Congress and President Clinton agreed on funding appropriations through Dec. 15, which allowed the government agencies to reopen. Agencies without approved appropriations bills (such as NIH, NSF and NASA) were to be funded at the lower of fiscal year 1995 funding, or at the level of the House or Senate passed bill. Programs or agencies slated for elimination would be funded at 75 percent of their FY 95 level. Final appropriations bills or a continuing resolution will need to be passed before the Dec. 15 deadline or another shutdown may occur. Agreement was reached when the President indicated acceptance of a seven year balanced budget plan if certain program areas are protected and if the Office of Management and Budget and independent economists are involved in budgetary estimates.
Prior to the Thanksgiving recess, Congress also passed the budget reconciliation conference report (H.R.2491) eliminating the deficit in seven years. The President indicated he would veto the bill due to concerns about student aid (direct lending), Medicare (major impact on beneficiaries and hospitals), Medicaid (wants it to remain an entitlement) and some tax issues. The government continues to function whether or not a deficit reduction bill is passed.
A brief review of some areas of interest:
Student Aid: Conferees restored the grace period interest exemption for all students and the current PLUS interest rate.
Tax Issues: Students and spouses repaying loans at certain income levels may take advantage of an above-the-line deduction of up to $2,500 per annum for up to 60 months after beginning payment. Section 127 (employee educational assistance) is extended for graduate students throughout 1995. Super-IRA provisions included in the bill would allow withdrawals for educational expenses.
Medicare/Graduate Medical Education: A new GME trust fund is created with funding of $13.5 billion. Indirect medical education payments are reduced to 6.7 percent in FY 96 and fall to 5.0 percent in FY 2001 and thereafter.
Further information may be obtained from Ellen S. Smith at 854-3394, or e-mail: firstname.lastname@example.org.
Columbia University Record -- December 1, 1995 -- Vol. 21, No. 11