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Legislative update: Quinn signs DREAM Act, Congress to tackle debt ceiling compromise

August 1, 2011
Lori Clark

Lori Clark

In Springfield …

Gov. Pat Quinn today signed Senate Bill 2185, known as the Illinois DREAM Act (now Public Act 97-0233).

This act is intended to make college more affordable for undocumented immigrants. It allows anyone with a Social Security number to enroll in a state-administered college savings program. It also establishes an Illinois DREAM Fund Commission appointed by the governor to raise private funds that will be awarded as scholarships for the children of immigrants seeking a college education.

The commission will develop procedures for accepting and evaluating applications for scholarships and will issue scholarships to selected student applicants. There is an immediate effective date.

On Friday, July 29, the governor vetoed Senate Bill 178. This bill, introduced in response to the loss of Health Alliance as an insurance carrier and impacting thousands of state workers, was designed to give legislators a role in awarding employee health insurance contracts.

In vetoing the bill, the governor’s office said that giving a panel of lawmakers the ability to block the governor from moving forward on a contract would take power away from the Executive branch. “If this bill were to become law, competitive bidding for health care in Illinois would cease.”

With this veto, a lawsuit filed by Health Alliance and the state’s extension of its current health carrier contracts for 90 days, the future of the state’s health insurance offerings are uncertain. Be sure to watch for updates from NIU Human Resources.

According to a recent statewide financial audit by Illinois Auditor General William Holland and Illinois Comptroller Judy Baar Topinka, Illinois ended Fiscal Year 2010 as the most broke state in the nation. Illinois owed $37.9 billion more than all of its assets combined, including cash, investments and property. The deficit would have been worse without a $3 billion cash infusion of federal stimulus funding.

In Washington, D.C. …

The House of Representatives and the Senate are expected to vote today on a compromise debt ceiling package that will ensure that the United States does not begin defaulting on any of its borrowing obligations Tuesday, Aug. 2.

There is still uncertainty surrounding whether or not the leaders in both the House and Senate can secure enough votes to ensure passage of this package.

While the details of the compromise are still forthcoming, an initial analysis of the agreement by the Association of Public and Land-grant Universities reported:

  • Student Financial Aid and Higher Education. The legislation includes $10 billion for the Pell Grant Program in FY 20102 and $7 billion in FY 2014. While not completely eliminating the funding gap for next year, the additional resources improve the situation for the Pell program. The increases would be paid for by changes to the student loan program. Starting in July 2012, graduate and professional students, with few exceptions, would no longer be eligible to participate in the subsidized loan program. Incentives for borrowers in the direct loan program to make on-time payments, in the form of reduced origination fees, also would be eliminated.
  • Discretionary Spending Caps: The compromise calls for binding discretionary spending caps for 10 years, starting in FY 2012. For next year and FY 2013, the legislation establishes separate caps for “security” and “non-security” categories. Total discretionary spending in FY 2012 and FY 2013 will be limited to $1.043 trillion and $1.047, respectively, about $7 billion and $3 billion below FY 2011. The “security” category would be expanded to include the traditional programs at Defense as well as those at the Departments of Homeland Security and Veterans’ Affairs and agencies and programs supported through the intelligence community, the National Nuclear Security Agency, and international affairs budget function. Starting in FY 2014, the firewall would be removed and all programs would be part of a single cap.
  • Debt Ceiling: The debt ceiling is likely to increase between $2.1 trillion and $2.4 trillion. The debt ceiling would be raised through a number of phases. It could be raised by $400 billion almost immediately. It could increase by another $500 billion if Congress fails to approve a joint resolution of disapproval against the increase. After the initial $900 billion, if the president certifies another breach of the debt ceiling and Congress fails on a joint resolution of disapproval, the ceiling would be raised by another $1.2 trillion. If Congress is successful in passing a balanced budget amendment to the Constitution, the president would have the authority to raise the ceiling by $1.5 trillion, instead of the $1.2 trillion. The increase also could be larger than $1.2 trillion but less than $1.5 trillion if the recommendations of the joint committee established to reduce the deficit are adopted by Congress.
  • Joint Deficit Committee: The compromise calls for the establishment of a bicameral, bipartisan deficit reduction committee charged with finding $1.5 trillion in savings over the next 10 years. The committee must vote on a set of recommendations by Nov. 23, and both chambers of Congress must take up the bill by Dec. 23.
  • Enforcement: If congress does not approve at least $1.2 trillion worth of cuts included in the joint committee package, a set of revised discretionary caps would be imposed starting in FY 2013 through FY 2021. Defense and non-defense programs would each absorb half of the cuts. In addition, under this scenario, it appears that defense programs would no longer be protected under the expanded “security” category.
  • Balanced Budget Amendment: The compromise would require each chamber of Commerce to vote on a balanced budget amendment between October and December.

If and when a final package is passed through Congress and signed by the president, there will be implications for NIU. We will continue to monitor this situation carefully and report on the details and impact as they become available.

The Voices section of NIU Today features opinions and perspectives from across campus. Lori Clark is director of federal relations for NIU.