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Government Affairs Update

Federal Relations

Federal Appropriations

To date, Congress has passed four of the required 13 appropriations reports for fiscal year 2004--those for Defense, Homeland Security, Department of the Interior, and the Legislative Branch. Congress also has completed, but not yet passed, the conference reports for the Energy & Water and Military Construction appropriations. Congress passed a continuing resolution to fund other parts of the government at 2003 levels until it passes the remaining reports, either individually or in an omnibus package. Congress also passed the report for supplemental appropriations for the war in and reconstruction of Iraq and Afghanistan.

Republican leaders have set November 21, 2003 as the target for adjournment, but it is unclear whether Congress will be able to complete its work by then. As of the publication of this document, reports indicated that Congress had begun work on an omnibus package to include most of the remaining reports and that an omnibus conference could meet as early as Tuesday, November 18.

 The final Homeland Security report included $874 million for science and technology research and development, test and evaluation, acquisition, and operations, and separately, $70 million for university-based homeland security centers.

The final Interior report included $122 million for the National Endowment for the Arts and $121 million for the National Endowment for the Humanities (compared to $116 million and $110 million, respectively, in fiscal year 2003).

Among the remaining reports, the Labor, Health and Human Services, and Education report is of particular concern to Penn and the higher education community. This report includes funding for National Institutes of Health (NIH) research and for federal student assistance.

Higher Education Act Reauthorization

Congress has begun to reauthorize the Higher Education Act, which includes the major federal higher education programs. Penn and the higher education community will continue to advocate strongly for increased student aid and other measures to improve the Act.

Penn and the higher education community are concerned about three overarching perceptions that have emerged in Congress and are playing out in the media, that: (1) institutions are not doing all they can to avoid tuition increases; (2) admissions policies, such as early decision and legacy preferences, benefit institutions but are unfair to low-income and underrepresented students; and (3) a liberal bias in academia precludes a full and fair discussion of issues on campuses.

These perceptions are embodied by the following bills:

1.  Representative McKeon (R-CA) introduced a bill to penalize institutions that increase tuition at twice the rate of inflation by not allowing them, and by extension their students, to participate in certain federal student aid programs.

2.  Senator Kennedy (D-MA) introduced a bill to require institutions (1) with less than 40 percent of students receiving Pell Grants and with a gap of 20 percentage points between the graduation rates of any two subgroups of students disaggregated by race, gender, and eligibility for Pell Grants to increase spending on retention programs; and (2) to include information on average tuition and fee discounts and the percentage of the previous year's freshman class comprised of early decision and legacy students (broken down by race and eligibility for Pell Grants) in admissions packets.

3.  The House passed a bill to reauthorize international education programs that establishes an advisory committee to Congress and the Secretary of Education that could lead to federal intrusion into academic decision-making. OGCPA is working with Dr. Walter Licht and the Interareal Council (heads of Penn area studies centers and programs) to develop recommendations for the Senate reauthorization of these programs.

OGCPA will continue to work independently and with the higher education community to make Penn's and the community's perspective on these and other issues heard throughout the House and Senate reauthorizations of HEA.

OGCPA has established an HEA Reauthorization Task Force that includes administrators from across the university to examine reauthorization issues.

Congressional Attack on NIH Research

At a recent joint House-Senate hearing, Members asked NIH Director Zerhouni about “controversial” research grants. The grants, which were fully peer-reviewed by NIH, deal with health, sexuality, drug abuse, and dangerous personal behavior. Three of the grantees are from Penn. It is believed that the list of grants was provided to Congressional staff by an interest group. Although its initial response was tepid, NIH told the higher education community this week that it categorically supported each of the grants and plans to issue a strong statement on the matter, soon.  OGCPA is working with the higher education community to ensure that politics not be allowed to interfere with scientific research.


Conferees on the Senate-House Conference Committee continue to work to resolve differences in the House and Senate versions of their competing  Medicare prescription drug bills that would offer prescription drug coverage to the nation's 40 million Medicare beneficiaries. The system would be overseen by the government offered through Medicare and private health care companies, and financed partially through government payments.

Importantly, the conferees are also debating a series of provider payment provisions included in the different versions of the Medicare prescription drug bills. The nation's teaching hospitals are looking for favorable outcomes on provisions restoring cuts in Medicare's indirect medical education adjustment (and adjustment that recognizes the unique mission and costs of America's teaching hospitals) and providing for a full inflationary update for the current fiscal year. 

President Bush has recently urged the Medicare conferees to complete their discussions and send a bill to him to sign into law by the end of the year. The conferees have missed several self-imposed deadlines, but hope to complete their negotiations in the coming weeks. While they have reached tentative agreements on a number of provider issues, the conferees have yet to reach an accord on more contentious issues relating to program elements of the prescription drug plan. Leadership hopes that this will be resolved before they break for Thanksgiving.

Commonwealth Relations

Penn's Commonwealth Appropriations

In March, Governor Rendell released his proposed FY 2003-04 Commonwealth budget in two parts.  As part of a “bare-bones” budget, he recommended a total of $42,946,000 in direct funding to Penn, a reduction of $2.3 million, or 5 percent, below the amount authorized in the current fiscal year.  Each of Penn's line items in our non-preferred appropriation--Veterinary School, Medical School, Cardiovascular Studies, Dental Clinics and University Museum--were cut by five percent. These cuts were consistent with the proposed five percent reduction recommended for all other institutions of higher education.

In addition to the non-preferred appropriation cuts, the Governor proposed substantial cuts to various Medical Assistance programs that provide funding to Penn Medicine to support patient care to the poor. The cuts include complete elimination of the Community Access Fund (providing additional funding for institutions with high levels of Medical Assistance payments), MA medical education, and outpatient disproportionate share payments. Penn Medicine's three urban hospitals (HUP, Presbyterian and Pennsylvania) would suffer a $14 million annual funding cut from elimination of these programs.

At the time, the Governor asked that the General Assembly postpone any action on the budget until the release of the second part of his budget, which include revenue enhancements designed to support new initiatives in basic education, tax reform and economic development. The Legislature, however, chose to approve the “bare-bones” budget (HB 648) in mid-March.  The Governor signed HB 648 but line-item vetoed the entire basic education budget, thus forcing the legislative leadership back to the bargaining table for further budget negotiations.

Since the introduction of the Governor's budget in early March, the University has been actively engaged in activities designed to restore the funding cuts to Penn, including direct meetings with legislative leadership and the Administration by President Rodin and other senior University and Penn Medicine officials; written communication to all members of the General Assembly and the Governor; grassroot efforts by faculty, staff and students; and  coalition activity with other universities and health care providers. 

The General Assembly has not taken final action on the approval of Penn's appropriation. All of the non-preferred appropriation bills, including Penn's, were approved by the House in July at the Governor's recommended level. However, these bills are currently being held up in the Senate where Democrats have refused to put up the necessary votes (under law these bills require 2/3 vote of each chamber) until the entire budget is resolved.

On October 21, the House approved a package of bills that hopefully will move the General Assembly closer to a final resolution of the Commonwealth budget impasse. The House approved the following key pieces of legislation: (1) an increase in the state's personal income tax; (2) a basic education funding bill, including funding for new programs; and (3) a bill restoring approximately $500 million in programs cut in the prior budget. Included in the restoration bill is a 100% restoration of the Medical Assistance cuts to the hospitals.

Both Senate caucuses have indicated that they are not in support of the package as approved by the House. Nevertheless, most observers believe the House action substantially moves the process forward and can serve as a framework for serious negotiations to resolve the budget. At this date, Pennsylvania is the only state in the country without a final budget in place. With the November elections over, the General Assembly returned to session on November 17. It is hoped that a resolution will be completed before the end of the calendar year.

Commonwealth Capital Budget Authorizations

Last fall the General Assembly gave final approval to the Commonwealth's Capital Budget Project Itemization Act, Senate Bill 1213. This legislation includes authorizations for the following Penn projects:

Life Sciences Building . . . . . . . . . . . . . . . . . . . . . . . . . $16,000,000

Professional Development Center for
Teachers and Educators . . . . . . . . . . . . . . . . . . . . . . . . . .2,000,000

In addition to these projects, the University has been successful in adding a $30 million authorization for a cancer care/ambulatory care facility (on the site of the Civic Center) to the latest version of the FY 2003-04 Capital Budget bill (HB 1634). This bill has been approved by the House and approval is expected by the Senate before they break at the end of the calendar year.

Under Pennsylvania law, the power to fund projects that have been authorized through the Capital Budget rests solely with the Governor. Towards that end, we are working closely with the Governor and his senior staff to provide briefings and detailed information on each of these projects.

City and Community Relations

Philadelphia Municipal Elections

On November 4, voters elected officials to serve in the following seats: Mayor, City Council, City Commissioners, Clerk of Quarter Sessions, Register of Wills, Sheriff, and Trial Judges in the Court of Common Pleas, Municipal Court, and Traffic Court. OCCR worked closely with City organizations to recruit student volunteers to assist with voter registration and election activities.

1.  Mayoral Race

John F. Street was reelected to a second term as Mayor of Philadelphia by defeating Sam Katz by a margin of 58% to 42%, approximately 75,000 votes. The Mayor performed better in almost every ward than he did in 1999, when he defeated Katz by a 2% margin.

With the sitting Mayor re-elected, Penn will build on existing relationships with those members of the Administration who remain in office. In keeping with its civic engagement mission, the University will continue to offer the expertise of faculty and staff to assist the Administration on tackling policy issues confronting City government.

2.  City Council Race

Councilwoman Jannie Blackwell was reelected to her 4th term as the 3rd Councilmanic District representative. The Councilwoman, who presently is the Majority leader and Chair of Finance, was uncontested in her bid for re-election. Other City Council results included the reelection of all sitting Council persons in each of their districts. At-large democratic candidates re-elected include Councilman James Kenney (who led the at-large candidates with the most votes), Councilman David Cohen; Councilman W. Wilson Goode, and Councilwoman Blondell Reynolds Brown. Councilman Frank Rizzo was re-elected to one of two Republican at-large seats on Council. Newly elected at-large members of Council include Democrat Juan Ramos and Republican Jack Kelly, who replaces the other Republican seat formerly filled by the late Thacher Longstreth. Political analysts indicate that both new members are supporters of Mayor Street and thus will likely strengthen Mayor Street's relationship with City Council. It could also influence the election of the Council President post for the upcoming session. The new City Council will be sworn in, and the leadership positions on Council will be elected on January 5, 2004.

--Carol R. Scheman, Vice President for
Community and Public Affairs



  Almanac, Vol. 50, No. 13, November 18, 2003