This week’s Federal Update covers Congressional and Executive activities of interest in Washington, D.C.
Congressional Branch Activities of Interest
Floor Activity
The House and Senate are both in session this week.
Reconciliation
1. The House Ways and Means Committee released and subsequently passed its portion of the reconciliation bill, which focuses on tax policy. The bill does not expand the endowment tax to public institutions. The bill expands the existing endowment tax on private institutions to a four-tiered system:
| Student-Adjusted Endowment | Excise Tax Rate |
| $500,000 - $749,999 | 1.4% (current rate) |
| $750,000 - $1,249,999 | 7% |
| $1,250,000 - $1,999,999 | 14% |
| $2,000,000+ | 21% |
Religious institutions are exempt from the endowment tax in the House proposal.
The measure also includes new taxes on university intellectual property and repeals longstanding exemptions from taxation for non-profit organizations under the Unrelated Business Income Tax provisions of the Internal Revenue Code, including:
- An exemption on taxes for nonprofit organizations on royalty income stemming from licensed uses of their names and logos.
- An exemption of income from non-public research.
The bill reinstates the deduction of domestic research and development expenses during the year incurred, instead of the current policy of amortization over a five-year period. The bill also indexes for inflation the Section 127 employer-provided educational assistance program and makes permanent the student loan repayment option. A section-by-section summary of the bill may be found here.
2. The House Energy and Commerce Committee released and passed its portion of the reconciliation bill. The E&C Committee’s language seeks to reduce deficits through Medicaid and healthcare reforms. The package rescinds unobligated funding from the Infrastructure Reduction Act for climate and clean energy programs at the Department of Energy and the Environmental Protection Agency. See the full text here.
3. The House Agriculture Committee voted along party lines to advance its portion of the reconciliation package. The proposal makes change to the Supplemental Nutrition Assistance Program (SNAP), establishing a cost-sharing approach for states with a baseline of 5 percent of SNAP benefit costs. The legislation also expands the SNAP work requirement to 18-64 (from 54). A section-by-section summary may be found here.
Hearings
The Senate Health, Education, Labor, and Pensions Committee held a hearing to examine the President's proposed budget request for FY 2026 for the Department of Health and Human Services (HHS). Indiana Senator Jim Banks (R) participated in the hearing, asking HHS Secretary Robert F. Kennedy Jr. several questions about the Secretary’s plans for a database for Americans with autism. Senator Banks also asked about funding for autism research at the National Institutes of Health, which Sec. Kennedy shared would be continued, but with a focus on “environmental toxins” versus genetic causes of autism. Watch the hearing here.
Senators Heinrich and Rounds Issue Request for Information on Initiative to Accelerate Advancements in Science
Senators Martin Heinrich (D-NM) and Mike Rounds (R-SD) have issued a request for information on the American Science Acceleration Project (ASAP), a bipartisan initiative “aimed at making advancements in U.S. science ten times faster by 2030.”
The RFI asks “researchers, innovators, businesses, government agencies and the public to share proposals that will equip American scientists and stakeholders with next-generation data, computing and artificial-intelligence capabilities while removing unnecessary barriers to innovation.” RFI responses are due on June 30, 2025.
Executive Branch Activities of Interest
National Science Foundation Plans Additional Reductions in Staffing; Abolishes 37 Divisions
National Science Foundation (NSF) Chief Management Officer Micah Cheatham sent a memo to NSF staff last week outlining personnel cuts and organizational changes that would lead to a major downsizing of the agency. According to reporting from Science magazine, NSF will abolish the current 37 divisions spread across the agency’s eight directorates and replace the divisions with “clusters” that fund research in the president’s five priority areas: artificial intelligence, quantum information science, biotechnology, nuclear energy, and translational science.
Department of Education Cancels Fullbright-Hays Applications for FY2025
The Department of Education (ED) has filed a notice to withdraw applications and cancel competitions for the FY 2025 Fulbright-Hays Group Projects Abroad Program, Doctoral Dissertation Research Abroad Program, and the Faculty Research Abroad Fellowship Program. The cancellation follows an effort by the Department “to ensure all priorities and requirements for the ED's FY2025 competitions align with the objectives established by the Trump Administration, foster consistency across all grant programs, and enhance the economic effectiveness of federal education funding.” Read the full notice here.