Omnibus Bill Includes Eisenhower Funds, R&E Tax Credit

Three weeks after the start of the new fiscal year, and two weeks after its planned adjournment date, Congress passed the final appropriations bill for fiscal year 1999. This “omnibus” bill (H.R. 4328) incorporated eight of the thirteen annual appropriations measures: Agriculture, Commerce-Justice-State, District of Columbia, Foreign Operations, Interior, Labor-HHS-Education, Transportation, and Treasury-Postal. The omnibus bill also included some additional items that Congress had been unable to pass separately, including the extension of several tax credits. Included in the 40-pound, almost 4,000-page document are funding for the Eisenhower Professional Development grants for teachers, and an extension of the Research and Experimentation Tax Credit.

Eisenhower Professional Development Program:

The Eisenhower program, within the Department of Education, provides federal funds for teachers’ professional development, primarily in math and science. In the omnibus bill, it is fully funded at the requested level of $335 million for fiscal year 1999. This is equal to the FY 1998 appropriation. The program had been under threat by House appropriators, who would have reduced its funding to $285 million and allowed states to take the money as part of an education block grant. The Senate bill, on the other hand, would have provided full funding and not included the program in a block grant.

Block granting of the program, which would enable states to use the money for purposes other than professional development, has been opposed by a number of science, math, and education organizations. In June, the American Institute of Physics signed a statement opposing block granting the Eisenhower program, as did six of its Member Societies: the Acoustical Society of America, the American Association of Physicists in Medicine, the American Association of Physics Teachers, the American Astronomical Society, The American Physical Society, and the American Vacuum Society (see FYI #128 .)

The final bill does not allow block granting of the program, and funds it at the full $335 million requested by the Administration. On a related matter, the bill does not expand the Ed-Flex program, President Clinton’s alternative to block grants, which allows approved states more flexibility in utilizing federal education funds. The ideological debate over education block grants is sure to arise again in the next Congress.

Research and Experimentation Tax Credit:

There was concern among the business community when the Research and Experimentation Tax Credit expired on June 30 of this year. This tax credit, which encourages R&D in the private sector, has bipartisan backing, and many in government and the private sector want to make it permanent. The congressional leadership intended to include extension of this credit in a larger tax bill, but the House and Senate were never able to reach agreement on such a bill. At the last minute, extensions of several tax credits were added to the omnibus appropriations bill. The R&E Tax Credit is now in effect, retroactively, for the period from July 1, 1998, to June 30, 1999.