Congress Considers Another Continuing Resolution

Congress Considers Another Continuing Resolution – The Federal Government is currently operating on a second Continuing Resolution (CR) for FY 2018 until December 22.  The CR allows most federal programs to continue operating at levels close the FY 2017 level.  On December 13, Rep. Rodney Frelinghuysen (R-NJ), Chairman of the House Appropriations Committee, introduced a third CR that would run until January 19, 2018.  This CR carries provisions that would waive automatic cuts to defense spending and temporarily delays the automatic cuts to non-defense spending.  Without these waivers, the Budget Control Act would trigger automatic budget reductions called a sequester.  This CR would fund national defense for the balance of the fiscal year, extend the Children’s Health Insurance Program and continue short-term government operations.  This CR does not include emergency aid for hurricane and wildfire states and territories.  While this CR will likely pass in the House, most observers expect the Senate to remove the yearlong defense appropriations portion of the CR before they take up this third CR.

This CR surfaces as negotiations continue between the Congress and the White House on raising discretionary spending levels for defense and non-defense programs, emergency funding for hurricane and wildfire states and territories, and a legislative solution for the Deferred Action for Childhood Arrivals (DACA) program.  Once the parties reach agreement on new defense and non-defense spending levels, the pending individual appropriations bills can be finalized by House and Senate appropriation conferees.

Congress Moves to Finalize Tax Reform Legislation – House and Senate negotiators announced an agreement in principle that would reportedly reduce taxes by $1.4 trillion over a decade.  The final bill is expected to include the following provisions:

·      37% top income tax rate;

·      21% corporate tax;

·      Up to $10k of state or property taxes can be deducted;

·      Removes the tax on graduate student tuition waivers;

·      Maintains estate tax but raises threshold to qualify to about $11 million from $5.49 million;

·      Pass-throughs get a 20% deduction on their income;

·      Preserves the individual Alternative Minimum Tax;

·      Gets rid of the proposed corporate AMT;

·      Mortgage interest deduction cap would be lowered to $750,000 from the current $1 million; and

·      Individual mandate contained in the Affordable Health Care Act is eliminated.

The agreement is expected to set the top individual tax rate at 37%, which is less than the current rate of 39.6% and lower than the top rate in each of the bills that passed the House and Senate.  Members are moving to soften the elimination of provisions that allow state and local tax deductions.  Rather than fully repeal the deduction, the compromise would cap it at $10,000.  The corporate rate would be cut to 21% and would take effect in 2018. The Senate bill had delayed that rate cut—from today’s 35%—until 2019. 

The agreement is also expected to eliminate the corporate alternative-minimum tax. Keeping that, as the Senate bill did, would have undercut the value of many popular business-tax breaks, including a research-and-development tax credit. The bill would retain the individual alternative minimum tax with exemptions for incomes up to $500,000 for individuals and $1 million for married couples, much higher than current law. 

The final agreement is expected to drop some of the more controversial changes in the House plan, including taxes on graduate-student tuition waivers, the repeal of deductions for student-loan interest and medical expenses and the end of tax-free private activity bonds used for projects such as hospitals and affordable housing.  More details are expected to be available in time for the compromise agreement to be considered in the House and Senate next week.

DARPA Announces Oceans of Things Program Solicitation -- DARPA has announced its Ocean of Things program, which seeks to enable persistent maritime situational awareness over large ocean areas by deploying thousands of small, low-cost floats that could form a distributed sensor network. Each smart float would contain a suite of commercially available sensors to collect environmental data—such as ocean temperature, sea state, and location—as well as activity data about commercial vessels, aircraft, and even maritime mammals moving through the area. The floats would transmit data periodically via satellite to a cloud network for storage and real-time analysis.  The technical challenge for Ocean of Things lies in two key areas: float development and data analytics. 

Under float development, proposers must design an intelligent float to house a passive sensor suite that can survive in harsh maritime environments. Each float would report information from its surroundings for at least one year before safely scuttling itself in the deep ocean. The floats will be required to be made of environmentally safe materials, pose no danger to vessels, and comply with all federal laws, regulations, and executive orders related to protection of marine life.

The data analytics portion of the Ocean of Things program will require proposers to develop cloud-based software and analytic techniques to process the floats’ reported data. This effort includes dynamic display of float locations, health, and mission performance; processing of environmental data for oceanographic and meteorological models; developing algorithms to automatically detect, track, and identify nearby vessels; and identification of new indicators of maritime activity.

A Proposers Day is scheduled for January 4, 2018, in Arlington, Virginia, at the DARPA Conference Center. Registration instructions and further details are available here.  DARPA expects to release a Broad Agency Announcement (BAA) solicitation soon, which will be available on FedBizOpps.

ARPA-E Announces Solicitation to Fund $100 Million for Transformative Energy Projects -- The U.S. Department of Energy (DOE) announced up to $100 million in funding for new projects as part of the Advanced Research Projects Agency-Energy’s (ARPA‑E) latest OPEN funding opportunity. OPEN will support America’s top innovators through dozens of early-stage research and development projects as they build technologies to transform the nation’s energy system.  ARPA-E has issued previous OPEN solicitations in 2009, 2012, and 2015. Open solicitations enable ARPA-E to support transformational projects outside the scope of existing ARPA-E focused programs. The projects selected under OPEN in 2018 will pursue novel approaches to energy innovation across the full spectrum of energy applications. The agency collaborates across the department’s extensive research enterprise, providing support that complements existing DOE-wide initiatives. The deadline to submit a concept paper is February 12, 2018 at 5:00 p.m. E.T. For additional information on the OPEN funding opportunity, please visit here.

USAID Announces $70 Million to Build Global Research Network -- The United States Agency for International Development (USAID) is seeking applications for a five-year, $70 million cooperative agreement with a U.S. university to establish a strong international network to solve pressing development challenges through research. The university-led network will work with USAID to engage academics and stakeholders in identifying and refining critical development research questions. The project will fund research that engages universities, policymakers, and civil society to achieve maximum development impact. Finally, the network aims to increase the human and institutional capacity of higher education institutions in low- and middle-income countries – with the aim of forging stronger ties between U.S. and low- and middle- income country universities.  USAID estimates that approximately 30-40 percent of the yearly core funding will be dedicated to supporting recipient-identified development research questions as well as the subsequent design, solicitation, and execution of research activities. The remainder of the core funds will cover operating, management, and implementation costs of the grant, including the management and support of a broad international network of researchers and higher education institutions responding to key research questions. More information is available here.

NSF Announces James Ulvestad as Chief Officer for Research Facilities -- The National Science Foundation (NSF) announced this week that James S. Ulvestad will serve as the agency's first Chief Officer for Research Facilities (CORF), a position created in recognition of the critical role research infrastructure plays in science and engineering.  Dr. Ulvestad will advise the NSF director on all aspects of the agency's support for major and mid-scale research facilities throughout their lifecycle. He will also collaborate with NSF employees involved in oversight and assistance of the NSF multiuser research facilities portfolio. Ulvestad will begin his duties as CORF Jan. 2. The need for broad oversight of NSF-supported research facilities was recognized by Congress in the American Innovation and Competitiveness Act (AICA), enacted in 2017, which requires NSF to "appoint a senior agency official whose responsibility is oversight of the development, construction, and operations of major multiuser research facilities across the Foundation."

Senate Commerce Committee Reports Out Nomination of Barry Myers to be Next NOAA Administrator – Along party lines (by a vote of 15-14), the Senate Commerce, Science, and Transportation Committee approved the nomination of Barry Lee Myers to be the next NOAA Administrator.  The next step in the confirmation process is for the full Senate to consider his nomination.  Senate floor action has not yet been scheduled.  Democrats on the Committee opposed Mr. Myers’ nomination due to their concerns, as yet unresolved, regarding potential for conflicts of interest between his current employer, Accuweather, and serving as the NOAA Administrator.  Senator Bill Nelson's statement summarizing his concerns can be found here.

U.S. Fish and Wildlife Service Announces Funding for Great Lakes Restoration Initiative -- The Great Lakes Restoration Initiative targets the most significant environmental problems in the Great Lakes ecosystem by funding and implementing federal projects that address these problems. One goal is to improve habitat and wildlife protection and restoration. Using appropriations from the Great Lakes Restoration Initiative, the U.S. Fish and Wildlife Service (Service), Partners for Fish and Wildlife (PFW) Program anticipates funding wetland (both coastal and interior) and associated upland habitat restoration and enhancement projects for conservation of native Great Lakes fish and wildlife populations, particularly migratory birds and, as appropriate, federally-listed species. Emphasis will be placed on, but not limited to, completing projects within the watersheds of Great Lakes Areas of Concern and in coastal zones. More information can be found in the Notice of Funding Opportunity available here.

NSF Study Shows State Government R&D Expenditures Increase by 3.1% -- State government agency expenditures for research and development totaled $2.3 billion in FY 2016, an increase of 3.1% from FY 2015. Five state governments (California, New York, Texas, Florida, and Ohio) accounted for 64% of all state government R&D in FY 2016 (table 2). NSF’s latest InfoBriefpresents summary statistics from the FY 2016 Survey of State Government Research and Development, sponsored by the National Science Foundation, National Center for Science and Engineering Statistics (NCSES). The FY 2016 survey presents the most recent NCSES statistics of R&D activities performed and funded by state government agencies in each of the 50 states, as well as the municipal government of the District of Columbia. Survey data are available by state and by individual state agency. Further details are also available on R&D performer (intramural and extramural), source of funding, type of R&D (basic research, applied research, and experimental development), and R&D by government function (agriculture, energy, environment and natural resources, health, transportation, and other).

NSF InfoBrief Shows U.S. R&D Increased by $20 Billion in 2015 to $495 Billion; 2016 to Rise to $510 Billion — New data from the National Center for Science and Engineering Statistics (NCSES) within the National Science Foundation (NSF) indicate that research and experimental development (R&D) performed in the United States totaled $495.1 billion in 2015. The estimated total for 2016, based on performer-reported expectations, is $510.0 billion. These numbers compare to U.S. R&D totals of $454.0 billion in 2013 and $475.4 billion in 2014. In 2008—just before the onset of the main economic effects of the national and international financial crisis and the Great Recession—the U.S. total was $404.8 billion. These data reflect sizable increases of $21.5 billion in 2014 and $19.7 billion in 2015. After essentially no change between 2008 and 2010, year-over-year increases in the U.S. total from 2010 to 2015 averaged $17.7 billion. The 2016 increase is estimated to be $14.8 billion. The 2014 and 2015 increases are mainly due to higher levels of business R&D performance. However, as presently estimated, the business sector's role is noticeably less predominant in the 2016 increase.  Adjusted for inflation, growth in U.S. total R&D averaged 1.4% annually over the 7-year period 2008–15, marginally behind the 1.5% the average pace of U.S. gross domestic product (GDP) over the same period. By comparison, the average annual rate of growth was notably higher in the prior 10-year period (1998–2008): 3.6% for total R&D, and 2.2% for GDP. In part, the smaller average pace of R&D growth in 2008–15 reflects the inclusion of the Great Recession years (notably, 2009 and 2010). If just the 5-year period of 2010 to 2015 is considered, the average annual pace of growth is 2.3%, compared to 2.2% for GDP. The growth of business R&D over this same 5-year period is 3.3%, well ahead of GDP growth, but it is not strong enough to offset the slower average rates of growth (if not outright declines) in some of the other performing sectors. The estimate for 2016 shows R&D also expanding only a little faster than the pace of GDP (1.7%, compared to 1.5% for GDP).