, and allow for funding to be used for cross-purposes (i.e. Carl D. Perkins) • Farm Bill: • Expires on September 30, 2013 • Includes research funding • One-year extension expected because of unsuccessful conferencing due to vast differences between the House and Senate bills CONFIDENTIAL

10. Questions? CONFIDENTIAL