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

2. Federal Funding Landscape FY 2014 and FY 2015 appropriations Tax Reform Debt Ceiling (October/November) Sequestration Grand Bargain? 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 30 th, short-term CR likely House: Passed 4 of 12 bills (Defense, Energy &Water, Homeland Security, and Military Construction/Veterans Affairs) Senate: Passed 0 bills Fiscal year ends September 30 th, 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 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 Proposals act as if sequester will continue but violate 50-50 defense/non-defense cuts, pushing more onto discretionary domestic appropriations Senate Proposals ignore sequester and builds on FY 2011 baseline, resulting in huge funding differences CONFIDENTIAL Congress’ failure to conference Ryan-Murray budgets adds to the problem as chambers are free to work off dramatically different blueprints

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 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 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 2 nd No major action in the Senate Reauthorization of HEA unlikely before 2015 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 2 nd 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 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